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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2022-06-14 Daily Xml
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National Gas (South Australia) (Market Transparency) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 1 June 2022.)

Mr PATTERSON (Morphett) (11:36): I take this opportunity to speak in parliament today about the National Gas (South Australia) (Market Transparency) Amendment Bill 2022 and indicate that I am the lead speaker for the opposition. This bill comes to us at a time of great uncertainty in both the electricity market and the gas market, especially on the east coast. Even today, there are reports that Queensland, and potentially New South Wales, will be challenged with electricity shortages in the evening. This is of great concern, not only to those in those states but also to all users of electricity in the National Electricity Market.

What has impacted this? Internationally, the war in Ukraine has caused big increases in the commodity markets and higher international gas prices that are now impacting on the domestic gas price. Domestically, there are factors impacting on this: planned maintenance of some of our coal-fired power stations and, in addition, outages to other coal-fired power stations. These have caused a massive increase in the use of gas to fill that gap. There has also been inclement weather, which has impacted the supply chains in coalmines and also the renewable energy output. These factors have all played a role.

Putting this into perspective, coal power has reduced from 65 per cent of the electricity provided in the NEM in May 2021 to 59 per cent this year. In exchange, gas has increased from about 6 per cent in May last year to upwards of 9 per cent of electricity generation in the NEM. It is playing a crucial role in the gas usage and gas shortages in the NEM, but we have to remember that gas prices are also impacting on industries that rely on using that gas for heating processes, industries such as manufacturing businesses and food manufacturing, and that is really important.

In this environment, last week the energy ministers from around Australia held a meeting to look to provide a way forward through these high gas prices that of course no-one wants to see. As I said previously last week, the opposition welcomed this meeting, and I was certainly interested to see the communiqué that resulted. One of the matters raised in the communiqué noted:

Energy Ministers noted the existing gas transparency reform package has been recently introduced into the South Australian Parliament and will be passed shortly. Energy Ministers have agreed to consider additional legislative reform options in July to enable new gas and electricity contract market monitoring powers as an immediate priority, for introduction into the South Australian Parliament to ensure the AER has the full information and visibility it needs.

Further to this, the communiqué also points out that energy senior officials have been instructed to bring back further transparency measures if required to support a more resilient, efficient and transparent east coast gas market. The gas transparency reform package measures mentioned in the communiqué are in fact what we are debating here today, what we are discussing, and involve making changes to the National Gas Law.

The gas markets in eastern and northern Australia are regulated through the operation of the National Gas Law and the associated National Gas Rules and regulations. The National Gas Law is hosted by South Australia. We are the lead jurisdiction. It has the force of law for the participating jurisdictions. All states and territories, including Western Australia on a limited basis, and the commonwealth are participating jurisdictions. The National Gas Law can be modified in the South Australian parliament at the unanimous direction of the Energy Council. The South Australian Governor is also responsible for amending regulations made under the National Gas Law.

That is where we find ourselves today. High energy prices, both gas and electricity, are having a massive impact on businesses and households alike. The opposition is very interested to look at supporting measures to reduce energy prices. In government, we certainly did a lot of heavy lifting in that regard, seeing electricity prices drop by $420 from July 2018 through to December 2021. Likewise, gas is of interest to us as well.

In terms of this gas market transparency bill, it has been developed and consulted on over a number of years. It is not something that has appeared in a number of weeks. It has been discussed and consulted on for a number of years by the energy ministers via the former COAG Energy Council. Ultimately, these consultations led to its being ratified by energy ministers in July 2021, which then saw this bill effectively introduced into the South Australian parliament by the former Marshall Liberal government in September 2021.

As I said, the bill before us now is fundamentally the same as the bill introduced in September last year. As a result, I can indicate that the opposition will be supporting this amendment bill. Further to that, the convention for such changes to the National Gas Law that have been through the energy ministers is that these legislative amendments are supported by the opposition, so I further indicate that the opposition will be offering bipartisan support to this bill today.

In terms of the gas market in Australia, conventional natural gas in Australia is currently produced in a number of fields, especially in the Cooper Basin but also in the Gippsland, Otway, Bass and Surat-Bowen basins. Gas producers extract the gas from wells and then process it to prepare it for transmission and sale in both domestic and overseas markets. Gas producers sell this wholesale gas to electricity generators, which I have spoken about before, and other large gas users and energy retailers. These energy retailers then onsell them to businesses and household consumers.

