In Parliament

Bill Debate - Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024

BILL DEBATE

‘OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE AMENDMENT BILL 2024’.

Tuesday, 15 October 2024.

Mr NEWBURY (Brighton) (10:59):

I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024, and I start my contribution by saying that the Coalitionsupports the measures in this Bill. It is not a big Bill. The Bill itself does not do a lot, but the Coalition supports the Bill because we have now reached a point in time where we know how dire energy policy and therefore energy reliability, security and affordability are in this state.

So, when a Bill comes to this place, a small piece of work in what should be a far bigger policy agenda in relation to ensuring adequate energy security and supply, the Coalition supports that approach. We have looked at the Bill in detail and understand the need, because we know the energy market operator has forecast and warned of gas supply shortages from as soon as two years’ time and we know that we will need very shortly the capacity in this state to store gas to ensure that supply is available to Victorians as it should be.

What this House is considering today is a Bill that deals with measures that, frankly, could and should have been implemented years ago. We know the Government was aware of not only gas shortages but also the need for a gas storage measure such as this, and that is what this Bill does. This Bill effectively will allow a larger storage space, in the simplest terms, for gas to be stored and made available to Victorian households. Victoria is very reliant on gas. We know that over 2 million homes are reliant on gas. Some 18 per cent of gas usage is from homes. Obviously, businesses are an enormous part of that gas demand or need, so we should have known as a State that we needed a robust and strong energy and specifically gas policy to ensure that Victorians have the energy supply they need.

Sadly, when you look at the measures of this Bill – and we will go through industry’s and the broader community’s response – what we are seeing is an acknowledgement that gas has been so demonised by this Government, so ideologically demonised by this Minister for Energy and Resources, that it has affected the broader Government’s capacity to properly plan for Victorians in
terms of their energy supply. Not only is that recognised by the community, but it is recognised by the Government, and Government Members themselves have spoken out against the Minister and the Minister’s approach. The Federal Government has spoken out against the Minister and the Minister’s approach. We have seen in recent times not only a calling out from the Federal Labor Government of the Minister but a slight change in the Government’s approach in overruling the Minister for Energy. And we have seen the Minister approve a project for the first time in 10 years. I cannot imagine that that was signed by the Minister with any joy; in fact, I am sure the Minister’s arm had to be moved with a pen in it to have her agree to that brief. I cannot imagine that she has framed that brief in approving that project. I think she would have done so almost under duress.

As I say, as a state we are reliant on gas, and there is nothing wrong with gas. I think what we are seeing both in this State and now Federally is Australian people standing up and saying to their Governments, ‘Stop demonising gas because of ideology.’

That is what the Government here has done for years and the Federal Government has done, and you saw the Federal Coalition’s announcement yesterday to extend the capacity investment scheme eligibility to gas projects and the commitment from the Coalition that if they were to win the next Federal Election gas would form part of the investment scheme so that no longer would that scheme only underwrite renewable projects but it could also underwrite gas projects. The Federal Coalition understands the need, as we do in Victoria as the alternate Government, that Victorians should have and deserve to have reliable, secure and affordable energy. It is something that I know the Member for Bulleen is very strong on. As leader he announced a commitment to a domestic reservation policy in 2022, and that was something that showed our commitment at that time as a Coalition to ensuring that gas was part of the energy mix for the future. Victorian households would have been guaranteed access to Victorian gas, and that is something that this Government has never done. Not only has it not provided any local guarantee, but it has demonised and tried to ban gas, and we will deal with a Bill tomorrow where the Government is seeking to take a significant step towards banning gas in the measures in that Bill. In fact, in that Bill there are very, very sneaky measures that have been pushed into an omnibus Building Bill, which is effectively the head of power for banning gas to households – sneaky, sneaky measures that were hardly highlighted, of course, by the Minister in any of their public contributions. In the last parliamentary sitting week, coincidentally, the Premier talked about Victorians being able to cook with gas two days before announcing and introducing a Bill into this place that would ban gas in homes. Talk about talking out both sides of the mouth on gas.

