Thursday, 12 September 2024

Bills

Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024

Statement of compatibility

Lily D’AMBROSIO (Mill Park – Minister for Climate Action, Minister for Energy and Resources, Minister for the State Electricity Commission) (10:33): In accordance with the Charter of Human Rights and Responsibilities Act 2006, I table a statement of compatibility in relation to the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024:

Opening paragraphs

In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006, (the Charter), I make this Statement of Compatibility with respect to the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024.

In my opinion, the Bill, as introduced to the Legislative Assembly, is compatible with human rights set out in the Charter. I base my opinion on the reasons outlined in this statement.

Overview

The Bill amends the Offshore Petroleum and Greenhouse Gas Storage Act 2010 (the Offshore Petroleum Act).

The amendments to the Offshore Petroleum Act will create specific provisions to permit petroleum production licensees to conduct underground petroleum storage and recovery operations, which includes:

(a) The injection into and storage of petroleum into natural reservoirs from which petroleum was previously recovered for the purpose of later recovering it; and

(b) The recovery of petroleum from a natural reservoir into which it was previously injected under (a); and

(c) Any activity incidental to an activity listed in (a) or (b).

Human Rights Issues

Property rights, the right against arbitrary interference with privacy or home, Aboriginal cultural rights and the right against self-incrimination are human rights protected by the Charter that are relevant to the Bill.

For the following reasons, I am satisfied that the Bill is compatible with the Charter and, if any rights are limited, those limitations are reasonable and demonstrably justified having regard to the factors in section 7(2) of the Charter.

In practice, it is likely that many of the Bill’s provisions regulate corporate entities rather than natural persons due to the nature of underground petroleum storage operations that require significant financial resources to carry out. Corporate entities are not considered a ‘person’ under the Charter and as such, do not attract the human rights specified in the Charter.

Property rights

Section 20 of the Charter provides that a person must not be deprived of that person’s property other than in accordance with the law. This right is not limited where there is a law that authorises a deprivation of property, and that law is adequately accessible, clear and certain, and sufficiently precise to enable a person to regulate their conduct. International jurisprudence supports the view that a ‘deprivation of property’ may not be confined to situations of forced transfer of title or ownership but could include any substantial restriction on a person’s control, use or enjoyment of their property.

Amendments in clauses 8, 9, 17, 19, 20, 21, 22, 23, 24, 25, 26 and 27 of the Bill may engage this right.

Significant risk of a significant adverse impact – approval of greenhouse gas operations

Clauses 8, 19, 20, 21, 22, 23, 24, 25, 26 and 27 of the Bill amend various sections of the Offshore Petroleum Act by adding underground petroleum storage operations as an activity that must be taken into account when considering whether certain greenhouse gas storage activities will create a significant risk of a significant adverse impact (SROSAI) to activities being carried out under a petroleum production licence.

The proposed amendments could potentially limit the property rights of the holders of greenhouse gas assessment permits, greenhouse gas holding leases and petroleum production licences if an activity proposed by these rights holders creates a SROSAI in relation to underground petroleum storage operations being carried out under a petroleum production licence. In these circumstances, the SROSAI could affect the rights holder’s ability to obtain an approval to carry out key greenhouse gas operations or obtain a greenhouse gas injection licence.

However, a SROSAI will only arise if the proposed greenhouse gas operation will result in an increase in the capital costs or operational costs of an underground petroleum storage operation or a reduction in the rate of recovery or, the quality of, the petroleum recovered from an existing underground petroleum storage operation.

To assist in determining if SROSAI exists in relation to an application, I can refer the matter to an expert advisory committee for advice.

Should this situation arise, the approval or licence may still be provided if I am satisfied that the granting of the approval or licence is in the public interest and the holder of the petroleum production licence under which the underground petroleum storage operations are being carried out agrees to the grant of the licence or approval.

The intention of this framework is not aimed at preventing underground gas storage and greenhouse storage from occurring in the same area, but to ensure that the impact of any proposed project on any other operations in the area are considered and where it is determined that a proposed project may cause a SROSAI in relation to an existing operation, the parties work together to eliminate, mitigate or manage those impacts through commercial agreements. It is only in cases where agreement cannot be reached or the risks cannot be eliminated, mitigated or managed that an approval or licence may not be given.

While clauses 8, 19, 20, 21, 22, 23, 24, 25, 26 and 27 of the Bill may limit property rights under the Charter, this is unlikely to occur as any such limitation will be imposed on corporate entities that do not attract the human rights specified in the Charter. As such, these clauses of the Bill do not limit property rights under the Charter.

