Bills

Petroleum and Geothermal Energy (Hydraulic Fracturing) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 24 September 2014.)

The Hon. D.W. RIDGWAY (Leader of the Opposition) (17:25): I rise on behalf of the opposition to speak to the Petroleum and Geothermal Energy (Hydraulic Fracturing) Amendment Bill No. 32. The bill in question seeks to prevent the fracking (or hydraulic fracturing) on any land in South Australia over the next two years. Following this arbitrary two-year period, the bill goes a step further and, on my reading, the bill will continue to prevent fracking (or hydraulic fracture stimulation) on land used for the purposes of primary production indefinitely.

I would like to make it clear that the opposition strongly supports the mining sector and acknowledges its importance as a key growth generator in our economy. As such, we cannot support a moratorium on fracking and to do so would have detrimental effects on our state's economy, prosperity and job creation prospects going forward.

It is a proposal with an extremely green agenda and it makes no attempt to balance South Australia's economic security. Our manufacturing sector is on its knees and we will be relying increasingly on the mining sector, as we will continue to rely on the agricultural sector as we have done for many decades. Both industries need some protection and the Liberals strongly believe that this extreme approach would not be productive for our state.

It is also worthy to note that the bill would still allow hydraulic fracturing for the purposes of trying to generate geothermal energy. Hydraulic fracturing for oil and gas is typically done in shale rocks to release the oil and gas that exists within the sealed pores in the rocks. Hydraulic fracturing for geothermal energy is typically done to extremely hot, solid, granite rocks to break them open so that water can be forced in, resulting in steam or very hot water coming back to the surface where it is passed through a heat exchanger and that heat is then converted into electrical energy.

Because of the difference in the nature of the rocks the fracking or the 'fracs' for geothermal require blasts three to five times stronger than for oil and gas, so I am advised. I think it is strange then that if someone had a genuine concern about the possible negative impacts upon underground water or of latent seismic activity, hydraulic fractures for geothermal would be of much more concern than those for oil or gas.

This clause in the proposed bill illustrates the Greens' ideological preference for geothermal energy and its simplistic opposition to the hydrocarbon industry. These industries are far too important to our state for the future to be decided on ideology and politics rather than fact. It is for these brief reasons that I indicate that the Liberals will be opposing the bill.

The Hon. J.A. DARLEY (17:28): I rise to indicate my support for the second reading of this bill on the basis that there is a need for robust, independent assessment to ensure prime agricultural land and water resources are not adversely affected by fracking. It is essential that we have benchmark monitoring before mining activity takes place to ensure that farming land and the rights of farmers are not undermined. We need to find a balance between mining and farming and the least we can do is to have a debate on the issue.

The Hon. T.T. NGO (17:29): Let me begin by saying that the environment and the rights and prosperity of all South Australians is of great importance to the government. The government opposes this bill as it would add another layer of unnecessary restrictions and duplication of processes without providing any new protection, or any protection, either for the environment or for landowners that is not already provided by the existing regulatory framework. What is more, the bill seeks to place a ban on hydraulic fracturing technology, a technology which is well regulated and which has been used safely and without impacts in South Australia in more than 700 wells and more than 1,400 fracture simulation stages over the last 40 years.

All potential impacts with relevance to hydraulic fracturing are already clearly outlined in publicly documented environmental reports, which all licensees are required under the act to have completed before they can do anything on the ground. The act requires statements of environmental objectives to be prepared on the basis of these reports, and these clearly state that contamination of surface waters, shallow groundwater resources, aquifers or soils must be avoided. They also state that there is to be no uncontrolled flow to surface and that cross-flow between separate aquifers or hydrocarbon reservoirs must be prevented. These are the standards these activities abide by, and it can be demonstrated that these objectives have been achieved.

The objectives are designed, as I have said, as a result of detailed environmental impact reports, which must be completed for all activities, as required by the Petroleum and Geothermal Energy Act. These reports cover a broad scope of potential impacts as 'the environment' in the act includes not only the natural environment but also the social and economic environments, and so includes aspects such as health, wellbeing and existing users of land. These reports are required as a matter of course by all licensees, and they exceed the requirements of the report proposed in the bill.

Reports cover the potential impacts and management strategies of a range of activities proposed or they can be specific. In fact, last year an environmental impact report and statement of environmental objectives was thoroughly consulted on and completed specifically for hydraulic fracturing and made available, over an extended period, for public comment prior to finalising.

The other proposal in the bill is to prevent hydraulic fracturing activities in certain areas. The petroleum industry in South Australia has a long history of compatibility with other land uses. Under the act, landowners are consulted early and are involved in the setting of environmental objectives.

