Bills

Petroleum and Geothermal Energy (Ban on Hydraulic Fracturing) Amendment Bill

Second Reading

Debate resumed.

Mr McBRIDE (MacKillop) (10:57): I rise to speak in support of the Petroleum and Geothermal Energy (Ban on Hydraulic Fracturing) Amendment Bill 2018. My support for this bill is a reflection of the expectations of the people of the MacKillop electorate and the broader Limestone Coast, who have shown a strong desire to see a moratorium on hydraulic fracking legislated.

I am proud to be part of a team that has listened to the community and, in doing so, made an election promise to introduce a 10-year moratorium on fracking for the region. My position in relation to this matter to support taking a further step to legislate this moratorium is based on acting in good faith with the community of the South-East, who have an expectation that a moratorium will be legislated.

Liberal members and branches have come out in support of this moratorium being legislated. I have been working in the party room to seek my fellow government colleagues' support for this bill proposed by the member for Mount Gambier. It has been a pleasure to work alongside the member for Mount Gambier and take his wise counsel in seeking to legislate this 10-year moratorium. As the member for Mount Gambier would fully appreciate, we both belong to the Limestone Coast region, and working in parallel has certainly created a cohesive approach for the region that will benefit both the MacKillop and Mount Gambier electorates.

A range of measures can be implemented to safeguard against risks for the community and resources. The people of the MacKillop and Mount Gambier electorates see that the most strong and robust way to manage this risk of the consequences of fracking is through the introduction of a legislated approach. The importance of a legislated moratorium on fracking has been well highlighted by a great many landowners, businesses, residents and the region. A significant number of regional and statewide industry groups have also signalled their support for this bill.

The community wants to have confidence that the significant groundwater resources of the region and associated quality farming land are protected against risks associated with hydraulic fracking. At this point in time the community does not support the use of this technology. The views of the broader Limestone Coast community and the wider state have been made abundantly clear through the 2016 Natural Resources Committee of parliament inquiring into fracking in the South-East, which concluded that there is no social licence for undertaking the practice of fracking in the region. This situation remains today.

There is a lot at stake, as the member for West Torrens has highlighted. The Limestone Coast region is underlaid by significant volumes of good quality, accessible groundwater resources, on which a great many farming enterprises, businesses and communities rely. The volume of water allocated is significant. More than 1,300 gigalitres of water is allocated, which is more than half of all the water allocated across the whole of South Australia. This water supports important primary production industries, including grazing enterprises; irrigated cropping, including small seed production; a significant and world-class viticultural industry; horticulture; forestry; and a concentrated dairy industry.

We know that more than 88 per cent of the valuable land is used for primary production. I have heard from the community that the introduction of a legislated approach is one that provides a strong foundation upon which the South-East can maintain its reputation for high-quality and clean, green agricultural production enterprises.

There is a balance to be struck with the mining industry on this matter. Contrary to what has just been mentioned on the other side of the chamber, it is important to note that a legislative ban on fracking in no way interferes with conventional gas exploration, which has been an ongoing industry within the MacKillop electorate. It is my understanding that, at present, the mining sector has no immediate plans to use hydraulic fracking methods to access resources in the South-East.

Before I sum up, I want to comment on some of the remarks that were made across the chamber, as though we were anti-business, anti-jobs and anti-development because of this moratorium and having it legislated—if it is successful in being legislated. You could say that our position is actually contrary to all of that, unlike what the member for West Torrens has just highlighted. If you want to talk about science, we know there have been certain risks. We know that there are risks in the world that we all take every day, but my electorate, and the member for Mount Gambier's electorate, does not want to be walking this tightrope of the risk that is involved in fracking.

To suggest that we are going to close the mining industry down for all extraction is absolutely wrong. I know that there is a new well called Haselgrove-3 in MacKillop—with the potential to provide nearly 25 gigajoules of gas per day, one of the highest flow rates in this state's history—down in my region that will prop up business and industry and perhaps may even serve to keep the power prices down, something which the member for West Torrens's government caused to skyrocket out of control. That did more damage to the state than any moratorium or legislative requirement we are talking about here today.

That is what is forgotten in the member for West Torrens's argument. He has lost sight of the fact that he was in government for 16 years. As a government, they did a lot of damage to businesses right across our region. This moratorium is for 10 years on a part of mining, not all mining as the member highlighted—only a part. The industry is actually willing to wear it. The argument has changed on the eastern seaboard in Queensland and New South Wales, where fracking was seen as a terrible curse on the landscape—perhaps through mistakes. Perhaps it was not done as correctly as it could have been, but we know that technology changes. We know science changes and we know community sentiment can change.

This 10 years that could be legislated here this morning can allow for a change of attitude and a change of social licence and can actually bring the community that I and the member for Mount Gambier belong to—with the support of our federal member, Tony Pasin, in Barker—into supporting it. When the argument of the day is won, we will have the community on board and the social licence, and the technology stands little risk of damaging what I have explained to you already about the region's importance. It may go ahead. Fracking may go ahead down in our region. I do not know.