However, in the unlikely event that these clauses could limit the property rights of an individual, these limitations are reasonable and demonstrably justified having regard to the factors in section 7(2) of the Charter. In particular, the clauses’ purpose of managing the rights of various individuals in circumstances where the rights of one individual have the potential to impact the rights of another individual.

Ownership of petroleum injected and stored in the seabed or subsoil

Clause 9 of the Bill amends the Offshore Petroleum Act by inserting new section 67A. New section 67A(2) provides that if a petroleum production licence is cancelled or surrendered, the Crown becomes the owner of any petroleum that has been injected into and is stored in a natural reservoir under the licence.

The provision is intended to ensure that any injected petroleum remaining in a natural reservoir after a licence is surrendered or cancelled is available to be recovered or otherwise dealt with by the government if necessary.

While surrender of a petroleum production licence is voluntary, cancellation can only occur if a licence holder has failed to comply with a condition of their licence, failed to comply with a direction I have given under the Offshore Petroleum Act, failed to comply with a specified provision of the Offshore Petroleum Act or the Regulations, failed to pay an amount payable under the Offshore Petroleum Act within the required timeframe or failed to carry out underground petroleum storage operations for a continuous period of more than 5 years.

Further, if a ground for cancellation exists, there is a procedure set out in the Offshore Petroleum Act which requires me to provide the licence holder with at least 30 days notice of my intention to cancel their licence giving the licensee an opportunity to make submissions which I must take into account before deciding to cancel the licence. I am also required to take into account any action taken by the licence holder to remove the ground of cancellation or to prevent the reoccurrence of similar grounds.

Should a decision be made to cancel a licence, there are provisions in the Offshore Petroleum Act which provide the ability for a licensee to seek review of the decision. In the case of a decision made by my delegate, a licensee can request that I review that decision and, in the case of a decision made by me, application for review can be made to the Victorian Civil and Administrative Tribunal.

In my view, given the above framework and the limitations on my ability to cancel a petroleum production licence, any deprivation of property resulting from the cancellation of a petroleum production licence by operation of the new section 67A(2) will be in accordance with the law. Laws which are confined and structured rather than arbitrary or unclear and sufficiently precise to enable affected rights holders to inform themselves of their legal obligations and to regulate their conduct accordingly.

As such, clause 9 of the Bill does not limit property rights under the Charter.

Interference with the activity of others in the offshore area

Clause 17 of the Bill amends section 276 of the Offshore Petroleum Act by inserting new section 276(2)(d)(iii), to ensure that an underground petroleum storage licensee does not carry on activities in the offshore area under their licence in a manner that interferes with certain activities, to a greater extent than is necessary for the reasonable exercise of their rights and performance of their duties.

Section 276 currently applies to a petroleum exploration permit, petroleum retention lease, petroleum production licence, infrastructure licence, pipeline licence, petroleum special prospecting authority, petroleum access authority and a petroleum scientific investigation consent. As such, the amendment imposes the same obligation on licensees carrying out underground petroleum storage operations as apply to others carrying out other activities regulated by the Offshore Petroleum Act.

Section 276(2) provides that a person carrying on activities under a permit, lease, licence, authority or consent listed in section 276(1) must carry on those activities in a manner that does not interfere with activities listed in section 276(2), including navigation, fishing, conservation of the resources of the sea and seabed or any activities of another person being lawfully carried on by way of exploration for, recovery of, or conveyance of a mineral (whether petroleum or not), constructing or operating a pipeline or underground petroleum storage, to a greater extent than is necessary for that person’s reasonable exercise of rights and performance of duties.

It is possible that clause 17 of the Bill may have the effect of limiting titleholder’s property rights by restricting the use of their property in carrying out operations in accordance with their licence, lease or permit.

However, this obligation, which applies to all holders of licences, permits and authorities issued under the Act, is reasonable given that the offshore area is a shared resource to which various activities occur and where all users have an obligation to conduct those activities in a manner that does not interfere with the activities of others or interfere with the conservation of the resources of the sea and seabed.

I note that the obligation is not unlimited and permits some interference with the activities of others and to the conservation of the resources of the sea and seabed provided that it is to no greater extent than is necessary for the reasonable exercise of the rights and performance of the duties of the licence holder.

As such, clause 17 of the Bill does not limit property rights under the Charter.

Right to privacy

Section 13(a) of the Charter provides that a person has the right not to have their privacy or home unlawfully or arbitrarily interfered with. The right in section 13(a) of the Charter is relevant to section 649(2) of the Offshore Petroleum Act, whose operation is potentially expanded by clause 29 of the Bill.