Landowners, who, by definition, also include native titleholders and claimants, concurrent licence holders, licensees and, in fact, anyone with an interest in the land, must be provided early with good information so that they can make informed decisions, and they have a right to object to activities on their land. There are also clear processes for working together and for bringing matters to court. For some areas where activities are not compatible, including in some protected areas, activities are already prevented under the existing provisions of the act.

I invite honourable members to contact the Department of State Development for more information on the petroleum and geothermal regulatory framework in South Australia and to discuss how the Petroleum and Geothermal Energy Act protects the environment and the rights of existing land users. Hydraulic fracturing is used in conventional and unconventional wells, and preventing its use would limit an industry that has enormous potential to provide immense benefit to South Australia. Security of supply, jobs and other flow-on benefits would be at risk.

Despite the fact that hydraulic fracturing has been completed here safely for many years and is already regulated under the existing act, the claims that have been made in relation to hydraulic fracturing interstate are all related to shallow coal seam gas. Shallow coal seam gas is very different to the deep gas resources that are being developed in South Australia and poses different potential risks.

The South Australian deep gas resources have much smaller surface footprints and, as they are much deeper, there are thousands of metres of rock between the resource where the hydraulic fracturing would occur and the shallower potable or beneficial aquifers. Furthermore, the imposition of the bans and moratoriums in the other states referred to by the honourable member are very much a reflection of the absence of an appropriate and effective regulatory framework in those states similar or equal to the petroleum and geothermal legislation in South Australia.

To reaffirm, the existing regulatory framework is robust and as one of key objectives it protects the environment and the public from any potential risks and impacts of petroleum and geothermal activities. Hydraulic fracturing is just one technology already well regulated under the Petroleum and Geothermal Energy Act and has been performed in this state in over 700 wells safely and without harm over the last 40 years. I do not understand why, if our state has an industry that is well regulated and has worked well and safely for decades, we need to go down this path and look for potential problems.

Our state is the nation's leader in regulating the hydraulic fracturing industry. There are strict processes to address all potential environmental impacts before companies can operate. On top of that, interested parties were consulted in the development of the process and are also well aware of this process. Other states are looking at us to replicate what we are doing. We have an industry that is providing security for the supply of gas for our state and will provide thousands of direct and indirect jobs to support many South Australian families.

I could understand that, if there were problems with large-scale contamination or something similar affecting the aquifer, like killing our farming stock or severely impacting on the health of local people, such as you often see on the 4 Corners program, that cause lifetime damage our environment and land, these would make it necessary to have a report of inquiry.

In this case the fracturing by the natural gas industry has been operating safely and without harm for over 40 years. Why do we need to pick on this industry just because other states, like New South Wales and Queensland, have problems with theirs? As I said earlier, in other states hydraulic fracturing is related to shallow coal seam gas—ours is deep, and these are two different environments—which is causing environmental issues and problems with the farming community.

Most importantly, those states have not appropriately and effectively regulated the industry like South Australia. I am not saying there are no problems with hydraulic fracturing; of course there are. Anything to do with using the land for human resources in terms of fuel or food has an environmental impact in some way. But South Australia has strict guidelines that address all potential impacts on aspects of the environment and they have been working safely, as I said, for the past 40 years.

A good friend of mine stopped eating beef because of the damage cattle cause to the land. He told me that cattle running around and stomping on land, and the manure they generate, impacts greatly on the environment. Similarly, with farming practices such as wheat and barley, he said that the chemicals farmers use also impact on the environment. Do we need to look at them to see if there are potential impacts? Will this sector be next? I hope not, Mr Acting President.

In South Australia, and in Australia generally, in many industries we have strict guidelines to protect the environment compared to the rest of the world. We do have a hydraulic fracturing industry that is well regulated and has been operating safely for the past decade in providing jobs and economic benefits to this state. We should be congratulating the industry, not the other way around, where they are being put under the microscope and then potentially banned from operating.

Further, this house should have a motion that commends this industry. I suggest it should read something like this: the parliament congratulates the hydraulic industry for having the best practice in Australia and probably the world. The parliament acknowledges the importance of this industry to the state's economy today and into the future. Therefore, the parliament should encourage the industry to continue to strive for best practice and look for cutting edge technology to further improve the fracturing process. Also, the parliament encourages the government to give the industry a few more million dollars in funding because of it. I am just kidding on the last bit about the funding! I do hope the Treasurer picks himself up from the floor and relaxes. I urge members to oppose this bill.

The Hon. K.L. VINCENT (17:43): I speak today very briefly on this bill. Both the issue and practice of hydraulic fracturing are new to South Australia and I appreciate that it became quite an emotive and divisive issue during the state election campaign in particular earlier this year, particularly in the South-East of the state. I would like to say at this point as well, that while Dignity for Disability has released a policy opposing the practice of hydraulic fracturing in this state's farming areas, or primary production regions, we understand that what is proposed in South Australia in terms of fracking may be quite different from practices that have been carried out in places like Queensland and the United States.