As I said, gas is an important part of our energy mix in Victoria, and the Government’s 10-year ideological war on gas has just undermined for Victorians the reliability, security and affordability of gas. And you can see the community’s response to it. Recent polling – not that we should ever look to polling most directly, though I am sure that many on this side have been looking at it this week – in relation to Victoria’s gas phase-out showed strong support from Victorians for gas. Perhaps that is why the Premier has tried to draw a line between herself and the Minister for Energy – the great gas-banning Minister for Energy – who is notorious across this country for being the most ideologically opposed in this country and in the Labor Party, which in itself is an achievement. To be thought of as the most ideologically opposed in the Labor Party is quite some achievement.

As soon as this Bill was announced there was public discussion about the importance of a local enhanced gas storage supply, and you can look at what people like David Close, the director of the University of Queensland’s Gas and Energy Transition Research Centre, said:

There seems to be a growing acceptance that gas supply will need to be imported given the lack of investment in exploration and development for many years in Victoria …

And further:

Imports are no easy option – existing pipeline expansions, new pipelines and LNG imports all face financing, approval, social acceptance and commercial hurdles. Possibly insurmountable hurdles without a capacity mechanism that includes gas.

Increasing gas storage can decrease the reliance on gas imports during peak demand periods …

This is just one example, shortly after this policy was belatedly announced, where you could see the sector saying, ‘We see a glimmer of hope. We see a small, small glimmer of hope that perhaps the Minister’s ideology has finally been overruled.’ Further, if you look at other people, Tim O’Brien, the COO of Lakes Blue Energy, said only recently:

We’re very bullish about the exploration and have been for some time. It’s been a frustrating road, but it looks like reality is finally dawning on the government – we need reliable, locally sourced energy …

And further:

People are realising we are desperate for gas because renewables are a long way from being able to provide reliable energy.

I mean, these are not words of political attack, they are words from an industry who are saying, ‘Finally we might see that the Government has recognised that security of energy is almost in crisis in this state.’ We know that. The experts are saying we have a problem and we need to solve it shortly.

Recent correspondence from the Minister to the Federal Minister on this very Bill confirms that the State Government was talking to the Commonwealth about the possible project in 2020, some four years ago. How could it be that it has taken four years for the Minister to actually do something? Released documents show that the Minister was consulting over the policy approach in 2020. One wonders if the community had not spoken up strongly and if the security and reliability and affordability issues were not so strongly felt by the community, would the
Minister have ever acted? I think we all know the answer to that.

There are reports in fact that informal conversations were happening, it has been reported by the media, from 2019. In those reports you can see people like the senior adviser of Royal Vopak Gary Constantine saying how much we need a policy like this. He said:

The conflict in Ukraine has caused nearly all the available floating storage regasification units to be contracted into Europe for security of their gas supply

What he is saying is: we need to do more and we have almost missed the boat, as it were.

This Bill is belated, and as I said earlier, we know of the threats of a lack of supply. The Australian Energy Market Operator, if I can read in a quote, said:

Reduced storage facility delivery capacity may pose a risk to gas supply adequacy in southern jurisdictions on peak demand days during the winter peak demand period …

You could not be clearer on how much industry and the experts were calling for policy action. We know that the Minister for years has been talking – not doing, talking – and the sector has been saying, ‘We need action.’ If you look at industry and business more broadly, they have been calling out the Government’s policy failures. Rick Wilkinson, the chief executive of EnergyQuest, has said that the situation is ‘very serious’ and that we ‘need a backup’.

Recent Department of Energy, Environment and Climate Action departmental briefing notes have been reported as saying that shortfalls in 2026–27 could not be met with supplies from other states as it was:

… projected that all southern states will be in deficit and there is limited pipeline capacity to import into Victoria.