Section 649(2)(b)(iii) provides that a petroleum project inspector may have access to any structure, vessel, aircraft or building that the petroleum project inspector has reasonable grounds to believe has been, is being or is to be used in connection with operations relating to the processing or storage of petroleum. Clause 29 of the Bill clarifies that the reference to the storage of petroleum in section 619(2)(b)(iii) includes underground petroleum storage as defined by a new definition that will be inserted into the Act by the Bill.

However, in those cases where section 13(a) is engaged, in my opinion, any interference with the right will be neither unlawful nor arbitrary and accordingly the right is not limited.

This is because access to any structure, vessel, aircraft or building used in connection with underground petroleum storage is an essential compliance mechanism for achieving the important regulatory objective of monitoring and enforcing compliance with the Offshore Petroleum Act. There are also important safeguards in place to protect against arbitrary exercise of the powers. In particular, section 649(2)(b) provides that the powers can only be exercised if a petroleum project inspector has reasonable grounds to believe the structure, vessel, aircraft or building has been, is being or is to be used in connection with underground petroleum storage.

While it is unlikely, the powers could be used to access residential areas which constitute an individual’s home where a reasonable expectation of privacy may arise so as to engage the right in section 13(a). However, in my view, the right is not limited in such cases because any interference is neither unlawful nor arbitrary. This is because the interference is specifically authorised by the terms of the Offshore Petroleum Act, which importantly includes, pursuant to section 650, that entry to a residential premises is only permitted with the consent of the occupier or pursuant to and in accordance with a warrant issued by a magistrate (under section ‍653 on reasonable grounds supported by information on oath or affirmation).

Accordingly, I consider that clause 29 is compatible with the right to privacy.

Right to privilege against self-incrimination

Section 25(2)(k) of the Charter provides that a person charged with a criminal offence is entitled not to be compelled to testify against themselves or to confess guilt. This right is at least as broad as the common law privilege against self-incrimination. It applies to protect a charged person against any incriminatory admission contained in material obtained under compulsion from that person in any subsequent criminal proceedings against the person, regardless of whether the information was obtained prior to or subsequent to the charge being laid.

The right in section 25(2)(k) of the Charter is relevant to section 722 of the Offshore Petroleum Act, whose operation is potentially expanded by clause 31 of the Bill. Persons may be subject to information gathering requirements under the Offshore Petroleum Act where the person has information or a document, or is capable of giving evidence, which relates to operations relating to the processing or storage of petroleum in the offshore area. Clause 31 of the Bill clarifies that the reference to the storage of petroleum in section 722 includes underground petroleum storage as defined by a new definition that will be inserted into the Act by the Bill.

Section 725(1) provides that requested information or documents must be produced even if this may tend to incriminate the individual or expose them to a penalty. However, section 725(2) provides a full immunity against both direct and indirect use of the information obtained against the individual in any criminal or civil proceedings (other than proceedings regarding failure to comply with a request for information, or proceedings regarding provision of false or misleading information).

Therefore, any limitation on the right to self-incrimination is clearly justified under section 7(2) as the full immunity in section 725(2) ensures that there is no possibility that an individual could be compelled to assist in their own conviction for an offence (or liability for a civil penalty) and further ensures that there is no adversarial relationship between the individual and the State when the individual is required to provide the requested information to the Minister or a petroleum project inspector which might otherwise attract the application of the self-incrimination right.

Accordingly, I consider that clause 31 is compatible with the right to privilege against self-incrimination section 25(2)(k) of the Charter.

Aboriginal cultural rights

Clause 13 of the Bill will provide the holders of petroleum licences to conduct the additional activity of underground petroleum operations. These operations involve the injection and storage of petroleum in a natural offshore reservoir, from which petroleum was previously recovered, for the purpose of later recovering it.

Section 19(2) of the Charter provides specific protection for Aboriginal persons, providing that Aboriginal persons hold distinct cultural rights and must not be denied the right, with other members of their community, to enjoy their identity and culture, maintain and use their language, maintain kinship ties, and maintain their distinct spiritual, material and economic relationship with the land and waters and other resources with which they have a connection under traditional laws and customs.

The rights under section 19(2) are to be read broadly and are concerned not only with the preservation of the cultural, religious and linguistic identity of particular cultural groups, but also with their continued development. Aboriginal cultural rights are inherently connected to the relevant community and the traditions, laws and customs of that community. It can include traditional ways of life including practice of spiritual traditions, custom and ceremonies, and the maintenance of a cultural connection with land, including the use of natural resources and the preservation of historical sites and artefacts. Further, Aboriginal cultural rights co-exist with, and may extend beyond, rights in other legislative schemes, including the Aboriginal Heritage Act 2006, Traditional Owner Settlement Act 2010 and Native Title Act 1993 (Cth).

