Wednesday, 16 October 2024

Bills

Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024

Second reading

Debate resumed.

Wayne FARNHAM (Narracan) (18:02): This contribution will be a lot calmer than my last one. I am happy to rise on the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024. It is a bill that this side of the house do not disagree with. We support this bill because it is actually common sense and we do need to shore up our gas reserves because of the fact that we are running out of gas.

It has been an interesting debate today. The purpose of this bill is essentially to create an offshore storage facility off Gippsland South, down that way, in the member for Gippsland South’s area, and it is actually smart, because we do need that storage. We know Victoria uses the most gas of anywhere in Australia because it is the coldest mainland state. That has been quoted numerous times today, but it is factual. Historically in Victoria, especially through the 1960s and 70s, when Victoria really started to develop, a lot of houses were connected to gas. That is an important point about this, and this is where I fear over the last decade – and I know the government was warned about a decade ago about gas, gas storage and gas requirements in Victoria – those requirements were largely ignored. That is why we find ourselves in a position today where we are talking about serious shortages of gas and why this facility has to be built, and I think the government has been a little bit ignorant in delaying the inevitable.

We know there is a push towards renewables. We know there is a push on wind and we know there is a push on solar, although the wind turbines are starting to become a little bit dangerous, I believe, because there is stuff falling off them when they are spinning at rapid rates. I heard today someone told a farmer he has got to wear a hard hat on his farm because he has got wind turbines. Needless to say, that farmer is not too impressed about that. The problem we have today and the reason this facility has to be built is that there has been no meaningful exploration for gas in the last decade, there really has not. I was doing a bit of research on what gas is actually available in Victoria at the moment, and apparently, according to the research, there is 1.6 trillion cubic feet of gas just in the Gippsland Basin alone. That equates to about 50 years supply. Regarding the extraction method, obviously we do not frack anymore. That is something that a Liberal government stopped after the Labor government issued 13 fracking licences. It was a Liberal government that put a stop to fracking. But what we do need is conventional onshore gas exploration to get our stocks up.

I went back through the 2022 election commitments and one of those election commitments was to ramp up conventional onshore gas exploration, but the sidebar to that was any gas found in those reserves was going to be 100 per cent reserved for Victorians. It was not to be sold; it was going to be used for Victorians. We have heard time and time again and my opinion on this is – and it is only my opinion – that you should always reserve your own domestic supply first before you export anywhere. To be perfectly honest, this should be a policy at a federal level across all states – it really should. It is the same with timber. Every natural resource we have in this country should be reserved for us. If you have excess, by all means go to market – happy for that. But for us to export gas, then buy it back at an international rate is stupid. It is totally stupid. This is why we have to invest in exploration. It is a given – providing it is conventional, providing it is not fracking. There is nothing wrong with exploration, providing it is done in the right way.

We have a situation now in our transition where gas has to be part of our energy mix – it has to be. There are so many homes in this state that you cannot afford not to do it. I can tell you that in my building career I reckon 98.5 per cent of the homes I have built are on gas, every one of them. Unfortunately with current government policy and the bill that is going to be introduced tomorrow – most of the bill is all right except for section 38, and I will talk about that tomorrow – with this transition, the government has I think prematurely said you cannot have gas. The only thing they did wind back was regarding hotplates; they did say you can have a gas hotplate and you can renew your hotplate. That is not great. I do not know if anyone in this chamber has fully converted their house from gas to electricity yet, but I can tell you it is not a cheap exercise. It will not be cheap, and a lot of Victorians will not be able to afford to do this. An average cost will be about $27,000, but it will cost more depending on your house, depending on whether you have got the roof space for an electric central heating unit. If you do not have that roof space, you then have to go to split systems, and you will need multiple split systems. That is just the reality of where we are at the moment.

But we have had industry telling the government for quite awhile now that gas has to be part of the mix. We had Paul Guerra, chief executive of the Victorian Chamber of Commerce and Industry – and Paul is a pretty switched-on bloke – say that:

Our current trajectory is putting Victoria’s prosperity at risk, as energy security and price cannot be guaranteed.

