Aussie bill sets up CO2 sequestration framework

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Nov. 13 -- The petroleum industry has approved passage of Australia's Offshore Petroleum Amendment Bill, which establishes the world's first regulatory framework for carbon dioxide capture and storage (CCS).

Belinda Robinson, chief executive officer of the Australian Petroleum Production & Exploration Association (APPEA), says the legislation is important and places Australia at the forefront of legislation and regulation of CCS technology.

APPEA has fought hard to ensure that the property rights of existing petroleum title holders are protected while allowing or facilitating greenhouse gas storage, and the association believes the right formula has been secured.

Federal Energy Minister Martin Ferguson says the bill creates an environment that allows industry to invest in CCS with confidence and encourages commercialization of technology capable of reducing future global greenhouse emissions.

The bill ensures that long-term liability, to which companies previously were exposed, can be transferred back to the government following project closure. This creates much more certainty and is a departure from the previous government position, which stated that common law liabilities should lie where they fall.

The transfer of liability won't happen until at least 20 years after CO2 injection operations cease, but it is a significant change when considering a sequestration life of more than 1,000 years.

Ferguson also called on the Australian states and the Northern Territory to introduce consistent legislation for onshore and inshore waters storage to produce regulations common to all.

At the moment, companies have to be aware that different states and territories regimes are currently in operation. Thus there is a need to review the way various legislation regimes address potential conflicts among incumbent petroleum operators and carbon storage operators as well as third party access rights to storage formations.

The new offshore legislation establishes access and property rights in Australia for geosequestration and forms the key component of the government's response to climate change.

Geoscience Australia is assessing the development of new industries such as coal-to-liquids and the viability of numerous sites, primarily to allow Australia to continue the use of coal resources.

The government's CCS taskforce is to perform national mapping to match key industry hubs with prospective geological storage sites and infrastructure requirements for carbon dioxide. The aim is to produce a national map and infrastructure plan by June 2009.

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