Bills

National Gas (South Australia) (Market Transparency) Amendment Bill

Introduction and First Reading

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (16:17): Obtained leave and introduced a bill for an act to amend the National Gas (South Australia) Act 2008. Read a first time.

Second Reading

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (16:17): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation and the explanation of clauses inserted in Hansard without my reading them.

Leave granted.

Over recent years, the east coast gas market has undergone a significant transformation, with a number of structural changes occurring on both the demand and supply sides of the market. In response to these changes, in 2015 Energy Ministers asked the Australian Energy Market Commission to conduct a review of the design, function and role of the facilitated gas markets and gas transportation arrangements in the east coast. At the same time, the Australian Competition and Consumer Commission was asked to review the state of competition in the east coast market. These two reviews recommended a range of reforms across the gas supply chain.

Informed by the findings and recommendations of these reviews, in August 2016, Energy Ministers agreed to implement gas market reform measures across four priority areas, including market transparency.

In 2018, a further review carried out jointly by the Australian Competition and Consumer Commission and the Gas Market Reform Group identified a range of information gaps and asymmetries across the eastern and northern Australian gas markets. In response, Energy Ministers tasked officials with developing a package of transparency measures to enhance transparency in the eastern and northern Australian gas markets.

In 2020, Energy Ministers endorsed the final recommended package of measures. The measures cover five main areas: gas, liquefied natural gas (LNG) and infrastructure prices, the supply and availability of gas including information about reserves and resources, information about demand for gas by large users and LNG exporters, information about infrastructure use and planned developments, and improvements to the Gas Statement of Opportunities published each year by the Australian Energy Market Operator.

Improved market transparency is intended to deliver a number of benefits including more efficient planning and investment across the market and more timely and accurate signals about how well the market is functioning. Market transparency is also intended to promote competition and the efficient trade of gas and infrastructure services.

The National Gas (South Australia) (Market Transparency) Amendment Bill 2021 includes changes to the National Gas (South Australia) Regulations and an initial set of National Gas Rules. The package will apply in the Australian Capital Territory, New South Wales, Queensland, South Australia, Tasmania and Victoria. The package will apply in the Northern Territory with the exception of the Darwin LNG and Ichthys LNG facilities and offshore gas fields supplying exclusively those facilities. In this respect, Energy Ministers also agreed, at the request of the Northern Territory Government, to alter the exemption in the Rules to allow flows of up to 10 PJ in any 12 month period to or from the exempt Northern Territory facilities.

The National Gas (South Australia) (Market Transparency) Amendment Bill 2021 (Amendment Bill) that I present to you today will amend the National Gas Law, set out in the schedule to the National Gas (South Australia) Act 2008. The amendment bill provides for the South Australian Minister to make the initial National Gas Rules that will implement the transparency reforms. Once the initial National Gas Rules have been made, the Minister will have no power to make any further Rules.

The amendment bill expands the scope of existing measures in the Law and adds new measures.

The amendment bill enables rules to be made to expand the scope of the Natural Gas Services Bulletin Board and the persons who must report information to the Australian Energy Market Operator for the Natural Gas Services Bulletin Board. The expanded scope will extend to the natural gas industry, which will encompass activities through the gas supply chain from gas exploration to end users. The initial National Gas Rules are intended to expand the scope of the Natural Gas Services Bulletin Board to require the reporting and publication of information about gas reserves and resources, short term gas sales and swaps, compression services, LNG processing facilities, LNG exports and imports, the use of gas by large users and facility development projects. The initial National Gas Rules are also intended to update other aspects of the rules relating to the Natural Gas Services Bulletin Board including registration arrangements.

The amendment bill enables rules to be made to require the assumptions about gas prices used to assess reserves and resources to be given to the Australian Energy Regulator and to allow the Australian Energy Regulator to publish that information on an anonymised basis. The initial National Gas Rules are intended to implement those measures.

The amendment bill removes out of date limitations on the scope of the gas statement of opportunities. It is intended that the initial National Gas Rules will specify additional information to be included in the gas statement of opportunities including information about gas production and LNG activities.

The amendment bill provides an enhanced framework for the Australian Energy Market Operator to collect information required for the gas statement of opportunities. The Australian Energy Market Operator will be tasked with making new procedures, to be called the Gas Statement of Opportunities (GSOO) procedures. The initial National Gas Rules are intended to require the new GSOO Procedures to establish a survey process, to be conducted at least annually. To support the survey, the amendment bill will impose a new obligation for persons with information required for the gas statement of opportunities to give the information to the Australian Energy Market Operator when required by the GSOO procedures.

The amendment bill will give the Australian Energy Regulator a new function to publish information about prices for goods and services in the natural gas industry. The initial National Gas Rules are intended to allow the Australian Energy Regulator to publish information relating to LNG import, export and netback prices and prices for natural gas under gas supply and gas swap agreements. It is intended that the initial Rules will allow the Australian Energy Regulator to determine the categories of price information, methodologies used and the frequency of publication. The initial National Gas Rules are intended to defer the commencement of gas price reporting by the Australian Energy Regulator until after the end of the Australian Competition and Consumer Commission's current Gas Inquiry in 2025.

The amendment bill will give the Australian Energy Regulator new powers to publish an instrument requiring information to be given to the Australian Energy Regulator for the purpose of its new gas price reporting function. The initial National Gas Rules are intended to require the Australian Energy Regulator to consult on the form of instrument.