Many of the agreements that occur between these producers and users take the form of bilateral agreements, which are longer term. This means that limited information is available about large parts of the gas market. Over recent years, the east coast gas market has undergone even further and significant transformation. This has become more pronounced following the development of LNG export facilities in Queensland and contributed to a tightening of the supply and demand balance even before the current challenges we have faced with gas in the last few months.

The gas markets in eastern and northern Australia have historically operated in an opaque manner, with gas prices in gas supply agreements—infrastructure service agreements—invariably treated as confidential. Some steps have been taken recently to reduce this opaqueness, but there is still limited publicly available information on the prices payable for gas, LNG and infrastructure services beyond what is being published through the Australian Competition and Consumer Commission (ACCC) gas inquiry, which has been required through the recent gas pipeline reforms.

This opaqueness and lack of transparency have resulted in a number of reviews being carried out—one by the Australian Energy Market Commission and another held jointly by the Australian Competition and Consumer Commission and the Gas Market Reform Group. These reviews identified a range of information gaps and asymmetries that are adversely affecting the efficient operation across the eastern and northern Australian gas markets.

These gaps and asymmetries mean that not all the participants in the market have a common understanding of what market prices are and also the supply and demand conditions. This adversely affects the efficient operation of the markets and also the efficiency with which gas infrastructure services and other resources are allocated over the longer term.

One result of this lack of transparency is that it hinders the ability of the market to respond efficiently to changing market conditions. It also impedes effective competition and the efficient trade of gas and infrastructure services, and it results in inefficient decisions being made about the consumption, production and use of infrastructure services and longer term investment decisions. These key deficiencies primarily relate to gas, LNG export, infrastructure prices, gas supply and availability, infrastructure services and also the resulting demand.

As I said, these issues impact on the gas market. This was looked at in December 2018 by the COAG Energy Council and they decided that these information gaps and asymmetries that are happening in the gas industry warranted some government intervention, so they tasked officials with developing a package of transparency measures for the gas market. This took place over two years, with a number of options initially put out for consultation. Over 2019, this consultation occurred. The end result was that in March 2020 there was a Decision Regulation Impact Statement endorsed by the energy council.

Building upon that, in November 2020 energy senior officials used the Decision Regulation Impact Statement recommendations and released for consultation a package of draft regulatory amendments that would be required to give effect to the gas market transparency reforms as outlined by the energy ministers in March 2020.

The main areas that were covered as part of this reform were in terms of gas; LNG; infrastructure prices; the supply and availability of gas, including information about reserves and resources; information about the demand for gas by large users and LNG exporters; information about infrastructure use and planned developments; and what improvements could be made to the Gas Statement of Opportunities that is published each year by the Australian Energy Market Operator.

This went out for consultation in November 2020. The resulting responses led the energy ministers to make some refinements to this framework in July 2021 but ultimately to progress it through to the legislation that was tabled, as I said, in parliament in September 2021, that bill being introduced by the former Minister for Energy and Mining. Unfortunately, the parliament was prorogued, but an identical bill has been introduced and that is what we are debating today.

I will talk a little bit about the intention of the bill and what improved market transparency would deliver. It is proposed that a number of benefits would occur, including enabling more informed decisions to be made about gas consumption, gas production, exploration activities and infrastructure services, which would facilitate more efficient planning and investment across the market.

Another advantage would be to provide more timely and accurate signals about how well the market is functioning and whether there are any potential problems with the supply and demand balance, which will enable the market to respond more efficiently to changing market conditions. Another benefit will be promoting competition, where that is possible. This will result in the efficient trade of gas and infrastructure services by aiding the price discovery process, which will lower search and transaction costs and reduce this information imbalance between producers and users in the markets, giving more bargaining power to users so that they can go through the supply chain to make sure they are not paying significantly more than they should be.

As I said, realising these measures will support the efficient operation of the gas market and the efficiency with which gas, infrastructure services and other resources will be allocated amongst the different market participants in the supply chain.

In terms of the bill itself, the National Gas (South Australia) (Market Transparency) Amendment Bill includes changes to the National Gas (South Australia) Regulations and also the Gas Rules. So it is not just the law itself but those regulations and rules that go with it. On being passed through the South Australian parliament, the package will apply to jurisdictions in the eastern and northern markets, including Queensland, New South Wales, ACT, Victoria and Tasmania. The package will also apply to the Northern Territory, but with some exceptions: in particular, the Darwin LNG facilities and some of the offshore gas fields that supply exclusively to those facilities.

