Chapter Five
Conclusions and recommendations
5.1
It is widely accepted that measures need to be taken to reduce
the impact of energy supply on the concentration of CO2 in the
atmosphere. Carbon capture and storage (CCS) can provide a means of reducing
atmospheric CO2. The Gorgon Project in northwest Australia is one example
of a project that plans to reduce greenhouse gas emissions through storing CO2
underground, on Barrow Island.
5.2
A clearly set out and competitive framework for CCS will
potentially lower the cost of addressing the climate change challenge.
Ultimately, this should translate into a smaller increase in household
electricity bills to achieve the goal of limiting climate change.
5.3
There were those who questioned the safety of CCS technology,
including both Greenpeace and the Australian Network of Environmental
Defenders' Offices. There was no evidence from the Department of Resources,
Energy and Tourism or Geoscience Australia to suggest that the technology was inherently
unsafe. However the committee notes that it is appropriate that the onus of
proof should lie with proponents to demonstrate that the technology is safe.
5.4
More questionable than the technological feasibility of CCS was
whether it would be commercially viable on a large scale within Australia. In
particular, the committee was concerned about the location of geologically
suitable storage sites as many existing power stations are a long way from
sites of capture, as is the case with the Hunter Valley.
5.5
Doubts remained as to whether CCS would be capable of
sequestering enough CO2, or be commercially operational in time, to mitigate
climate change in the optimal time. These doubts reinforced the committee's
view that CCS should not be considered the only answer to reducing CO2
emissions, but rather that it be developed along with other technologies capable
of reducing the impact of climate change.
5.6
It is important to get the legislation and regulations in place
expeditiously to assist in providing certainty for possible investors.
5.7
As noted in Chapter 1, the commercial operation of CCS will
require complementary legislation by the states. So far they have made varying
degrees of progress on this. The committee hopes the federal and state
departments, possibly under the aegis of COAG, will make quick progress on
introducing nationally consistent legislation.
5.8
An important element of the bill is ensuring a balance between
attracting investment to the new CCS industry and protecting pre-existing
rights of oil and gas producers. The committee believes the bill seems to get
this balance right, although there is inevitably some uncertainty about this
judgement given the path-breaking nature of the legislation.
Recommendation 1
The committee recommends that the Senate pass the bill.
Recommendation 2
The committee recommends that the operation of the bill be
reviewed three years after its proclamation.
5.9
The committee notes concerns expressed about the degree of
ministerial discretion conferred by the bill, which may give rise to
perceptions that at some time in the future decisions may not be always be made
in the public interest. The committee therefore sees merit in the government
considering establishing an expert panel, or committee, to advise the minister
on matters such as balancing competing resource use between CCS operators and petroleum
titleholders. In order to offer transparency of decision‑making and to
help build stakeholder and community confidence, the advice of the panel should
be made public.
Recommendation 3
That the government consider establishing an expert panel to
advise the minister on matters of site selection, licensing, regulation,
monitoring and environmental impact and site closures. Such advice should be
made public.
5.10
The introduction of an emissions trading scheme, or a carbon tax,
would provide an appropriate price signal for energy consumers to economise on
energy usage and for energy producers to switch emphasis towards providing
energy in ways involving less emission of CO2 into the atmosphere.
There is then no reason for the government to favour CCS techniques over other
ways of reducing carbon emissions. For this reason, the committee is not
convinced by arguments that the government should be subsidising users or
providers of CCS by actively taking over long-term liabilities from them,
either for demonstration or commercial projects.
5.11
As there appears to be some uncertainty around this point, it
could be useful for this to be made explicit in either the legislation or
accompanying statements.
5.12
Given that companies may not exist to take liability over the
decades, or centuries, when stored CO2 may leak out, the government
should consider adding to the arrangements requiring companies to pay for
future monitoring an amount as insurance to cover any future liability the
company may be unable to meet.
Recommendation 4
The committee recommends that the government reject calls
for it to assume explicitly longer-term liability for any leakage from carbon
storage projects. Rather, it should investigate the means by which those companies
undertaking such projects can contribute to the future costs of coping with any
such leakage.
Senator Annette Hurley
Chair
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