OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE (CROSS-BOUNDARY GREENHOUSE GAS TITLES AND OTHER MATTERS) AMENDMENT BILL 2021

Second Reading

Mr D O’BRIEN (Gippsland South) (18:31): I am also pleased to rise to speak on the Offshore Petroleum and Greenhouse Gas Storage (Cross-boundary Greenhouse Gas Titles and Other Matters) Amendment Bill 2021, and it is always nice to get up and speak on a bipartisan bill. This is one that certainly I support. As the previous speakers have said, in essence this is a technical bill which basically deals with the issue that we have crossover boundaries in our maritime boundaries between states and the commonwealth, and this bill really facilitates the CarbonNet project, which potentially facilitates the hydrogen from brown coal project in the Latrobe Valley. To do so we need to utilise carbon capture and storage (CCS) in the CarbonNet project, which will be off the coast of Golden Beach in my electorate of Gippsland South, and into a geological structure known as the Pelican site, which, as the bill is all about, actually crosses between both Victorian and commonwealth waters. So this bill is about facilitating that happening across the two jurisdictions.

The Pelican site is one of many in Victoria, particularly in Bass Strait and in Gippsland, which has been identified as probably the best and most prospective for carbon capture and storage in the world. Ironically enough, often carbon capture and storage is proposed where it could be used to basically pump carbon back underground into previously mined wells for oil and gas. Ironically enough, Pelican actually was not an oil and gas field, but it is a very, very good geological structure, as I understand it, to capture carbon.

I want to talk a little bit about that. There are potentially very big benefits for the Latrobe Valley, for Gippsland and for my electorate of Gippsland South if the CarbonNet project and the Hydrogen Energy Supply Chain project go ahead. That is otherwise known as HESC, the Hydrogen Energy Supply Chain project. When I say ‘if it goes ahead’, it is going ahead. The trial is actually happening now. The first hydrogen has been produced. Whether it goes to commercial stage or not is another thing. Now, there are many people out there who say, ‘This is a waste. Why are we perpetuating fossil fuels? Why are we looking at hydrogen from brown coal?’. ‘It’s not going to be feasible’, I hear quite a bit. Well, this Victorian government has put $50 million into it. The commonwealth government under the Liberals and Nationals has put $50 million in, but more importantly the Japanese government and a number of big hitters in Japanese industry have put another $400 million into it, and I am talking companies like Kawasaki Heavy Industries, J-Power, Sumitomo and many others who are involved, and at the Japanese end Royal Dutch Shell. This is not small bickies. This is not some pie-in-the-sky idea. These guys have serious investments involved in this. So I do hope that it will be successful and it will go on to commercialisation down the track.

When it comes to the opposition to what would be blue hydrogen if it can be stored underground through CCS, I really do not understand why. There are people who say, ‘We just can’t use fossil fuels’. If the issue with fossil fuels is the emission of greenhouse gases, and it is, then what does it matter if we are using coal and capturing those emissions, that carbon? As I understand it, in the process of creating hydrogen from brown coal you capture and separate the carbon anyway. So it is then just a matter of what you do with it, and what we do with it in this case is ideally the CarbonNet project. So you would be pumping it from a project in the Latrobe Valley, probably at Loy Yang, where the HESC project is currently at its pilot stage, through a pipe down to Golden Beach and into the Pelican site, where it would be safely stored for millions of years. I really do not understand the argument that says, ‘We shouldn’t be doing this’. If it is about climate change, and it is, and if it is about reducing emissions, this can provide us secure energy and it can actually ensure that we are removing those emissions as well.

Unfortunately it is too expensive to retrofit our power stations—we are talking sort of $10 billion to retrofit the power stations—so that is not going to happen. Let us put that misnomer to bed, but it could be a huge opportunity for new industry if we can get this carbon capture and storage up and going. More importantly, if we are able to develop a hydrogen industry in the Latrobe Valley and Gippsland, there are great opportunities for us with green hydrogen as well—that is, hydrogen that is produced from renewable energies through electrolysis. So the opportunities there to build the skills, the infrastructure and the technology for a hydrogen industry in Gippsland and in Victoria are really good.