The amendment bill expands the scope of existing measures in the law and also adds new measures that relate to the Natural Gas Services Bulletin Board and the Gas Statement of Opportunities. It also expands the pricing information collected and published by the Australian Energy Regulator.

In terms of changes to the Natural Gas Services Bulletin Board, this bulletin board was implemented in mid-2008 to provide market participants and other interested parties with ready access to information on the capacity and utilisation of key production, transportation and storage facilities on the east coast. The amendment bill before us will enable rules to be made that will expand the scope of that bulletin board and of persons who must report information to the Australian Energy Market Operator for the purposes of that bulletin board.

The expanded scope will extend to the natural gas industry, which encompasses activities right through the gas supply chain: from gas exploration right through to end users. The reform will seek to expand the scope of the bulletin board to require reporting and publication of information about numerous activities within the gas market, such as gas reserves and resources, LNG processing facilities, LNG export and import prices, the use of gas by large users (users who use more than 10 terajoules), short-term gas sales and swaps, and compression services as well.

The amendment bill provides for producers to report on these gas price assumptions that underpin the reserves and resource estimates and for those to be given to the Australian Energy Regulator and to allow the Australian Energy Regulator to publish that information on an anonymised basis to make sure that confidentiality is still involved.

In terms of changes to the Gas Statement of Opportunities, again this is similar to the bulletin board. It has been published for a number of years and was first published by AEMO in 2009. It is now published on an annual basis. It contains information about gas supply and demand and related matters over the medium and long term, outwards of 20 years, to assist industry participants and others to make informed decisions about investment in the natural gas industry.

The amendment bill provides an enhanced framework for the Australian Energy Market Operator to collect information required for this Gas Statement of Opportunities. The National Gas Rules that go with this law will also specify additional information to be included in the Gas Statement of Opportunities, which will include information such as gas production and LNG facilities.

The Australian Energy Market Operator (AEMO) will be tasked with making new procedures to govern this survey process and the form of the survey itself, and these will be called the Gas Statement of Opportunities procedures. These new procedures will establish the survey's process to be conducted at least annually. AEMO will also be required to consult when it determines the initial form of these procedures and, going forward, any changes that are proposed.

Currently, information collected for the Gas Statement of Opportunities is to a large extent collected on a voluntary basis. To support the survey in the future, the amendment bill proposes to impose new obligations for persons with information required for the Gas Statement of Opportunities to give that information to AEMO when required by the procedures mentioned previously.

The third major amendment to this market transparency bill is around giving the Australian Energy Regulator new functions to collect, analyse and publish information about prices for goods and services in the natural gas industry. Currently, the ACCC gas inquiry collects some pricing information; however, this inquiry is scheduled to finish in 2025.

What came up quite strongly in the consultation process was that, in the absence of other measures such as this gas inquiry, the market would like to revert back to becoming even more opaque. By having these transparency reforms, it will allow the Australian Energy Regulator to collect this information and, importantly, to publish it. It will relate to the LNG import, export and net-back prices and prices for natural gas under short and longer term gas supply and gas-swap agreements.

It is also intended that the Australian Energy Regulator will determine the categories of price information, methodologies used to collect that and also how the frequently they publish that information. Additionally, the Australian Energy Regulator will gain 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.

Finally, as I said before, the Australian Competition and Consumer Commission's current gas inquiry finishes in 2025. The consultation said that the intention of these rules, when they come in place, is that there will be no duplication of the collection of this information, so the initial National Gas Rules that are intended to apply for the AER will be deferred until the ACCC's gas inquiry finishes in 2025.

Talking about the rules, the amendment bill in section 294 provides for the South Australian minister to make the initial National Gas Rules that will implement these transparency reforms and, once these National Gas Rules have been made, the minister will have no power to make any further rules. Further rules will be made by the Australian Energy Market Commission if required. Once implemented, these transparency reform measures will enhance transparency in the eastern and northern Australian gas markets. The aim is to address information gaps and asymmetries relating to gas infrastructure prices, the supply and availability of gas, gas demand and infrastructure used to supply gas to end markets.

