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Legislative Council - Fifty-Fourth Parliament, First Session (54-1)
2018-06-06 Daily Xml
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Bills

Petroleum and Geothermal Energy (Underground Coal Gasification) Amendment Bill

Introduction and First Reading

The Hon. M.C. PARNELL (16:26): Obtained leave and introduced a bill for an act to amend the Petroleum and Geothermal Energy Act 2000. Read a first time.

Second Reading

The Hon. M.C. PARNELL (16:26): I move:

That this bill be now read a second time.

This is a bill to ban the controversial, dirty and dangerous practice of underground coal gasification. For the benefit of newer members in particular, this is a process not to be confused with coal seam gas or fracking for gas; I will have more to say about those topics later. This is underground coal gasification. At its simplest level, it involves igniting or setting fire to coal seams whilst in the ground. Holes are drilled into the coal seam and it is injected with oxygen, with air or with steam to basically ignite the coal seam. Other wells are drilled in order to attempt to capture the gas that is produced by that process, the so-called synthesised gas.

It is a process that has ended in tears in most places in the world where it has been tried. It is an issue that I have raised many times in this parliament and in the previous parliament. In fact, this is the second time I have introduced this identical bill. Back in July 2016, I raised the issue when I asked the minister for Aboriginal affairs about the impacts of the proposal by Leigh Creek Energy on Adnyamathanha heritage sites. I also asked the minister for the environment, back in July 2016, what steps he was taking to avoid this environmental disaster and whether he would follow the lead of Queensland and ban UCG in South Australia.

Again, the same year, I followed up with a motion in this chamber calling on the government to in fact follow the Queensland government's lead. Four months later, in 2016, I asked the minister for climate change what he was going to do to pull his other ministerial colleagues into line and prevent underground coal gasification from trashing South Australia's environmental reputation by unnecessarily exacerbating dangerous and irreversible climate change.

On 30 November 2016, I introduced a bill identical to the one that I reintroduce today. That bill sat on the Notice Paper for 11 months before being voted on in October 2017. The result, of course, was predictable and that is, despite an overwhelming and growing body of evidence that underground coal gasification was simply not worth the risk, the Liberal Party dismissed the bill in less than two minutes, in just 259 words, and the more effusive Hon. Tung Ngo took slightly longer—he took 312 words—before declaring on behalf of the Labor Party that the legislation had no merit.

What made the dismissive attitude of both the old parties in government and opposition even more disappointing was the large number of MPs who had in fact attended a briefing that I arranged here in Parliament House with Professor Campbell Gemmell, who members might remember was the chief executive of the Environment Protection Authority in South Australia. He is now a renowned international academic and an adviser to governments all over the world. It was Professor Gemmell's report to the Scottish government that convinced them to ban underground coal gasification.

If the old parties thought that, faced with these rejections by the old parties, the Greens would give up on the campaign to ban underground coal gasification, then they are sadly mistaken. This issue is far too important to give up. We have now had an election, we have got a new government and we have new ministers, so the Greens are determined to keep this important issue on the parliamentary agenda.

In fact, when parliament resumed, this was the first issue on our agenda. I raised underground coal gasification in my first matters of interest speech last month, and again in my Address in Reply to the Governor's speech opening the parliament. The reason I put this on the record is that I could go back over all of the material and recount all of the environmental arguments, look at all of the accidents and disasters that have happened in Australia and around the world, but I will not do that; I will not revisit all that information because it is on the record and members can look it up for themselves, or I would be more than happy to compile a dossier of material for them.

What I will remind members of is the previous attempt at underground coal gasification in Australia, which was a number of projects in Queensland, including the Linc Energy project at Chinchilla and elsewhere, that resulted in what the Queensland minister described as the biggest pollution incident in that state's history. It resulted in the biggest environmental investigation in that state's history and it resulted in the biggest prosecution and fines that flowed from the conviction in that state's history—$4.5 million was the fine, and five executives are still awaiting trial.

The clean-up cost to the Queensland government and the Queensland taxpayers is immense. They are desperately trying to get another $5.5 million out of the directors of Linc Energy to help with the clean-up. It has been an absolute disaster at every level. But, guess what? It was not even a full commercial operation, it was a trial, just as is being proposed by Leigh Creek Energy for South Australia.

I have brought this bill back to the parliament now because the need for it is growing more urgent by the day. The reason I say that is because the new government, just like the old, is oblivious to the looming potential environmental crisis that is underground coal gasification. On 12 April this year, the new mining minister approved Leigh Creek Energy's statement of environmental objectives and its environmental impact report, and that gave the company, Leigh Creek Energy, the right to apply for further approvals to actually commence on-the-ground works.

