Mr PEDERICK (Hammond) (21:33): I rise to speak to the Petroleum and Geothermal Energy (Energy Resources) Amendment Bill 2023 and acknowledge the work of the member for Morphett in regard to the bill. I note that the proposed amendments will maintain this act as leading practice for regulating upstream petroleum, carbon capture and storage and geothermal activities in South Australia. The amendments also look to introduce a new provision to extend the scope of the act to include the generation of hydrogen from means not ordinarily permissible under the existing act—for example, with renewable energy.

It has been noted this bill was formerly introduced into the parliament by the former Minister for Energy and Mining, the Hon. Dan van Holst Pellekaan, in August 2021, but it did not progress before the change of government in March 2022. The bill has been reintroduced and has been prepared, and includes the majority of the administrative amendments that were consulted on in 2021.

I want to concentrate a bit on the proposals around carbon capture and storage. I think this offers a major incentive for Santos, who have been doing a lot of preliminary work, a lot of work heading into carbon capture and storage and utilising depleted gas wells in the Cooper Basin and surrounding areas. There is the potential to go out through the Ballera region into Jackson in Queensland as well and right throughout the basin. The work is to store regulated substances. As the shadow minister has indicated, they are talking about rent for essentially imported carbon, if that happens, but an exemption will apply to carbon dioxide that has been produced or sourced within Australia.

There has been quite a bit of discussion around the bill. It provides a number of amendments to the act, the most significant being the name change to transfer it over to the Energy Resources Act and an amendment to introduce a statutory security to ensure that the Crown has first priority over a licensee's property in such an event as bankruptcy. It has benchmarking penalties—a number of maximum penalties have been reviewed, benchmarked against the reformed Mining Act and modified accordingly.

The definition of 'environment' will be revised to better capture and regulate social and economic impacts, in keeping with the principles of sustainable development. I note that there will be improved stakeholder engagement in regard to this legislation, with amendments that will explicitly require stakeholder engagement by the licensee in preparing their environmental impact reports and statements of environmental objectives, with one amendment being introduced to mandate a 30-day public consultation period for those environmental assessments as part of the department's approval process.

There is also a new provision being introduced for a ministerial approval before a change in controlling interest in the holder of a licence. This provision will be in line with a similar approval regime that was recently inserted into the commonwealth Offshore Petroleum and Greenhouse Gas Storage Act 2006.

There is also the concept of ministerial determinations, as provided for under the recent Mining Act review, which is being introduced to allow for greater flexibility and effectiveness in clarifying and guiding regulatory requirements, particularly for reporting provisions. Also, around transmission pipelines, there will be an amendment for the definition of a transmission pipeline under the existing act to allow for imported gas to be transported unhindered via licensed transmission pipelines under the act to access such markets as required.

As has been discussed, there has been the discussion around the proposed rent on carbon capture and storage but noting that Australian producers will be exempt. That all comes under part 7A, use of the state's natural reservoirs to store regulated substances. As I have indicated, an exemption will apply to carbon dioxide that has been produced or sourced within Australia and is not imported, so what will happen here is that this will ensure that the rental does not—

The Hon. A. Koutsantonis: Disincentivise.

Mr PEDERICK: —that will do—the storage of Australia's direct carbon dioxide emissions, obviously like the ones that have been coming from the Moomba gas processing plant for many decades now. They will be stored at the Moomba Carbon Capture and Storage facility, which is currently in construction by Santos, and with Beach involved in that project as well.

I think carbon capture and storage is a great project that Santos and Beach are involved in. It is the process of capturing carbon dioxide and safely storing it deep underground, often in the reservoirs that previously held oil and gas in place for tens of millions of years. Carbon capture and storage technologies have been in operation since the seventies and are proven as a large-scale CO₂storage solution.

There are currently more than 20 large-scale carbon capture and storage projects in operation around the world, and they are storing about 40 million tonnes per year of CO_2. This is equivalentto almost all of the annual carbon emissions of the entire Australian passenger vehicle fleet. The International Energy Agency has included carbon capture and storage as an important technology for timely global decarbonisation efforts, stating that:

Carbon capture, utilisation and storage is the only group of technologies that contributes both to reducing emissions in key sectors directly and to removing CO₂ to balance emissions that are challenging to avoid—a critical part of 'net' zero goals.

In April 2023, there was a report released, an Australian 2023 Energy Policy Review, which stated:

Australia is well suited to large-scale deployment of carbon capture and storage to facilitate domestic CO₂ abatement and support regional emissions reductions.

In regard to the Santos Moomba Carbon Capture and Storage Project, it is expected to capture CO₂ already separated from natural gas in the Moomba gas plant. It also provides an opportunity to launch further projects to allow other sources of CO₂, such as from direct air capture, and it enables low-carbon hydrogen production.

Previously, under the term of our former Liberal government as part of the design phase of this project, Santos successfully completed a CO₂ injection trial in 2020. They progressed in November 2021 for stage 1 of the Santos Moomba Carbon Capture and Storage Project with the ambition to capture 1.7 million tonnes of CO₂ per year. Subsequent stages envisage the project to capture 20 million tonnes of CO₂ per year.

This is an exciting development for the Cooper and Eromanga basins in South Australia and Queensland, and it has the potential for injection of over 20 million tonnes of CO₂ per year for more than 50 years. This capacity is equivalent to taking half of Australia's passenger vehicles off the road every year. In 2020, South Australian greenhouse gas emissions were approximately 24 million tonnes of CO₂ equivalent.

There has been much consultation with this bill, and I am really keen to see how these carbon capture projects move on into the future. It is interesting, when you look at what has happened with the development at the Cooper Basin and the surrounding fields as well as other oil and gas projects in Australia or just offshore. With the development of these fields for the last 50 years—certainly in the Cooper Basin—most if not all of those wells have been fractured, most conventionally but there would be a lot of unconventional fracturing taking place as I speak.

The beauty of that is that with the development of those wells that are now depleted—that fracturing process, the perforating that I used to operate 40 years ago with Gearheart Australia, when Halliburton would then come through and pump the fracked sand and fluid down—opening up those wells and those reservoirs gives far more capacity for the storage of carbon. That will be a great thing moving into the future.

I do get concerned with the future of gas. As has been indicated, people like the Greens hate gas, but gas will be a transition fuel for decades to come. We will need gas to transition to a cleaner energy future, and that is why companies like Santos and Beach are doing this major work with carbon capture and storage. However, I am concerned with big offshore projects like the Santos project off the Tiwi Islands, with the Barossa project, as well as Woodside's multibillion-dollar project. The Santos project, which would be a multibillion-dollar project, and Woodside Petroleum's major project off Karratha, the Scarborough project, which are both under threat from legal challenges, would bring much wealth and much energy into the country to be used into the future.

That area off Karratha in Western Australia is a quite high production area for offshore gas. One of my friends worked up there in a project recently. He worked in the Cooper Basin all those years ago and he comes back online with Halliburton when they really need him. He was involved in a 1.2-kilometre perforation of an unconventional well. Obviously, the technology has moved a long way from when we used to shoot vertical wells 40 years ago, but what is interesting is the amount spent to realise the potential of gas wells either on shore or offshore around this country.

I wish all the companies involved, especially Santos and Beach locally, in these carbon capture projects all the best as we go into the future. It will be a vital part of our transition, because we do need gas as that transition fuel into the future. May it go ahead as unhindered as possible, because we have to face the reality of generating energy but also transitioning as we go. I commend the bill.