The amendment bill will amend the list of matters for which Rules may be made by the Australian Energy Market Commission to support these new measures.

I commend this bill to members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of National Gas Law

4—Amendment of section 2—Definitions

Certain definitions are inserted or amended for the purposes of the measure.

5—Amendment of section 10—Things done by 1 service provider to be treated as being done by all of service provider group

Amendments are made to an interpretative provision under the Law.

6—Amendment of section 27—Functions and powers of the AER

Provision is made conferring functions on the AER in relation to goods or services in the natural gas industry.

7—Substitution of heading to Chapter 2 Part 1 Division 4

The heading to Chapter 2 Part 1 Division 4 is substituted.

Division 4—Regulatory information notices, general regulatory information orders and price information orders

8—Amendment of section 45—Meaning of general regulatory information order

Provision is made that a general regulatory information order does not include an order that is made as a price information order.

9—Amendment of section 46—Meaning of regulatory information notice

Provision is made that a regulatory information notice does not include an order that is made as a price information order.

10—Insertion of section 46A

Section 46A is inserted:

46A—Meaning of price information order

New section 46A is an interpretative provision relating to price information orders.

11—Amendment of section 48—Service and making of regulatory information instruments

Amendments are made relating to price information orders.

12—Amendment of section 50—AER must consult before publishing a general regulatory information order

This amendment is consequential.

13—Substitution of section 51

Section 51 is substituted:

51—Publication requirements for orders

Provision is made for publication requirements for orders.

14—Amendment of section 53—Form and content of regulatory information instrument

Amendments are made relating to price information orders.

15—Amendment of section 54—Further provision about the information that may be described in a regulatory information instrument

These amendments are technical or consequential.

16—Amendment of section 55—Further provision about manner in which information must be provided to AER or kept

These amendments are technical.

17—Amendment of section 57—Compliance with general regulatory information order

An amendment is made relating to compliance with general regulatory information or price information orders.

18—Amendment of section 57A—Confidentiality issues

Section 57A is disapplied to price information orders.

19—Amendment of section 57B—Disclosure of information given to AER in compliance with regulatory information instrument

These amendments are technical in relation to price information orders.

20—Amendment of section 58—Exemption from compliance with general regulatory information order

This relates to amending the heading to section 58 of the Law.

21—Amendment of section 59—Assumptions where there is non-compliance with regulatory information instrument

Section 59 is disapplied to price information orders.

22—Amendment of section 63—Protection against self-incrimination

This amendment is technical in relation to price information orders.

23—Amendment of section 74—Subject matter for National Gas Rules

These amendments are technical or consequential.

24—Amendment of section 91D—Object and content of gas statement of opportunities

This amendment is technical.

25—Amendment of section 91DA—AEMO's obligation in regard to gas statement of opportunities

AEMO is conferred with functions relating to collecting, collating and deriving certain information.

26—Insertion of sections 91DB to 91DH

New sections 91DB to 91DH are inserted:

91DB—Information for the gas statement of opportunities

Provision is made in relation to persons giving AEMO information for the gas statement of opportunities.

91DC—Person cannot rely on duty of confidence to avoid compliance with obligation

This section provides that a person must not refuse to comply with the requirement in section 91DB on the ground of any duty of confidence.

91DD—Giving AEMO false or misleading information

This section provides that a person must not give GSOO information to AEMO that the person knows is false or misleading in a material particular.

91DE—Immunity of persons giving GSOO information to AEMO

Provision is made in relation to immunity of persons giving GSOO information to AEMO.

91DF—GSOO Procedures

AEMO is authorised to make GSOO Procedures.

91DG—Nature of GSOO Procedures

Provision is made about the nature of GSOO Procedures.

91DH—Compliance with GSOO Procedures

This section provides for compliance with GSOO Procedures.

27—Amendment of section 91MB—Compliance with Retail Market Procedures

Section 91MB(2) is deleted.

28—Amendment of section 218—AEMO's obligation to maintain Bulletin Board

These amendments are technical.

29—Amendment of section 219—AEMO's other functions as operator of Natural Gas Services Bulletin Board

These amendments are technical.

30—Substitution of sections 223 and 223A

Sections 223 and 223A are substituted by section 223:

223—Obligation to give information to AEMO

Provision is made for a person who has possession or control of information in relation to the natural gas industry to be required to give the information to AEMO for use in connection with the Natural Gas Services Bulletin Board.

31—Amendment of section 224—Person cannot rely on duty of confidence to avoid compliance with obligation

This amendment is consequential.

32—Amendment of section 225—Giving AEMO false and misleading information

This amendment is consequential.

33—Amendment of section 226—Immunity of persons giving information to AEMO

This amendment is consequential.

34—Insertion of section 226A

New section 226A is inserted:

226A—Provision of certain information to AER

Provision is made for the Rules to provide for certain requirements on persons subject to the operation of the Chapter to provide certain information to the AER (and other matters).

35—Amendment of section 228A—Compliance with BB procedures

Section 228A(2) is deleted.

36—Insertion of section 294FA

New section 294FA is inserted:

294FA—South Australian Minister to make initial Rules relating to enhanced market transparency

The South Australian Minister is authorised to make the initial Rules relating to enhanced market transparency.

37—Amendment of Schedule 1—Subject matter for the National Gas Rules

Certain subject matters on which National Gas Rules may be made are inserted into Schedule 1 of the Law. Other amendments to subject matters in the Schedule are consequential.

Debate adjourned on motion of Mr Brown.