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Legislative Council - Fifty-Fifth Parliament, First Session (55-1)
2022-11-17 Daily Xml
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Bills

Statutes Amendment (National Energy Laws) (Gas Pipelines) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 20 October 2022.)

The Hon. H.M. GIROLAMO (16:05): I indicate that I will be the lead speaker in the upper house for the Liberal Party and indicate our support for this bill. The Statutes Amendment (National Energy Laws) (Gas Pipelines) Bill aims to improve competition and transparency in the use of gas infrastructure, particularly in allowing third parties to access a gas pipeline. This reform package is estimated to save some $1 billion over 20 years. It is important to note that the majority of the consultation done on this suite of reforms was undertaken through the previous term of the former Liberal government and former Minister for Energy and Mining, the Hon. Dan van Holst Pellekaan MP.

These reforms are intended to provide for the implementation of a simpler regulatory framework that will continue to support the safe, reliable and efficient use of and investment in gas pipelines, while also imposing a more efficient constraint on exercises of market power by pipeline service providers, facilitating better access to pipelines that would not otherwise provide such access, providing greater support for commercial negotiations between shippers and service providers and streamlining the governance process.

These reforms will serve to constrain exercises of market power by pipeline service providers where there is a natural monopoly in the market as well as supporting shippers, which are companies that buy and sell gas and arrange for the transportation of gas through networks owned by gas transporters, in negotiations with pipeline service providers. This bill also aims to minimise the costs and risks of regulation where there is no third-party user and expands the scope of economic regulation by requiring all transmission and distribution pipeline service providers to provide third-party access, if such access is sought.

To allow third-party access to all pipelines, this bill removes the existing coverage framework. Pipelines can be classified as scheme pipelines, subject to the stronger form of regulation based on the existing full regulation categories. The current regulator will use the existing regulation test to determine if a pipeline is scheme or non-scheme. If a pipeline does not provide the requisite information, it will automatically be classified as scheme, the stronger set of regulations.

There is also provision for a greenfield incentive determination, which is available prior to the commissioning of the pipeline if the regulator is satisfied that the regulation will constrain the exercise of market power. The greenfield incentive determination will provide the pipeline with an exemption to the scheme level regulation for 15 years. The regulator will also be required to actively monitor the behaviour of the service providers in compliance with their obligations under the NGL and NGR and will be able to initiate its own assessment of the form of regulation that should apply to a pipeline.

As I said, this reform package is estimated to save some $1 billion over 20 years. It is hoped that those savings will be passed on to consumers through lower power prices at this important time. I commend the bill to the chamber.

The Hon. R.A. SIMMS (16:09): I am speaking today on behalf of the Greens on the Statutes Amendment (Natural Energy Laws) (Gas Pipelines) Bill. The bill before us will simplify the regulatory framework for gas pipelines, increase market competition and improve transparency. The Greens' position on gas will be very clear to everybody in this place. We are in a climate emergency and we know that is caused by burning fossil fuels and we need to phase out the use of natural gas.

At this year's COP 27, the UN Secretary-General, Antonio Guterres, provided a stark warning to the world, claiming that we are on a 'highway to climate hell'. Fossil fuels such as natural gas have been a major contributor to climate change. We need to urgently switch to renewable energies such as solar, wind and green hydrogen.

I want to recognise the Malinauskas government's significant investment in green hydrogen in this state—at least this is something that I understand they are planning to act on during this term. Of course, the Greens are supportive of moves towards clean, green renewable fuel, but in this transition to green hydrogen we need to ensure that the pipeline infrastructure is well regulated and transparent.

This bill refers to natural gas, which is something that is of concern to the Greens. Natural gas is a non-renewable fossil fuel comprised of matter that has decomposed over millions of years. The extraction and burning of natural gas is harmful to our environment and our health. In fact, the extraction of natural gas damages our farming land, water table and land stability. It is harmful to our health, and up to 12 per cent of childhood asthma is a result of cooking with so-called natural gas. To address the climate crisis and protect our environment and health, we must urgently put a stop to all new natural gas projects.

We have been advised that there has been agreement by the national energy ministers to bring a future bill to change the wording in legislation to expand the definition to include future fuels such as green hydrogen. While we are disappointed that such a definition has not been included by the government in this bill, we are supportive of that change and look forward to future legislation being introduced in that regard.

The bill before us today provides for a greenfields incentive determination, which will be available to service providers prior to the commissioning of new pipelines. The Greens do not support greenfields gas developments for natural gas, but we do acknowledge that there will need to be new infrastructure to supply and distribute green hydrogen.

The Greens are supporting this bill with the understanding that gas infrastructure is required to support the green hydrogen industry. We also anticipate the changes of wording to ensure that future green gas options are defined in the national energy law rather than simply referring to traditional gas, methane gas, one which we know locks us into serious damage to our environment and indeed our health. With that, I conclude my remarks.

The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (16:12): I would like to thank the opposition and the Greens for indicating their support for this bill. In making these concluding remarks, I am mindful that there has been a very long trail to get to this point. The bill has followed several inquiries over many years. There has been considerable industry consultation and a process to achieve agreement by energy ministers around the nation on this set of reforms.

I certainly think it is to South Australia's credit that we are the lead legislator in the energy sector. The state is proudly ahead of the pack in the transition from the old models to the new system, with more diversified energy sources and particularly renewables. South Australia has a long historical interest in the development of gas resources and is again at the forefront as it changes to being an essential transition fuel to partner with wind and solar and as an effective means of storing renewable energy. This bill will help the framework of making the sector as efficient and competitive as possible. I thank members for their support and I commend the bill to the council.

Bill read a second time.

Committee Stage

Bill taken through committee without amendment.

Third Reading

The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (16:15): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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