December 12, 2017  |  Second reading

Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2017

Mr HOWARD (Buninyong) (18:11:36) — The member for Melbourne still had some time available to her, but I am pleased to be able to speak to —

Ms Sandell interjected.

Mr HOWARD — I understand her challenge though because she did not really speak on the bill at all. I think it is appropriate to speak on the bill first, and I will be pleased to make some further comments in response to some of the comments that have been made by members from the other side of the house.

We have not heard much on this bill to date because it is a machinery-type bill that recognises an odd feature. The odd feature is that the state offshore boundaries that come up against the federal offshore boundaries, further than 3 kilometres out from the coastline, are not fixed. The fact that they are not fixed means that there are challenges for bodies, such as those that have offshore licences and pipelines. The titles may be found to be not entirely in the state jurisdiction or not entirely in the federal area, but because of boundary changes they can move. This bill really is simply putting in place an arrangement for when boundary changes occur.

At the moment we find that Geoscience Australia is responsible for determining and regularly reviewing these offshore boundaries. At the moment it is undertaking a review of the Victorian federal offshore boundary, and next year it will come down with an outcome on new boundaries.

This legislation simply puts in place machinery measures for pipeline holders in particular but also for petroleum licences. We know there are 17 licences held in the federal area that could be found partly in the state area: for pipeline holders, there are 10; for exploration permit-holders, there are three; and there is one production licence and three retention licences. For those who might find that their titles are now not entirely either in federal or state areas, that they have moved, this bill simply puts in place a recognition that nothing will change in terms of their actual ability to continue as they have been.

This is not major legislation that changes the lives of Victorians. It simply puts in place sound legislation which provides security for those who are in the industry — running pipelines, exploring, running petroleum titles or whatever. It ensures that with the review of boundaries that is taking place they know that the rules are not changing and they can continue to operate as they have been operating. There is clearly an arrangement in place on this issue, as there is with many other matters, where the state and the federal governments are working cooperatively to ensure that even though the boundaries may change between the state and the federal governments in terms of offshore boundaries, the operators operating on those offshore sites can continue with business. That is the basis of this legislation — nothing dramatic, nothing that is going to change the lives of Victorians overall. But it is something that clearly is relevant to what we know are significant investments in these offshore developments, and it provides security for those offshore developments. The Victorian government is committed to ensuring that these investors are able to operate in a confident environment, and we know then that it keeps the security of offshore petroleum, gas production and so on in safe hands.

There is not really a lot more than one can say about this particular piece of legislation, and hence those who have spoken on the legislation before me were often drawing on a broad range of associated topics. I will make some comments about those, because one of the issues that clearly has come up is the issue about gas production in this state. Some members of the opposition keep harping on that the Victorian government needs to be able to provide more gas or needs to be able to provide more petroleum for that matter, that it needs to ensure that we have enough of these resources so that we have electricity through the summer.

What they have neglected to say — and they know the truth — is that this industry has been privatised. We know that the energy industry was privatised, mostly by the Liberal-National coalition under Jeff Kennett, and since that time the industry across the country has mostly been in private hands. Therefore the Victorian government no longer has the control, as it used to under the Gas and Fuel Corporation or under the State Electricity Commission. We are reliant upon private industry to hop in and invest in whichever form of energy provision they have.

As a member of the state government I am certainly pleased to say that we do recognise that global warming is real. We have taken leadership in promoting alternative clean energy sources like wind and also solar. We are showing leadership in gradually changing the balance of energy that is being produced in the state to try to reduce our greenhouse gas emissions. We continue to work along that way.

The issue of gas has been a particular concern. As we know, gas prices have been rising this year. Is it because we are not producing enough in Victoria? It is not. We know that in fact the reserves of Victorian offshore gas amount to something like 400 petajoules annually, and in Victoria our usage is only about half of that. We know that the problem of gas, as some members have identified, is because it is owned by private operators — Santos owns much of it — and it is in fact being exported to other states and other countries. The problem is a federal issue. Controlling the gas to ensure that we get adequate amounts within our state is something that is important, but clearly that is a federal matter. It is something that the state government has no control over. That is a matter that the opposition fails to recognise. It wants to play games to misrepresent the case for political purposes.

It was certainly interesting to hear the concerns of the opposition about the closing of Hazelwood. That again was a decision made by a private operator which recognised that for its own reputation it did not want to be seen to be continuing to operate one of the world’s dirtiest power stations, with polluting greenhouse gas emissions higher than most other power stations around the world. It recognised that to make it cleaner it would have required investment beyond what it was prepared to put in, and so Engie made that decision to close Hazelwood.

We know that the Australian Energy Market Operator (AEMO) is the body that is in place to oversee energy provision across the country and to try and ensure that there is enough supply of energy to meet peak needs. We know that in the coming summer there will be peak needs as people use air conditioning. It is interesting to see that switch from peak need being on very cold days, as it used to be, when people would use their heaters to now being on hot days when suddenly more and more people are using air conditioners. It is interesting to see the way that this has changed. Therefore AEMO has, as we have identified, put in place a situation where it is acknowledged that diesel generation may be needed in this state for short periods of time to meet that need but certainly not to meet base load. Base load continues to be provided by coal, with wind in there to provide some of that, as well as hydro — that mix. That is what AEMO is looking at.

The last thing I should make note of is that in the member for Melbourne’s rant, which did not relate to the bill very much at all, she said the Greens are opposed to just keeping the rules as they are. They appear to want to close down all coal-fired power stations immediately and do away with any further offshore petroleum or gas exploration. That does not recognise the reality of the world. Yes, we do need to address greenhouse gas emissions and bring down our reliance on petroleum, gas and coal. Yes, we do need to maximise our chances of bringing in wind, solar and so on, but the technology is not there yet. We cannot do it immediately. It has got to be done sensibly. It is good to see that we have got a Labor government in place that does get that balance somewhere near right and sensible. If it was left to the Liberals and The Nationals, they would not close down any coal-fired power stations. They would simply want to see it all going and we would be in a mess.