It will ultimately aim to contribute to realising the National Gas Objective. The transparency reforms will facilitate more efficient planning and investment in the domestic gas markets, provide more accurate signals about how the market is functioning and also enable market participants to more effectively respond to changing market conditions, such as what we are experiencing currently.

The measures will also promote more competition by reducing search and transaction costs that gas users face during the price discovery process and help to reduce the imbalance of bargaining power that users can face in each stage of the supply chain. As I indicated earlier, the opposition will be offering bipartisan support for the National Gas (South Australia) (Market Transparency) Amendment Bill.

Mr PEDERICK (Hammond) (11:59): I rise to speak to the National Gas (South Australia) (Market Transparency) Amendment Bill. We note that this bill, as has been stated by our lead spokesman, the shadow minister, will improve transparency in the eastern and northern Australian gas markets. This bill was previously introduced by the former Minister for Energy and Mining on 9 September 2021 but, as parliament prorogued, it could not be voted on.

The current bill was introduced by the current minister on 1 June this year. In July 2021, energy ministers unanimously agreed to a legislative package aimed at improving transparency in Australian gas markets and hence this transparency bill addresses information gaps that relate to gas and infrastructure prices, supply and availability of gas, gas demand and infrastructure used to supply gas to end markets.

The key features of this transparency bill include expansion of the scope of the Gas Bulletin Board. This will allow for new information to be collected in areas such as gas reserves and resources, liquefied natural gas processing facilities and LNG exports and imports. There is also a feature requiring the Australian Energy Market Operator (AEMO) to make Gas Statement of Opportunities procedures.

This will require relevant market participants, such as producers and facility operators, to give information to AEMO for use in preparing that statement. It also confers a new function on the Australian Energy Regulator to publish gas price information and the necessary powers to obtain this information from relevant market participants. It also allows the Australian Energy Market Commission to make transparency-related National Gas Rules.

It is expected that more efficient planning and investment in the domestic gas markets will result from these reforms in addition to providing more accurate signals about how well the market is functioning. Improving the transparency of the eastern and south-eastern gas markets will also bring Australia more in line with commensurate transparency requirements observed in overseas gas markets, including our close neighbour New Zealand. We are the lead legislator in regard to this transparency legislation and as such we will be the first state to introduce and pass this legislation.

As the shadow minister indicated, we are in agreeance with this legislation, but we are at a bit of a crossroads again with energy in this state and this nation. As has been indicated, the terrible war in Ukraine, where gas supplies are impacting Russia and Ukraine, is having a worldwide effect. It just goes to show how important gas is to everyone in the world, particularly as a transition fuel moving on into the future as we slowly move away from coal and into the clean energy future, as we are.

South Australia is the lead jurisdiction with the amount of wind generation and solar generation we have in this state. That is part of the reason why we are building the interconnector through to New South Wales—so that we can not only assist in that national energy market but also send renewable energy through to New South Wales when we need to and import energy back when we need to.

It is interesting, and there is a lot of debate in the current climate around gas. Obviously, a huge amount of gas is exported as LNG from around the country, whether it is from Western Australia, off Darwin or off Queensland. I watched a program the other day about opening up the Scarborough field off Western Australia. It is a field 400 kilometres offshore and there is debate about whether or not it should go ahead. We have just seen in a very short space of time what happens with disruption overseas, and we will have gas as a transition fuel for many, many years to come.

We have certainly seen issues with base load where, if you shut it down too quickly, as happened here in September 2016, you have a total state blackout. There are now issues because we have had coal-fired power stations close down, some are down for scheduled maintenance and some are down for emergency maintenance. I heard some dialogue the other day about the Loy Yang A generator near Traralgon in Victoria having difficulty getting spare parts, and they will not turn up until September. If anyone has been down there to have a look at how things operate, it is pretty spectacular, with open-cut mining of coal for that energy.

Part of the issue is around some of the issues that companies have to deal with in obtaining gas. I have said here multiple times that it is now 40 years since I worked in the Cooper Basin. I know the member for Chaffey worked there at a similar time. A friend of mine still works in the gas industry 40 years down the track. He has been there long enough to dictate when he goes now, and he has worked offshore pretty well all around Australia, whether in Bass Strait, off the Western Australian coast or New Guinea, so he has a wealth of experience.