This is a failure by government when we have got the chief executive of VCCI coming out very, very concerned about Victoria’s prosperity. This is the point: it is industry leader after industry leader. He goes on to say:

New clean energy industries will create enormous economic and environmental benefits, but the transition must ensure an affordable and available supply to power Victoria into this next stage of prosperity.

What he is saying there, and it is really quite simple, is we need gas until the transition is done. We need it in the mix. If we do not have it in the mix, people will suffer. It is as simple as that. Businesses will close.

I have got one of the biggest tomato farms in Victoria in my electorate; they supply Woolworths and everyone else. If they cannot get gas, they are gone. They will move interstate and 300 jobs will go. It is really simple: if the gas supply runs out, 300 jobs will go. We have already seen businesses up and leave this state because of the government’s gas policy. As I said, we do not oppose this bill. We support this bill purely because we on this side of the chamber know the need: the government has to have storage. It is a pity – it is actually a sad fact – but Victoria used to be an exporter of energy. We used to export; now we import. That is purely because of a lack of foresight from the government to realise that exploration had to happen.

There is plenty of gas in Victoria, and I get sick and tired of the minister saying geology over ideology and all the rest. Time and time again she says that. If you do the research, the geology will tell you that we do have gas reserves. They are there, but we need to get to them, and we need to get to them in an environmentally friendly manner. That is very important, because we do not want to go back to the dark ages of the Labor government and fracking for gas. They issued 13 fracking licences – talk about an environmental nightmare. Now they come out and pretend to be the big environmental saviours. This government issued 13 fracking licences. Jeez, they like to jump on a bandwagon quick, but they forget very quickly where it all happened. They also forget who privatised the SEC half the time too ‍– ‘Oh, it was Jeff Kennett.’ It was always Joan Kirner who passed that into legislation. It is actually sitting here; you can go to the library and look it up.

The ACTING SPEAKER (Iwan Walters): Through the Chair.

Wayne FARNHAM: My apologies, Acting Speaker, sorry for leaving you out. The coalition supports this bill because it is the right thing to do. We need it to happen, but you have got to start looking for more gas.

Gary MAAS (Narre Warren South) (18:12): As always, Acting Speaker, it is really terrific to see you in the chair.

Wayne Farnham interjected.

Gary MAAS: Well, it is good for some of us, member for Narracan. It certainly is. He always does a top job, the member for Greenvale.

I too rise to make a contribution to the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024. In doing so I would just like to cast the chamber’s mind back some 10 years. If you think back to 10 years ago – I think it might have been around about the time of the dying days of the Nap Time, or Napthine, government – at that time an incoming Labor government would only inherit some 10 per cent of renewable electricity that was generated in this state. We know that that number 10 ‍years later is five times higher and that this government is well on the way to its target of 95 per cent renewables by 2035 and net zero by 2045.

Spearheading all of the boundless energy that is spurring on this government has been a minister that has covered various portfolios through climate action, energy and resources and now the SEC as well to ensure that this government is leading Victoria and taking the state with us on this path. It is a path that we all know has to be done. To that end, it is not often I give a shout-out to ministers in an individual capacity, but the Minister for Climate Action, Minister for Energy and Resources and Minister for the State Electricity Commission’s boundless energy has really taken us to this point where we are at the moment. It is really incredible.

This bill is just part of the suite of many bills that have been brought to this place that have been in the energy, climate action and now SEC portfolios and indeed the environment portfolio as well. The bill will amend the Offshore Petroleum and Greenhouse Gas Storage Act 2010 to clarify that offshore underground gas storage is permitted in Victoria. The bill is designed to ensure energy security while the Victorian government decarbonises the gas sector through electrification, energy efficiency and the transition to renewable energies. It will help secure gas supply while we get on and build cheaper and more reliable renewable energy for the future. The legislation ensures offshore gas storage is done safely and effectively – just as we have been doing for many years, but onshore. It ensures the critical role that deep gas storage will play in Victoria through the renewable energy transition, ensuring projects like the Golden Beach energy project can go ahead. The Golden Beach energy project will see empty reservoirs on the ocean floor used as a storage facility that could supply the market in peak periods through natural gas production. It is expected to deliver natural gas production of up to 30 ‍petajoules a year from winter 2027 – about a quarter of Victoria’s annual household and small business consumption. The field will then be transitioned into an underground storage facility providing around 12.5 petajoules of storage, increasing Victoria’s gas storage capacity by almost 50 ‍per cent.