I have also met with Beach Energy to further educate Dignity for Disability on this issue, and I appreciate their Chief Executive, Reg Nelson, and his staff, taking the time to meet with me and discuss this very important issue. I was interested to learn about the work that they have done in South Australia over many years and also their corporate ethics in contributing back some of their profits to the community. However, I would also note that the community in the South-East have not felt adequately consulted about plans that Beach Energy have, and I think that a ban on fracking for South Australia at present would be wise.

The Hon. R.L. BROKENSHIRE (17:45): I will be brief, and in order to make this chamber more effective and efficient I will ask for concurrence to talk about the two bills in one that the Hon. Mark Parnell has put forward. Family First's position regarding the first bill (hydraulic fracturing) is consistent with our position before the last election when a very similar bill was put before the house. Since then, some things have changed: one only today, and the second one is that the Liberal Party opposition are moving for an investigation into this situation in the lower house.

We would like to see what happens to that vote because, given all of the representation that we have had, we think it is time that a parliamentary inquiry was set up to look at this whole issue so that we can actually speak in a more constructive way, from the point of view that at the moment we have had some input from one side of the debate and some input from the other, but we have not actually had the parliament in any way have a look at what we have analysed as a parliament and put a report to the parliament.

Hopefully, the government will see some wisdom in supporting the inquiry in the lower house. If indeed they do not, then I flag to the Legislative Council that we would consider a form of inquiry in the Legislative Council, or indeed listening to what other colleagues and parties may have to put forward so that, whether it be a select committee or a standing committee, we could then consider that in the upper house. That is our preferred position, because we would then feel far more confident to be able to come up with an absolute position regarding hydraulic fracturing. While the Hon. Mark Parnell and I are sometimes diametrically opposed, when it comes to the issues of mining versus farming we actually have quite a lot of commonality.

The Hon. I.K. Hunter: You are deep green.

The Hon. R.L. BROKENSHIRE: Well, I am green and blue and all those colours, especially when I am being attacked by you when you are a grumpy minister. To get back to the point, the thing today that has absolutely confirmed that we need to see how we can get a committee is that I am advised that, for political reasons only, the government have decided today that they will be proroguing the parliament. I just shake my head. We have had only 44 days in this parliament since the parliament was last prorogued and we are going to see another proroguing of the parliament.

Effectively, we might as well go home now, because anything that we do now we are going to have to come back and do again. We are not going to sit for the optional sitting week, so we really only have two weeks and one day left and then we start again—and look at the workload of the staff, notwithstanding the expense. So, now that I have found out that we are definitely seeing the parliament prorogued, there is no point, I am sorry, in supporting probably any legislation from private members, because it is not going to get anywhere down in the other house if indeed it is passed here. We will have to start again.

We certainly have a lot of empathy for the second bill that the Hon. Mark Parnell has but, based on what I have just said, plus the fact that I am in the final stages of bringing in a new right-to- farm bill, which is actually having a comprehensive section drafted to do with entitlements and fairness between farming and mining and which also looks at two other impediments to farming (native vegetation and natural resources management), and the fact that we are now told we are going to be prorogued, I am in a position where I would like to have listened to the second reading speeches and read those with my staff but not actually gone to a vote on this second bill.

Parallel to that, depending on what comments we are about to table in the chamber, we may end up supporting the Hon. Mark Parnell's bill or, indeed, the parliament and the Hon. Mark Parnell might see some wisdom in what we are putting forward, because we are actually aiming at similar things. I summarise by saying let us get a parliamentary committee up to have a look at the hydraulic fracturing, and let us remember that this government—clearly for only one thing, political purposes—is proroguing the parliament. When we come back in February we will be starting again, and we look forward to being contributors at that time.

The Hon. B.V. FINNIGAN (17:50): I support the second reading of this bill. I would be extremely unlikely to support the third reading; however, I guess it is customary in this august house for bills to progress (unless it is a conscience vote) to enable further debate and allow people to ventilate issues which the government of the day can then consider in terms of whether or not they will agree to the bill.

The debate has widened somewhat into the broader issue of fracking, but I am not sure that this bill is the best way to address the concerns that a lot of people have raised. I suspect that fracking is here to stay in Australia and around the world, regardless of what the parliament of South Australia considers—not to say that it does not have the power to do something about it.

I have to say that I am somewhat puzzled by Her Majesty's Loyal Opposition. They seem to be saying that they are not supporting this bill and they want to have a select committee in the lower house (or perhaps it is a joint committee, I have not actually checked the Hansard). The rationale for this committee seems to be that it is not going to come up with any new conclusions or examine the evidence in a way that will lead to new policy, but it wants to give people the opportunity to have their voice heard.