Ten years buys us time to get around all the issues that my constituents are concerned about. To suggest that this is all about vote buying is absolutely wrong. It is not about vote buying. It is absolutely representing our region—80 per cent of our region. What is really ironic is that we know we have a member from the upper house going around and opening offices in Millicent, spruiking that Labor are listening to the constituents of my region, hearing all the concerns of my region, yet we have the member for West Torrens, who is part of her team, undermining anything she stands for. To think that she is part of a team that would go into my region and listen to concerns is unfounded.

However, the changes that we are putting may change in the future as technology improves and preference for locations to access resources shifts as resources are exhausted. My expectation for this bill will be that it will last for 10 years. In this time, demand and technology will change, and the Limestone Coast region will have a choice about the moratorium and will determine whether it continues. If the mining industry should choose to look at fracture stimulation for gas extraction, they will need to bring the community on board and seek a social licence. This will involve making sure that there is good communication and that the risks associated with such practice are kept to a very low level and are backed by the latest science and technology. I commend the bill to the house.

Mr BELL (Mount Gambier) (11:05): I will keep my closing comments brief, because we still have a bit to get through. I would like to thank all members who have made a contribution to this bill in this house. I would particularly like to thank the Limestone Coast Protection Alliance and all those community members who have travelled up for the second time to see this bill become law.

Chairperson Angus Ralton has put in countless hours of hard work organising this campaign and organising letters of support from industry peak bodies, all whilst running a small business. He is a determined advocate for this cause, as is Kalangadoo fifth generation farmer David Smith. David put over $100,000 of his own money towards producing a documentary that highlights the impacts of fracking upon farmland, which I think is a good indicator of how passionately this issue is felt in the Limestone Coast.

I want to thank Nick McBride, my parliamentary colleague and neighbouring seat, for his lobbying and support on this very important issue, and for listening to his community and his constituents. I want to thank the 4,000 people who signed a petition at very short notice to bring this into law. I will table that before question time today.

Just picking up on a few comments, we are elected to this place to represent the people of our electorates, and that is exactly what the member for MacKillop and I are attempting to do. To correct the record, it is not a ban on all gas: it is a ban on a form of extraction for 10 years in a very isolated format in a region. With those comments, I commend the bill to the house.

Bill read a second time.

Committee Stage

In committee.

Clauses 1 and 2 passed.

Clause 3.

The CHAIR: The Clerk informs me that there is a clerical error in clause 3. It is printed under division 1A as 7A. It should read 11A. Pursuant to standing order 283, clerical and typographical errors may be corrected in any bill by the Chairman of Committees at any time during its progress through the house. I am advising the house that that is what I will be doing, changing 7A to 11A. Questions on clause 3?

The Hon. A. KOUTSANTONIS: That is reassuring, sir, that the bill to ban an entire industry has typographical errors in it. But that is not the member for Mount Gambier's fault. That is someone else's fault.

The Hon. V.A. Chapman interjecting:

The Hon. A. KOUTSANTONIS: If I wanted advice on compensating murderers, I would speak to you, but I am not. Now, my question is on—

The Hon. V.A. CHAPMAN: Point of order, Chair: that is the most offensive statement, and I will use the precedent of his own breach of that before and the Speaker requiring him to apologise.

The CHAIR: Attorney, what in particular did you take offence to?

The Hon. V.A. CHAPMAN: The allegation about taking advice from those who give funds to a convicted murderer.

The CHAIR: Member for West Torrens, are you—

The Hon. A. KOUTSANTONIS: Sir, I withdraw the word 'convicted'.

The Hon. V.A. CHAPMAN: I ask that the member withdraw and apologise completely the allegation that he has previously been asked by this house to do so, and he did last time. Now he is just perpetuating this. I ask you, Chair, to require him to withdraw and—

The Hon. A. Koutsantonis interjecting:

The CHAIR: Member for West Torrens, you have apologised. Are you prepared to withdraw the statement as well?

The Hon. A. KOUTSANTONIS: I withdraw it, sir. My question is to the member for Mount Gambier. From reading his bill, it says that no compensation is payable on behalf of the Crown, the minister or any other person in connection with the operation of this section, even if a licence or condition that purports to authorise the carrying out of hydraulic fracture stimulation has been issued. Why shouldn't an oil and gas company, which has a productive well which could be improved by hydraulic fracture stimulation but is now being legislatively banned from doing so, be compensated for loss of revenue?

Mr BELL: Because they would have drilled that well bore under the provisions within the act, so they have not applied for it to be fracture stimulated; therefore, its intent is not to be fracture stimulated. The advice that I have received from Beach Energy is that they have no plans to fracture stimulate; therefore, there will be no compensation.