As I have said, we know that gas is a part of our state’s energy transition, but we are running out of it and Victoria needs new sources to mitigate the depletion. This bill paves the way for the development of offshore gas storage projects. You only need to look at the Victorian energy upgrades program, which has seen some 506,000 homes and 24,000 businesses receive upgrades through the program in 2023. Since 2009 more than 2.4 million households and businesses have been taking on the advantages of this program. You can see that we are getting on with the practical action of electrification while we are also ensuring we can support Victorian families and businesses who are able to get off gas and that they can do it in a way that will also lower their bills in the process. We are ensuring that that happens across the whole state. One of the ways that we are doing that is through the Victorian default offer, ensuring Victorians are paying the lowest wholesale price for their energy. Around 340,000 ‍residential and 58,000 small business customers are currently on the VDO, ensuring Victorians have a simple and trustworthy way to ensure their energy supply.

The Labor government’s reinstatement of the SEC is ensuring continued investment in wind, solar and storage while providing households with a one-stop shop to help them electrify, and the SEC is also ensuring we have got the workforce to support Victoria’s renewable energy transition by creating more than 59,000 jobs, including 6000 traineeships and apprenticeships. I was delighted to see that the City of Casey in my electorate of Narre Warren South was one of three local government areas selected as a part of the new SEC pilot program. The program will help electrify homes and put power back in the hands of my constituents and give them the tools that they need to consider the transition from gas to electric appliances.

As outlined in the Gas Substitution Roadmap, pathways and actions to decarbonise the gas sector will continue well into the long term. This has not been able to happen at the required speed and scale without addressing the imminent risk of gas shortfalls. We all know the transition to renewables is important. This is something the Allan Labor government is taking meaningful action on, and as I said before, we are well on our way to 95 per cent renewables by 2035 and net zero by 2045. In this shift we are aware that we need to get the transition right to ensure Victorians can keep the lights on and keep warm on the coldest days. In conclusion, we are ensuring Victoria’s energy security remains intact now and for the future. For all of those reasons, I am supportive of this bill and wish it a speedy passage.

Martin CAMERON (Morwell) (18:19): I too rise to talk on the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024. Like everyone on both sides of the chamber, I think this policy is okay. What we are trying to do here with the policy is actually store gas out in the basin so at a later date, when we do need to access it, we can bring it back onshore to use in our supply, which does go around the state of Victoria. The purpose of the bill is to amend the Offshore Petroleum and Greenhouse Gas Storage Act 2010 to clarify the holder of the petroleum production licence in Victorian waters within 3 miles of the coast is authorised to carry out underground petroleum – which is our natural gas – storage operations. This involves the transfer of existing natural gas to an offshore reservoir in Victorian waters to be stored for later access. On the face of it the bill is good. We are securing our energy source as we move out of fossil fuels and move into a renewable restructure of our electricity system.

The government position on gas since I have been in here has been one of probably gas being the enemy, and it has been talked down at a lot of stages when I have been sitting in the chamber listening. But the rhetoric has changed over the journey in the last 12 months, and the word ‘gas’ has not been brandished as a dirty word. It is something that is now coming to the fore and that is going to be a key component in our energy supply for a long time into the future as we do get our energy mix right. We need to make sure that we do have the amount of gas that is needed to supply Victoria, not only for our households – back in the day when it was set up the reticulated gas line went to most houses in Victoria, and we need to make sure that supply is there – but also for our manufacturing arms. There are a lot of businesses right around the state, and I have a lot in the Latrobe Valley, that rely heavily on the use of gas, because that is the only supply that can actually generate enough heat to manufacture the parts that are needed to supply different chains and manufacturing arms right around the state and that are also shipped offshore internationally.