A supply gap will remain even if all currently committed and anticipated southern state projects are developed …

You could not get a more dire warning in a brief by the Department. And what was done? Nothing, and we are here today dealing with a Bill which we support, but it almost feels like we are close to the end of the road when it comes to energy policy. And we know why. It is because, as the Australian Industry Group’s chief executive Innes Willox said, the Victorian Government has spent much of the past decade:

… demonising gas as a legitimate energy source.

And that is true. He said:

The reality is that six-sevenths of our gas use nationally is by industry, not households, and without it big parts of our industrial base face a very difficult future.

It may be that having been warned by energy regulators that it faces a strong risk of blackouts in the years ahead as well as seeing significant parts of its industrial base at risk, the Victorian government has realised that misguided ideological intransigence has real-world consequences.

Well, why did it take so long, especially when, as the Australian Energy Producers director Peter Kos has said:

The government’s own Victorian Gas Program found there is up to 830 petajoules of conventional gas onshore – but that’s just what we know.

A further quote:

The State has not been explored as much as it should have given the state’s long-running anti-gas policies and bans. The political will is missing.

And that has been called out. That has now been seen clearly. In fact, not only has it been seen by Victorians but it has been seen clearly by some in this Government and certainly in the Federal Government.

There are a number of others who have called out that policy failure. Andrew Richards from the Energy Users Association of Australia has said previously that:

… if we go down this gas approach, if we’re using gas curtailment to manage supply–demand balances, that’s not the market working.

That’s policy failure. Sorry, you can’t spin it any other way.

That is plain talking, and we are now dealing with a very small piece of the puzzle in terms of energy policy that has taken far too long to materialise.

And it is not just consumers, obviously, that are concerned about the security, reliability and affordability of energy. Of course it is also business. Because as a state we should be ensuring that businesses can operate, can keep providing jobs for Victorians and can keep producing the things we need as a state to operate. We know that there have been many, many instances of business saying there is a problem. If you look at the tomato manufacturer Kagome, CEO Jason Fritsch said:

We are deeply concerned about where energy is going, not only the price, but also the supply ability going forward for us to manufacture …

Paul Guerra from the Victorian Chamber of Commerce and Industry said:

The supply issues around gas need to be solved before we lose the ability to drive the manufacturing sector, and ongoing electricity generation and transmission needs a clear solution before the lights go out …

These are dire warnings, not just from the experts but also from industry, who keep the state going, who keep people employed and who provide the things that we need. I mentioned before Peter Kos from the Australian Energy Producers, who talked about the political will, and he has further said that:

… the political will is missing and new developments that can put downward pressure on prices and avoid blackouts will not proceed unless the government provides a stable regulatory environment to allow investment …

We know that every time these issues are raised with the Minister, the Minister says. ‘Well, no-one’s popped anything on my desk.’ When you are an ideological warrior who demonises gas, is there any wonder that no-one knocks on your door? Why would you knock on that Minister’s door? In fact, you would knock on every other cabinet Minister’s door and say there is a problem with this Minister.

Danny O’Brien: And they are.

James NEWBURY: And they are. That is why Ministers have been speaking out and why the Federal Government is speaking out against this Minister. We have seen, sadly, that over recent times the Minister’s attitude towards energy policy has clearly put our state at risk. There is no other way to say it – it has put our State at risk. We see the Minister recently has clearly been overruled in terms of her position on energy with some extremely unedifying examples, where the Federal Resources Minister went into a Twitter war with the Minister. Federal Minister King said:

… gas will remain an important source of energy through to 2050 and beyond …

And what did the Minister for Energy in Victoria say? ‘She is wrong, she is wrong, she is wrong.’ Not an ideological warrior with the Minister for Energy, I do not imagine – not a socialist left warrior. She said:

I’m happy to say that Madeleine King is wrong …

How unedifying.

Danny O’Brien: Happy to say it.