The Hon. A. KOUTSANTONIS: My understanding of the provisions of the act is that all activity is prohibited unless approved by an agency. So the provision to drill is prohibited unless authorised. The provision to subsequently fracture stimulate a well, after successfully drilling it, is yet another approval process that must be gone through. I point out to the house that it is common practice for conventional wells to be fracture stimulated; in effect, denying the ability to fracture stimulate is the bill's intent, and I do not quarrel with that. Why not compensate a company because, if they had drilled this anywhere else and followed the appropriate processes, they would have been able to fracture stimulate a well and gain revenue? They have been denied economic activity by a bill arbitrarily. Should they not be compensated?

Mr BELL: No, I do not believe they should be. As I said before, it was the intent of the mining companies in the South-East, where the bill applies to specifically, to drill conventional well bores and there is nothing in the bill that detracts from that original intent. That is why there should not be any compensation allocated or indicated in the bill.

Mr PEDERICK: Member for Mount Gambier, I just want to qualify the definition of 'hydraulic fracturing' and I will read it as it is in the clause:

hydraulic fracturing means the high-pressure injection of a substance or a combination of substances into a wellbore so as to create, or that is likely to create, fractures in rocks or rock formations;

That is exactly what I did with conventional fracking in the Cooper Basin back in the eighties and it has been going on up there for 50-odd years, plus they are doing unconventional fracturing in the Cooper Basin now.

The Hon. A. Koutsantonis interjecting:

Mr PEDERICK: Yes, they are doing both, I understand. To me, because I am aware of the high pressures to pump down the—apart from what I used to do, which was to shoot the formation with explosive shells that would go through 22 inches, in the old language, of solid steel, and then it was fractured with fracture sand pumped under pressure with many Detroit motors, some of which were V8, some were V12 and some V16, and there were banks of these motors. So there was significant pressure, and I know this from what I did all those years ago. My concern is that you talk about conventional drilling, but will the conventional drilling be allowed to have conventional fracking?

Mr BELL: I think it is pretty clear in the definition there of what hydraulic fracturing is and the intent being around that high-pressure injection. I am only taking your word on what you used to do in the eighties. In terms of a definition, I think the bill very simply and very cleanly highlights the aspects that it is trying to achieve in banning unconventional gas in those situations.

The Hon. D.C. VAN HOLST PELLEKAAN: This is an important issue. Member for Mount Gambier, would you just clarify beyond all doubt that it is your intention that if the bill passes this place, that it will only apply to what industry refers to as unconventional gas and will not apply to what industry refers to as conventional gas?

Mr BELL: That is the intent of the bill, yes.

The Hon. A. KOUTSANTONIS: We cannot know that because we do not have the agency here to give us advice on the impact of the bill. The prudent thing to have done, if the government was going to accept this legislation, was make it a government bill, do it in government time and have the agency here to answer the questions of parliamentarians so the house could be advised authoritatively whether or not the actual outcome of what is proposed is done. I would hate to see—

Mr BELL: Point of order: is this a question or a statement?

The CHAIR: I take your point of order. Member for West Torrens, this is not the opportunity to make a speech; it is an opportunity to question the member.

The Hon. A. KOUTSANTONIS: Will the member undertake to come back to the house with a piece of advice from the agency that the bill does nothing to inhibit conventional gas?

Mr BELL: I will take advice on that. Of course, the passage of the bill in this house is only one part of the process, so there are opportunities in the Legislative Council for that to be addressed. What I will commit to is for that advice to be in the Legislative Council before their debate.

The CHAIR: Member for Mount Gambier, I understand you have an amendment in your name. Are you planning to move that or are you going to withdraw it?

Mr BELL: No, I plan to withdraw that amendment in my name.

The CHAIR: You are not proceeding with that amendment?

Mr BELL: I am not proceeding.

The Hon. A. KOUTSANTONIS: Regarding clause 3—Insertion of Part 3 Division 1A, does that include subsection (5) or is it a separate clause? Is it all one clause?

The CHAIR: It is one clause.

The Hon. A. KOUTSANTONIS: May I indulge by asking a further question of the member for Mount Gambier on that clause?

The CHAIR: You can have one last question, member for West Torrens, given that it is a long clause.

The Hon. A. KOUTSANTONIS: Regarding the designated area, you have stated, I think, seven council areas. Has the member consulted with all of those council areas and have resolutions been passed at all of those councils supporting the bill?

Mr BELL: I thank the member for West Torrens. Through the LCLGA (Limestone Coast Local Government Association) there has been a resolution to support the Liberal Party policy. I would have to check as to the exact wording of that, but the consultation has been done through the LCLGA.

Clause passed.

Title passed.

Bill reported without amendment.

Third Reading

Mr BELL (Mount Gambier) (11:21): I move:

That this bill be now read a third time.

Bill read a third time and passed.