The gas supply that we do have we need to make sure stays steady. I noticed the member for Narracan brought up the fact that that there are roughly five decades of gas supply in and around Victoria that one day, maybe, could be accessed responsibly to be used for Victorians. It seems with our gas that we do have here that it goes everywhere around the world apart from here in Victoria, and if it was only coming here, our gas supply and our gas prices would be a lot cheaper. So the government have changed their rhetoric over my journey sitting here in the chamber about what gas is going to do. Even Minister D’Ambrosio, when she gets up to speak, now realises that gas needs to be our friend and needs to be part of our mix as we move forward, which is good to hear. As we transition out we need to make sure that gas supply is there.

Taking gas out of our energy system at the start I felt was really only to keep the Greens happy as we move into green energy. But I think we only have to look back a few decades to when the Longford gas plant blew up, and I think most people can remember when that happened. It showed how vulnerable Victoria was back then and probably still would be today if we did not have that mix of gas in our supply. Recently we had some big storms, which we all talk about. We remember the ones that were up around Mirboo North that not only tipped over a lot of trees and wrecked houses but also pushed over transmission lines, and it was only the gas-fired generators that kicked in that actually kept power on virtually to the eastern seaboard of Australia. So we need to make sure that we are backing our natural resources that we do have and that we keep those supplies there if we can.

As I said before, gas supply for our manufacturing is critical. There are not a lot of places that use these large volumes of gas that can rely on an electricity supply coming into their business that is going to create enough energy, or burn hot enough, to make what they are manufacturing. I did speak a few weeks ago – just thinking of it now – about the crematoriums that are around the place. The crematoriums use gas-fired facilities to dispose of our loved ones when we cremate them. We need to make sure that they are kept on and going until we can come up with another way of making sure these units can work without being on gas.

The member for Gippsland East was also a little bit concerned. He wanted to make sure that we secured the fishing practices of our wonderful fishermen up in Lakes Entrance on the trawlers, who go out to bring our produce to market – all the fish and seafood that we eat. What are the boundaries that are going to be changing for them? We need to make sure that we are not having an unintentional impact on where they can take their boats out to, to trawl around and get the seafood that is part of the make-up of what we eat. It is very difficult. I am sure that it is very worrying for the people that are on those trawlers up around East Gippsland and that rely on these designated areas where the fish are that they are trying to capture that we do not disturb that with the infrastructure that needs to go out to this basin. We need to know: is the pipework going to be laid on top of the sea floor? Is it going to go underneath partially on the way out? They are questions that we need answers for because we do not want to tick off on an area where we are doing a good thing in securing our gas supply and storing it but have the unintentional consequence that we are impacting other people that also rely on this area for their living. We also need to make sure that we do have that wonderful fresh fish and seafood supply for Victoria.

The bill has been developed at the request of industry and is intended to give certainty to the industry for it to invest in Victorian waters. It will, for example, enable the Golden Beach energy storage project to be developed by GB Energy Pty Ltd for it to proceed with establishing the essential storage infrastructure that can transfer onshore gas to be injected into the reservoir in the offshore gas field and made available at a later date. As we said, we are supporting what is going on here. It is a good idea because we do need to make sure that these supplies are adequate, not only for us here in the chamber but for everybody in Victoria.

I think big business, small business and the general public rely heavily on our gas supplies. I know from my role as a plumber working on gas appliances in houses that at the moment gas is a very highly sought after way for elderly people to heat their homes. They have that heater on – the old heater that used to sit on the wall. That is what a lot of them use. A lot of the old houses, dating back into the 1950s and 60s – their only supply was a gas supply. These people rely on it for their cooking and their heating and also to use for their hot water, so we need to make sure this supply is adequate and it is there while we do the transition out. I think that this amendment in the bill, to be able to create space to hold those gas supplies is great, but I do think we need to involve local people, especially our fishing fraternity, to make sure that they have stable work going forward.

Ros SPENCE (Kalkallo – Minister for Agriculture, Minister for Community Sport, Minister for Carers and Volunteers) (18:29): I move:

That the debate be adjourned.

Motion agreed to and debate adjourned.

Ordered that debate be adjourned until later this day.