Recently, my friend David assisted in a job at Karratha, working with INPEX on an offshore well. The operators need to be able to access the gas. I certainly worked in a field where we were able to exploit more opportunity working with Santos, Delhi Petroleum and others, because we do see how vital a resource it is, not just locally but around the world. When we come through this period of cold snaps, especially in the Eastern States, I note that the Cooper Basin has a direct feed into Sydney, for instance, but there are some gas fields in New South Wales that have not been opened up.

The Hon. A. Koutsantonis: Some in the Otway too.

Mr PEDERICK: Yes, some in the Otway.

The DEPUTY SPEAKER: The minister is being disorderly because he is not in his chair.

Mr PEDERICK: Chuck him out! It has all come to where we now have a crunch. It is interesting that in the debate around energy some are saying, 'Hang on, have we let coal go away too quickly?' because they are talking to operators like the ones who operate the plant down in Victoria: 'How quickly can you get it online?' Certainly in the gas industry, gas generators can fire up extremely quickly and they are often used in reserve, especially in South Australia, if there is not enough solar and wind.

The issue we have at the moment is that, because there is such a high demand on energy, the gas generators generally would have a huge amount of gas over a period of time contracted so they can use it for generation. However, if they are asked to turn on more turbines than perhaps expected early on in forming those contracts, they have to buy gas at the spot price, and that is where the issue comes in. That also depends on whether the gas is available, noting the export demand and the upgraded domestic demand we have at the moment.

It is a real issue, noting, though, that if the gas can be supplied and the generators are prepared to pay the spot price they can generate that gas, but they will probably generate at a loss. There is a sequence in the marketing regulation set up where they can get some relief for paying above the board if they are required by the regulator to generate more power for the state and, essentially, the country.

It is an interesting time in generation. I know that this is expanding on it a bit, but gas is not dissimilar to hydro generation, and Snowy Hydro 2.0 is on the go. With respect to Snowy Hydro, those turbines can be started within 90 seconds. As long as the water is there to spill, you can get that generation going. Whether it is hydropower or gas generation, they can work alongside the wealth of renewables we have in this state to provide our much-needed energy. As I said, we are starting to get found out a little now with the cold snap, whether it is for heating or just for running everything we need—running lights or energy for running factories—it is a vital resource. We rely on it for virtually everything we do during the day.

This bill will look at more transparency in the market, and we need to make sure that our providers of gas have as much opportunity as possible. While I am talking about that, I want to congratulate Kevin Gallagher and Santos on the hundreds and millions of dollars they are investing in carbon capture and storage in the Cooper Basin, utilising some of those wells that have been fully exploited to put carbon back underground. I congratulate their forethought in doing that.

It is a major commodity that we need to make sure we can access for all time. For domestic use, we use electricity all the time, and gas is that transition fuel that will be going on into the future, noting that if we did not have it industry costs would blow out because industry is the biggest user of gas. What happens with all of this—with the price of gas going through the roof—is that the cost of living goes up for everyone, which is a real danger not only to South Australians but to Australians, and you see it reverberate around the world.

We are supporting this bill in regard to market transparency of a national gas market. We are the lead legislator in the country. Hopefully, when this legislation passes, it will assist in making sure that everyone, whether it is regulators, suppliers or people in the distribution market, can work more efficiently for the betterment of South Australia and Australia.

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (12:14): Can I start off by thanking the shadow minister for his contribution and his support for its passage through both houses of parliament. I do note that this is legislation that was introduced by the previous government. It had been settled by the make-up of the energy ministers over the last four years.

Unfortunately, the former government prorogued the parliament, due to some troubles that they were facing during that period, and this bill was unable to be passed. It had bipartisan support then. It could already be in place now. However, it is not, and that is to the detriment of the National Electricity Market, but we will try to pick it up. This is a package of three bills; two are on their way. Obviously, market transparency is very important, pipeline transparency is very important and, of course, market monitoring is very important.

To put it frankly, the NEM is in serious trouble in Australia. There has never been a more precarious time for the National Electricity Market than today. What I have seen in the market is comprehensive market failure, from Queensland right through now to our borders. It is because Australia has no line of sight over one of the most essential utilities that we use every day.

The member who spoke earlier about the importance of electricity should reflect, as Sir Thomas Playford looks down on us disapprovingly, on what Playford did when he was Premier, when he nationalised electricity operations in this state because we were being held to ransom by New South Wales coal. I have to say, seeing what is occurring now in the NEM is not dissimilar to what was occurring back then.