Further to that—and I am getting ahead of us a bit here—then you could potentially see hydrogen replacing natural gas. We could actually be switching our natural gas power stations over to green or blue hydrogen. We could be switching our supplies to our households and our industry across to hydrogen in the long term, so these are things that can be done. And on CCS more broadly, people say it is untried, it is untested. Well, for heaven’s sake, if we only ever did things that have been tried and tested, then we would never do anything. But it is also not true. There are currently 19 operational CCS projects around the world. There are another four under construction, and there are 28 further under development, and indeed one of the biggest carbon capture and storage projects is actually right here in Australia. It is the Gorgon project off the North West Shelf, which is going to be capturing the carbon from the gas project up there and pumping it back underground.

In addition, Victoria actually already has a good record on this. We have been working on the Otway demonstration project through the CO2CRC. It has been going for 10 years now and has successfully captured 65 000 tonnes of naturally occurring carbon and pumped it underground, and it is now up to stage 3. That carbon has been safely sequestered in existing formations underground and has proven that it can be done, and CarbonNet, I guess, is the next extension of that. So I think it is important to acknowledge that CCS is being done. It is being done in Australia. It is being done commercially in Australia. It is being done scientifically in Australia, and the CarbonNet project can actually take it to commercialisation here in Victoria as well.

And just finally on the climate change element of this, the Intergovernmental Panel on Climate Change itself says that if we are going to meet the targets that we have set under the Paris agreement and what we need to do as a globe to get climate change under control, we will need CCS. It will have to be a part of our armoury in doing so. There is concern, naturally enough, in my electorate and in Golden Beach about what this will mean. Unfortunately I think there have been some outside forces that have tried to stir up opposition to this simply because it will ultimately involve the use of fossil fuels. And so I understand that people will be concerned, but as far as what will be seen in Golden Beach or along the Ninety Mile Beach, you will not even see it. It will be a pipeline. It will ultimately go under the dunes in the vicinity of Golden Beach. It will go out about 3 kilometres, I think it is, offshore, under the sea, underground, and you will not see it. And people say, ‘Oh, you know, but it destroys the Ninety Mile Beach’. It does no such thing, and I remind people that there are already at least seven oil and gas pipelines that cross the Ninety Mile Beach from the Bass Strait oil and gas fields up to Longford and then off to Victoria and the rest of the nation. There will be, I believe, great opportunities for us, including at Golden Beach, with this.

CarbonNet had some false starts in terms of consultation with the community and in terms of some of the preparatory work that went underway there. The seismic testing certainly did cause some angst, and I think CarbonNet has probably got that back on track. I understand the angst that that did cause in the area, but this actually could be a great opportunity. We have opportunities in renewable energy coming in Gippsland. There is a proposed 500-megawatt solar farm in my electorate of Gippsland South, just south of Sale, that would be the biggest in the state, and their intention in the longer term is also to move to producing green hydrogen as well. That is again probably ambitious and a bit of a way down the track, but that is part of that whole supply chain, that whole industry and technology development that could be quite good for Victoria and for my electorate and the neighbouring electorates as well. There is a significant regulatory regime. Not only in this legislation but in terms of the geology, in terms of the safety of it. There is a significant amount of work already underway to test the baseline for the geology and hydrogeology of the region to ensure that it will be safe going forward and it can be monitored and tested.

This is a straightforward piece of legislation, but it is potentially opening up a huge industry for Victoria and particularly for my area, and I certainly look forward to seeing its development. I commend the bill to the house, and I hope that both CarbonNet and the Hydrogen Energy Supply Chain will be able to proceed to full commercial opportunities for both our energy future and for jobs in our region.

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