A critical aspect of the protection of the cultural rights under section 19(2) is participation in decision-making that affects the group. This would include decisions in relation to new activities that would impact the ability of Aboriginal persons to maintain their distinctive spiritual, material and economic relationship with the land and waters and other resources which they have a connection under traditional laws and customs.

The licensee facing provisions provided for in the Bill do not, in itself, affect the Aboriginal cultural rights protected under section 19(2) of the Charter. Rather, any impact upon cultural rights protected under the Charter would be as a result of the issuing of a licence, permit or approval or consent. To the extent that any activities undertaken pursuant to a licence or a permit may affect the enjoyment of cultural rights, in considering whether to grant a licence permit, approval or consent under the Offshore Petroleum and Greenhouse Gas Storage Act 2010, the Minister as a public authority will, pursuant to section 38(1) of the Charter, be required to give proper consideration to, and act in a way that is compatible with, human rights, including cultural rights under section 19(2) of the Charter.

That is to say, where there are cultural claims by one or more individual or Traditional Owner group in relation to the area the subject of a licence, permit, approval, or consent the Minister or relevant body is already obliged to consider whether the licence, permit or agreement grants rights to an area which may limit the cultural rights of individuals or groups with a claim to the area, including: access and use of the land and waters; the spiritual connection to the land, including the preservation of places of cultural or spiritual significance; participation in culturally significant or traditional practices on the land, including fishing, and exercising self-determination in relation to the management of country.

As such, to the extent that land and waters with which Aboriginal persons may have distinctive spiritual, material and economic relationships, may be impacted by the additional activities permitted in the Bill, there is, in my view, no limitation imposed by this Bill on the cultural rights under section 19(2) of the Charter.

Conclusion

I am therefore of the view that the Bill is compatible with the Charter.

Hon Lily D’Ambrosio MP

Minister for Energy and Resources

Second reading

Lily D’AMBROSIO (Mill Park – Minister for Climate Action, Minister for Energy and Resources, Minister for the State Electricity Commission) (10:34): I move:

That this bill be now read a second time.

I ask that my second-reading speech be incorporated into Hansard.

Incorporated speech as follows:

The purpose of this Bill is to amend the Offshore Petroleum and Greenhouse Gas Storage Act 2010 (Offshore Act) to clarify that the holder of a petroleum production licence is authorised to carry out underground petroleum storage operations. This involves the transfer of existing gas from onshore to an offshore reservoir to be stored for later access.

This Bill is intended to ensure that existing gas supplies can be stored and made available at a later stage during peak periods of high, unmet demand. The amendments do not authorise the production of new gas, nor do they affect existing bans on fracking or other forms of unconventional gas.

In March 2024, the Australian Energy Market Operator (AEMO) forecasted a peak gas supply shortage from as early as 2026 and growing in 2027. A tightening supply and demand balance and/or supply inadequacy would also place upwards pressure on wholesale energy prices in both the gas and electricity markets.

The amendments will, for instance, enable the Golden Beach energy storage project being developed by GB Energy Pty Ltd (GB Energy) to proceed with establishing essential storage infrastructure that can transfer onshore gas to be injected into a reservoir in the offshore gas field and made available for later recovery during peak demand periods. An underground petroleum storage project such as this could provide critical gas supply to meet Victoria’s imminent energy needs.

Any project like this that proposes to establish and operate pipelines and other infrastructure to transfer onshore gas to offshore reservoirs for later recovery would need to undergo various environmental assessments and other regulatory approvals. This is likely to include an Environment Effects Statement (EES) process under the Victorian Environment Effects Act 1978 and, if there is a potential to significantly impact a matter of national environmental significance, approval for a controlled action under the Environment Protection and Biodiversity Conservation Act 1999 (Cth). An approved cultural heritage management plan under the Aboriginal Heritage Act 2006 would also be required if relevant. Licences would be required under the Offshore Act and Pipelines Act 2005 for the construction and operation of onshore and offshore pipelines and associated facilities. Depending on the nature of the project, other statutory approvals or consents may also be required under the Environment Protection Act 2017, Marine and Coastal Act 2018, Water Act 1989, Flora and Fauna Guarantee Act 1988 and other laws.

The measures in this Bill are designed to ensure energy security while the Victorian Government implements its Gas Substitution Roadmap to decarbonise the gas sector through electrification, energy efficiency and the transition to renewable energies.

I commend the Bill to the house.

James NEWBURY (Brighton) (10:34): I move:

That the debate be adjourned.

Motion agreed to and debate adjourned.

Ordered that debate be adjourned for two weeks. Debate adjourned until Thursday 26 September.