Let's be clear: we mined coal last year in roughly the same amounts. We had a winter last year with roughly the same level of temperatures. We will have a summer. We got gas out of the ground last year in roughly the same amounts and we exported gas last year in roughly the same amounts, yet this year there is an amazing shortage. These shortages throughout the market are seeing excessive market power being utilised by some in the market, and that is causing a lot of distress in the market.

It would be nice to have some backup generation that the state could rely on, that we controlled and owned and that was not run for profit, but the former government privatised it in their first year in office. Those generators, half of which are still running on diesel, which the former government complained about, are now not at the call of the government to operate as system security. That is disappointing. Now we are completely reliant on the market. The South Australian government owns no generation at all to protect our citizens from any shortfalls that might occur.

I am very hopeful, though, that the Australian Energy Market Operator, which I am meeting with today, can get us through this very challenging period using the mechanisms it currently has within the market to ensure that any lack of reserve notice 3s that are published do not come to fruition. This bill goes part of the way to helping future events deal with that. It will not necessarily help us with this current event that we are in.

I am grateful for the support of the shadow spokesperson, who I do think has a genuine interest in this area and is trying to do his very best, and I welcome his support. I gave bipartisan support in the four years I was in opposition on matters of the national energy cabinet committee for energy ministers' operations, through the role of the lead legislator here in South Australia. It is difficult and the rest of the country is waiting. With those few words, I commend the bill to the house. I do not think it is the wish of the house to go to committee.

Mr Patterson: Just a few questions—not long.

The Hon. A. KOUTSANTONIS: Alright, we will go into committee.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Mr PATTERSON: From what I can tell, in terms of the changes between this and the previously introduced bill, the only changes—which are basically title based—are the name of the bill and then in section 294FA(9) or the clause where it refers to the act itself as 2022. Is that the case, or have I missed something?

The Hon. A. KOUTSANTONIS: The advice I have is that it is the same, other than changing the date from 2021 to 2022, because it is 2022.

Mr PATTERSON: That is right. In terms of the overall impact of this bill once it is in operation and with the bulletin board and Gas Statement of Opportunities, what does the minister expect the benefit will be to gas users, businesses and households?

The Hon. A. KOUTSANTONIS: The intent of the bill is to create greater transparency, and transparency is the key here. Its aims are to reduce search and transaction costs experienced by market participants, facilitate more effective investment across the gas supply chain, enable more informed and efficient decisions to be made by all gas market participants with more information. The aspiration is to facilitate a more effective competition in the wholesale gas transmission, gas storage and retail segments of the supply chain. With greater transparency, hopefully we get better regulation from lawmakers about where the bottlenecks may be.

Mr PATTERSON: In the communiqué from the energy ministers' meeting last week, which I mentioned in my speech, they mentioned that there could be additional transparency measures outside of this. Do you have any information from that meeting to pass on to the committee?

The Hon. A. KOUTSANTONIS: As I said in my closing remarks, there are two other pieces of legislation that I think are on their way. One is about pipeline transparency—what is held pipelines—and the other is about market monitoring, about market behaviour, market power. Yes, this is part of a broader package that has been worked up. Obviously, we need to have support of whatever the make-up is of the national cabinet framework, whether it is an energy conference, an energy ministers' conference or a national cabinet process. We will need to have agreement from all states for this to apply. So, yes, this is the beginning of a series of measures.

Clause passed.

Clause 2.

Mr PATTERSON: The commencement of the act is fixed by proclamation. How long after that do you expect the changes to come through to allow for the transparency reforms to occur to the business bulletin and the gas statement opportunities?

The Hon. A. KOUTSANTONIS: We estimate that the rule changes will be put in place within the first six months, so the operation will begin by then.

Mr PATTERSON: Will that be enough time to allow the Gas Statement of Opportunities report for 2022 to have these new rules, or will they not come into effect until 2023?

The Hon. A. KOUTSANTONIS: My advice is that that should be plenty of time.

Mr PATTERSON: My final question is: in terms of the pricing information powers given to the AER, the intention was to wait for them to come online after the ACCC has finished their gas inquiry in 2025; is that still the case?

The Hon. A. KOUTSANTONIS: I am advised that is still the case.