For example, on 14 May, approval was given for the construction of facilities on the ground. On 29 May, permission was given to drill below the ground, that is, their process and monitoring wells, and there are two more phases that are yet to be approved. The point I am making is that these latest approvals make it almost inevitable that the second and third phases will be approved. The second phase is facility testing and the third phase is gasifier commissioning and operation. The trial will be underway the way things are going, and the dire environmental consequences that we saw in Queensland could become a reality in South Australia.

The simple fact of the matter is that the further advanced this project becomes the harder it is to pull the plug. Do you think Leigh Creek Energy will simply take it lying down if the government says in a year or two's time that they have had a change of heart and they decide that underground coal gasification is actually quite a bad idea? Are they going to take it lying down or are they going to put their hand out for compensation? I bet you it is the latter.

At the risk of giving people another history lesson, people might remember that Leigh Creek Energy was in fact the new incarnation of a company formerly known as Marathon Resources. Marathon Resources was the company that was sent packing from the Arkaroola Wilderness Sanctuary as a result of their appalling environmental practices, and because they were so advanced in their spending, they went to the government with their hand out and ended up getting $5 million of taxpayers' money, which was an outrageous result, but it just goes to show the further we let these companies go with their unsustainable projects the harder it is to extract ourselves and the more likely that we will end up having to pay them compensation.

The government says in relation to underground coal gasification that it is looking for evidence of why it is a bad idea and why approvals should not be granted. What is remarkable is that the evidence is not that hard to find. As I have said, they only have to look across the border into Queensland. Queensland have legislatively banned underground coal gasification just as I am urging South Australia to. But a number of other experts have come out more recently.

In particular, two academics from RMIT University, Associate Professor Gavin Mudd and Dr Matthew Currell, have weighed in, basically casting serious doubts on the environmental assessment that has been undertaken by the company, and also the approvals that have been granted by the government. In addition to those particular experts, we also have the ongoing issue with the Aboriginal community up there. The Adnyamathanha Traditional Lands Association are dead against this project. Their CEO, Vince Coulthard, was quoted in InDaily a week or two ago saying that he was disgusted with the minister for signing off on this approval. To quote Mr Coulthard, he said:

Our land has been desecrated enough; the destruction and the poison must stop.

I note that the new Premier has stopped fracking in the south-east, so why has he not stopped this toxic project in our area?

I think that is a very good question. The mining minister in another place, Mr Van Holst Pellekaan, was again quoted in the same article in InDaily saying he had confidence in the integrity of the environmental impact process, and the quote from the minister was:

We have set the strictest conditions proposed anywhere in the world before this pilot project could proceed to the next phase.

That is almost word for word what the Queensland minister said. They are the same words that every minister uses when faced with a project like this. 'Nothing to worry about. We have the world's strictest environmental standards,' they say. Those standards may be strict but they are not enforced, they are not complied with, and the net result is what we see in Queensland, what we saw with Linc Energy, with that massive pollution and that massive prosecution. In fact, if I offer a few remarks from the judge who convicted Linc Energy in Queensland and, again, quoting from a Queensland government online report, they say:

His Honour described a range of inadequacies and failures on the part of Linc, Linc's knowledge of the damage being done and its attempts to hide that damage from the regulator. He also said that the offending was persistent and in clear breach of Linc's obligations under the Environment Protection Act 1994. The judge also described the offending as 'ecological vandalism undertaken for commercial reasons'.

Yet, every time a project like this comes up, and credible people urge the government to refuse the project, to look carefully at the consequences of the project, we are told, 'Don't worry, we have the best environmental standards in the world.'

I mentioned the compensation that we might end up having to pay. As I was looking at some of the Stock Exchange documents that Linc Energy has made available, I noticed that there is a peculiar provision in the corporations law which enables companies to simply walk away from assets that they think might be a little bit troublesome.

I have an ASIC 'Notice of disclaimer of onerous property', which is a rather Orwellian sounding title, but basically what it means is, if a company owns property—that is not just land, it is also licences, permits and approvals and things that should be of some value—where they reasonably expect that costs, charges and expenses that would be incurred in realising the property would exceed the proceeds of realising the property, then they can just unload it and walk away.

I think this parliament needs to learn from the Queensland experience. This bill is one way that we can show that we are in fact smart in South Australia, that we are not prepared to go down the same ignorant path that other jurisdictions have gone down and we are prepared to learn from others' mistakes. The devious and cavalier actions of Linc Energy in Queensland are a timely reminder of what is potentially at stake in South Australia.

With those words, for probably the fifth, sixth or tenth time in this parliament, I put the issue of underground coal gasification back on the agenda, and I urge all honourable members to closely look at this bill and give it their full support.

Debate adjourned on motion of Hon. I.K. Hunter.

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