Revised Explanatory Memorandum
(Circulated by authority of the Minister for Resources and Energy, the Honourable Martin Ferguson AM, MP)Financial Impact Statement
Funding for the development and implementation of the regulatory framework has been provided and no additional funding is sought for this purpose. Fees will be charged for greenhouse gas titles to recover the costs of day-to-day administration.
Regulatory Impact Statement
The Regulatory Impact Statement is provided in Attachment A.
OUTLINE
1. The Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 ('the Bill') will amend the Offshore Petroleum Act 2006 ('principal Act') to establish a system of offshore titles, similar to the offshore petroleum titles that already exist under the principal Act, that will authorise the transportation by pipeline and injection and storage of greenhouse gas substances in deep geological formations under the seabed. The Bill will also make changes to the existing regime of petroleum titles that are needed in order to accommodate the new kinds of activity being authorised by the Act. Petroleum and greenhouse gas operations will in many respects be similar and the resources of the seabed and subsoil that the two categories of title-holders will seek to exploit have much in common. Each form of activity will have the potential to impact on the other, both beneficially and detrimentally. The Bill therefore provides for regulatory decisions made in respect of each form of activity to take into account potential impacts on the other.
2. The adjustments made by the Bill to the rights and obligations attached to petroleum titles will not apply to petroleum titles in existence at the date of commencement of the relevant provisions of the Bill. Nor will they apply to subsequent titles in the same series as existing titles. In addition, when decisions are made in relation to approval of greenhouse gas-related activities, those petroleum titles will have the protection of a 'no significant adverse impact' test.
3. A greenhouse gas injection licence will authorise the injection and storage of a 'greenhouse gas substance'. For practical purposes, when the amendments commence, 'greenhouse gas substance' will mean carbon dioxide, together with any substances incidentally derived from the capture, transportation or injection processes, with the permitted or required addition of chemical detection agents. There is a power by regulation to extend the meaning of 'greenhouse gas substance' to include other greenhouse gases. This regulation-making power is not expected to be used until such time as the 1996 Protocol to the London Dumping Convention is amended to permit geological storage of those other greenhouse gases.
4. The new titles established by the Bill correspond generally to the existing petroleum titles. The new greenhouse gas titles and the petroleum titles they correspond to are:
- a greenhouse gas assessment permit (petroleum exploration permit);
- a greenhouse gas holding lease (petroleum retention lease);
- a greenhouse gas injection licence (petroleum production licence);
- a greenhouse gas search authority (special prospecting authority);
- a greenhouse gas special authority (access authority);
- an infrastructure licence can now be obtained for greenhouse gas-related activities.
5. The principal Act, as amended by the Bill, will continue to apply only in the Commonwealth offshore jurisdiction. The new greenhouse gas titles will therefore be located in the area between the outer limits of the State and Northern Territory (3 nautical mile) coastal waters and the outer limit of the Australian continental shelf.
6. The House of Representatives Standing Committee on Primary Industries and Resources, in its report on the Bill Down Under: Greenhouse Gas Storage - Review of the draft Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill (Parliamentary paper 323/2008; presented to the speaker 15 August 2008; tabled in the House 1 September 2008) made a number of recommendations. These recommendations have involved a number of amendments to the Bill aimed at refining processes. Of Particular note in these amendments is the ability to establish expert advisory Committees, on a needs basis, to inform the decision making process on a range of critical decision making elements of the Bill.