Clause passed.

Clause 3 passed.

Clause 4.

Mr PATTERSON: In terms of the definitions, one of the definitions outlined is that of the natural gas industry and the subsection outlines activities relating to processable gas, natural gas, natural gas industry facilities and services provided by means of natural gas industry facilities. It outlines those particular activities. New paragraph (c) talks about 'any other activities specified by the Regulations for the purposes of this paragraph'. Is it intended that there will be other facilities added to the initial set of regulations?

The Hon. A. KOUTSANTONIS: To the initial set of regulations? No, I do not think so, but if there are I will report back to the house immediately.

Mr PATTERSON: I have a question in a similar vein. When we talk through the definition of the natural gas industry facility, new paragraph (g) of that definition talks to 'another facility of a type specified by the Regulations'. So, outside of the ones listed—a pipeline, a compression service facility, a gas processing plant, an LNG facility, a storage facility, or a user facility—do the initial regulations propose to have any other facilities added?

The Hon. A. KOUTSANTONIS: The advice I have received is no.

Clause passed.

Clause 5.

Mr PATTERSON: This section talks about it applying to more than one person (a group) that is carrying out a controlling facility activity. Is the intention that, if there are multiple parties operating a facility, only one of those parties is responsible for reporting back to the bulletin board, GSOO or AER?

The Hon. A. KOUTSANTONIS: With the indulgence of the committee, if I could ask the indulgence of the member for us to get back to him on that question between the houses. Would that be acceptable?

Mr PATTERSON: Yes, thank you. The intent is just to see whether it is trying to avoid multiple reports being put up on the one facility; you just get a key responsible party to do it on behalf of all of those. I am happy to move through this clause.

Clause passed.

Clauses 6 to 9 passed.

Clause 10.

Mr PATTERSON: In regard to new section 46A(2) about price information order, I am seeking some clarity around the intent of this. It provides:

(2) The order may require a person to whom the order relates to prepare, maintain or keep information specified in the order in a manner and form specified in the order.

Is one of the aims of that subsection to allow record keeping over a period of time so that, once the information has been provided, those records are retained for a number of years?

The Hon. A. KOUTSANTONIS: The shadow minister is correct in saying that, yes, we want to maintain records. What we do not know is the period of time. It could be seven years; I do not know what the period of time is. It is a question I can get an answer for between the houses.

Clause passed.

Clauses 11 to 35 passed.

Clause 36.

Mr PATTERSON: Clause 36 relates to the South Australian minister making the initial rules relating to enhanced market transparency. In the subsections of this new section, subsection (8) provides:

(8) Rules in the nature of a derogation may be made under this section even though no request has been made for the derogation.

The question relates to the fact that on ABC radio the minister outlined that the former Marshall Liberal government was preparing to introduce this legislation with a derogation, which he is quoted as saying is a change that would have excluded South Australia from the transparency measures. Previously, I have asked if there were any changes in the bill between 2021 and 2022. I could not see any changes, nor to the rules, so I am making sure: were there any derogations, or is that in fact not the case?

The Hon. A. KOUTSANTONIS: There are three pieces of legislation that we are talking about as part of this transparency package. There is the one we are dealing with now, there is the one on pipelines—which was called the National Energy Laws Amendment (Gas Pipelines) Bill 2021, which the former government was developing in conjunction with AEMO, the AER, the AEMC and the energy ministers—and market monitoring. Within that gas pipeline amendment bill, the former government wanted to derogate South Australian pipelines from transparency, and I overruled them on coming to office.

The work that had been done by the department on these three pieces of legislation included the derogation, not on this bill but as part of the package. I do not know why the decision was made by the previous government. I suspect it was that there were some proponents who were seeking a derogation to keep their financials and their contracting secret. There might be some good reason for that, but my view has always been that sunshine is the best disinfectant.

We should be open and more accountable. We should allow all contracts to be scrutinised by the Energy Regulator, especially in a market like this. I was talking about the package, not this legislation. If I have confused the member, I apologise.

Mr PATTERSON: Thank you for that clarity. That being the case, I do not need to compare the differences or ask questions on this bill around that. You have confirmed that there are no changes in this bill and that there were no derogations.

Clause passed.

Remaining clause (37) and title passed.

Bill reported without amendment.

Third Reading

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (12:34): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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