James NEWBURY: Yes, happy to say it. How unedifying. We are talking about people having secure energy supply. That is what we are talking about. We are talking about people having secure energy supply, and our Minister, the Minister for all of us, sadly, is saying to the Federal Minister, ‘We don’t want you to stand up for secure energy supply.’ How could you want to do that in a late-night tweet? Bizarre. Minister King called it out further, saying:

… no doubt Queensland is doing the heavy lifting in terms of gas supply for the whole of the east coast.

And the Victorian Minister for energy did not stop there with the Twitter rant. She accused the Federal Minister of behaving ‘like a coalition minister’ – high praise indeed. There is no higher praise.

Danny O’Brien: There’s hope for them yet.

James NEWBURY: That is right. There is no higher praise than accusing the Federal Minister of acting like a Coalition Minister, because it is the Coalition who will always ensure that people of this country and people of this State have secure, affordable and reliable energy. There is no doubt about that. We saw from the Federal Coalition yesterday the announcement that gas would form part of the eligibility for the current scheme, which will ensure that gas has a very strong role to play in the future. And why shouldn’t future gas projects have eligibility through that scheme? Why should the Government be trying to only pick certain projects? I was speaking about the capacity investment scheme. Why should the Federal Government only pick particular projects? So the Coalition announced yesterday, as I mentioned earlier, that gas projects would be able to apply through that scheme.

After the Twitter war between the State and Federal Labor Ministers, Minister D’Ambrosio simply claimed that there is no gas, which is just factually wrong – ‘there’s just no gas anymore.’ No, the minister does not want to find gas. There is no question when you listen to the experts. Not only do they say there is gas, they do not even know how much gas there is in terms of significant capacity, because frankly the industry and investment have dried up in this State.

If you are in the gas business, why would you knock on this Minister’s door?

We have a Bill before us today which we support. We support what it does, and what it does is it says that we will build a storage supply capacity to help us when we have shortfalls. But it does not solve the underlying problem, because you have got to put something in it. This Bill says we will have a storage capacity, but we will need to put something in it, and until the Government recognises the need to do something about that, we will continue to have issues with our energy security and supply.

It is little wonder that after the ‘Coalition Minister’ comment you saw Coalition Ministers – National Party Shadow Ministers – call out the poor behaviour of the State Minister, with multiples speaking out. But one Federal Labor Member reportedly said about the Minister for Energy, ‘On gas, it’s always someone else’s fault’. You could not say it better: on gas, it’s always someone else’s fault. That is the story of this Minister. It is little wonder that we saw the new Premier trying to talk a little bit of gas talk on radio a couple of weeks ago. The Premier spoke about allowing Victorians to continue to access gas in a very, very limited way, but then was, as I mentioned earlier, caught out two days later after introducing a bill to ban gas in homes. I mean, how can you possibly as Premier say one thing and then allow your Government to introduce a Bill which does exactly the opposite only two days later?

It is little wonder that you see the Deputy Premier enter the debate. Is it any wonder the Deputy Premier entered that debate and said we have got gas in our homes and for a number of reasons we are keeping it. We knew what he was saying. What he was saying was the Minister for Energy is wrong. The Minister for Energy is ideologically wrong. He was saying, ‘I’m different.’ Now, I do not think he was just saying that to Victorians, I think he was saying that to his colleagues. I think he was saying, ‘We need a different approach.’ It is interesting that after he said that the Premier decided to speak about gas, so obviously he had his finger on the pulse with his colleagues and the Premier thought, ‘Well, I can’t be completely outflanked by the Deputy Premier’, so the Premier has made some recent comments too.

When it comes to energy policy, it is not words, it is actions, and we have seen inaction. There is proof positive in the number of instances I have raised that the government has not acted to secure energy supply. This Bill is a very small step towards ensuring there is a storage capacity, but it will not do what this State needs. This state needs secure, reliable and affordable energy, including gas, and that will only happen when we have a Minister who does not demonise gas and who does not spend their time ideologically waging war against the gas that she
ideologically is opposed to. Industry knows it, Victorians know it and we know it.