Of course, while it is very important that the people in the South-East, and indeed anywhere, have their opinion listened to, I cannot quite see the logic of having a select committee whose outcome is almost predetermined, in that it is a 'going through the motions' exercise rather than a genuine attempt to make an assessment of the issues. So I am not quite sure what the Liberal party's approach is to this. Clearly they do not want to upset the mining industry and are a bit worried about the blowback that has already happened, but at the same time they want to look after their seats in the South-East.

I think they are somewhat at sixes and sevens, and it will be interesting to see what happens if the government decides not to support a select committee in the lower house—although they may because the government would have the numbers on it, which they would not in here. It will be interesting to see what the Liberal Party decides, if indeed it does end up a matter for the Legislative Council, as to whether or not we establish a select committee here.

However, again, the purpose of a select committee is to thoroughly investigate an issue and come up with conclusions and recommendations. I do not think the point of a select committee is simply to air issues. There is a whole range of ways in which community debate, information and education can happen without there needing to be a committee of the parliament. With those brief words, I am happy to support the second reading to enable the debate to progress.

The Hon. M.C. PARNELL (17:54): I will begin by thanking the Hon. David Ridgway, the Hon. John Darley, the Hon. Kelly Vincent, the Hon. Tung Ngo, the Hon. Rob Brokenshire and the Hon. Bernard Finnigan for their contributions. It is clear from the contributions that have been made that this will not be progressing any further tonight, but I do want to make some observations on some of the positions that other parties have taken. I will start with the opposition. The Hon. David Ridgway referred to this 'green agenda', the same green agenda that the Liberal government in Victoria, considering exactly the same issue in exactly the same geological formation, thought was worthy of a two-year moratorium. That is the Liberal Victorian position.

So, the Liberal South Australian position is clearly all over the show—it is all over the show. You have people in the South-East, Troy Bell, the member for Mount Gambier, who I think is genuinely listening to the people in his electorate but he is a lone voice and at the end of the day he will vote with the party. The Hon. David Ridgway referred to what he called a 'simplistic opposition to hydrocarbons'. Well, he would say that, coming from the party where coal is good for humanity, which was a recent pronouncement from the Prime Minister. He did not say, coal historically has achieved some development issues in Western civilisation. He said coal is good for humanity. He wants more coal: more coal ports, more coal trains, more fossil fuels.

Which bit of the Intergovernmental Panel on Climate Change's findings about having to leave 80 per cent of remaining fossil fuels in the ground don't the Liberals understand? Deep down they do not take climate change seriously. What is even worse is they do not take the concerns of local farmers seriously. They have not heard that every local council in the South-East has called for a moratorium, protection of farmland, parliamentary inquiries—they are ignoring those calls.

The Hon. Tung Ngo for the government, his response was as expected: 'Nothing to see here, folks. Move along. Fracking might have caused problems elsewhere but we're different in South Australia. Nothing can go wrong here.' Santos fined thousands of dollars for water pollution from fracking operations interstate: 'That couldn't possibly happen here. There's nothing to see. Our existing processes are more than adequate and states like Victoria, they only have moratoriums because they haven't got any laws.' Well, excuse me, Victoria has had a gas industry for decades. As a little kid in Victoria I grew up with gas from the eastern part of Victoria. They have had regulations for decades and it is an insult to those states to pretend that they are a regulatory vacuum, which is why a moratorium is appropriate in Victoria but not appropriate in South Australia.

The Hon. Bernard Finnigan suggested that fracking is here to stay. Well, not if the farmers of the South-East have their way because they are determined to make sure that their productive farmland is protected. If people want any indication of the hysteria being driven by industry around this you only have to look at the Chamber of Mines' press release from last week when the Liberals dared suggest that we might have an inquiry into fracking and all of a sudden the Chamber of Mines is out there saying that the economy would be destroyed and that business confidence would be in ruins if anyone dared ask any questions about this industry. What an outrageous thing to say.

Members have referred to the fact that an inquiry was suggested today by Mr Troy Bell, the member for Mount Gambier in the other place. Two bits of information that are critical: first of all, he has brought it in for debate on a non-sitting day, 10 December. We will not be here on 10 December, and as we have just found out today parliament is going to be prorogued. So, if you think that that Liberal lower house inquiry has any legs, it cannot possibly get back on the agenda or come to a vote until March of next year.

March of next year: that is how serious the Liberals are about an inquiry. You get an opportunity next Wednesday to vote for an inquiry. It is back on our agenda and next Wednesday we can find out whether the Liberals are serious about doing what the farmers of the South-East say is important; that is, a thorough parliamentary inquiry into this industry.

I see the numbers are not with us today. Enough members have spoken and put their views on the record that I do not need to divide, but I am disappointed that this sensible bill which would have protected our farmland, protected our conservation land, protected our residential land and given time for an inquiry will not be successful today.

Second reading negatived.