Northern Territory Second Reading Speeches

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GEOTHERMAL ENERGY BILL 2008

Madam Speaker, I move that the bill be now read a second time.

The purpose of the Geothermal Energy Bill is to create an enabling framework to facilitate and regulate the exploration and extraction of geothermal energy resources in the Northern Territory. This framework for this bill is based on existing models established by the
Northern Territory Petroleum Act, Mining Act, and Mining Management Act. Parts have also been utilised from the Victorian Geothermal Act. This model was adopted because operations associated with exploring and extracting geothermal energy, primarily drilling deep within the earth, are similar to petroleum and mining operations. Moreover, it provides a model with which the industry is familiar.

This bill has been developed following extensive public and industry consultation. My department produced a discussion paper which attracted considerable comment and was instrumental in setting the scene for the development of this legislation.


The decision to develop separate, stand alone geothermal legislation was made so that geothermal energy resources would be recognised as a separate and new energy source, and could compete in its own statutory field with other natural resources, such as natural gas, coal, and a range of other potential energy sources, such as solar, wind and biofuels.


Geothermal energy is heat energy, derived from deep within the earth. This heat is stored in either subterranean water bodies, or in various geological layers that make up the earth. Geothermal energy is a valuable earth resource. Geothermal energy resources have the potential to provide clean, reliable, and renewable energy, capable of a wide range of uses. It has the potential to deliver energy with very low or no greenhouse gas emissions. This natural heat energy can be harnessed and used in a wide range of applications including industrial and community heating. However, its main value in Australia is in generation of electricity, where it has the capacity to provide base load power equivalent to gas and coal fired power stations.


The technology associated with exploration for and the development of geothermal resources is developing rapidly. Rising energy prices and greater government and market support for low emission energy has led to interest in geothermal energy rising across Australia and worldwide. New exploration techniques required to search for deep hot rocks are being led by Australian companies and research institutions.


Today, I am introducing legislation to ensure the Territory is positioned to attract and support commercial scale exploration and development of its geothermal energy resources. Without such legislation, the Territory will not attract investment dollars to find these new and exciting energy resources. Interest by industry to invest in geothermal resources is clearly demonstrated by the rush to take up prospective tenure originally in South Australia, but now in Victoria, Tasmania, and Western Australia, where their attraction of major electricity markets justifies the high risk and exploration costs.


This bill is a clear example of the Northern Territory government’s commitment to the sustainable resource development of the Territory. It enables: investment in a new emerging energy industry; use of a clean, renewable and reliable energy resource which has a small eco-footprint; and potential for the development of energy intensive industries, particularly in regional Northern Territory.


The bill establishes that, like other earth resources, the heat energy within the earth belongs to all Territorians, and is therefore vested in the Crown. The bill also establishes property rights over geothermal energy and resources within particular areas. This allows the Territory Government to grant a party exclusive rights to geothermal resources in a specific area for exploration and potential development.


Secure title is needed by companies to enable them to raise finances for exploration and subsequent extraction and to benefit from any geothermal resource they may find. Furthermore, as geothermal resources develop in value, the deal provides opportunities for the Territory government to set a royalty on such resources to return some of their value to the state.


The bill provides for the grant of three different titles: a geothermal exploration permit to conduct exploration for heat sources; a geothermal retention licence where resources have been discovered, but cannot yet be commercially extracted; and a geothermal production lease on which to develop commercial resources that may be viable.


The bill provides some flexibility as to the duration, size and conditions associated with permits and licences. It sets size limits to the titles which can be varied with ministerial agreement when it is in the interest of the Territory. These measures are designed to ensure that work is conducted on the titles and will encourage a higher turnover of land and impede uncompetitive tenure warehousing.


The bill has provisions for grant of title: by tender for reserved areas, through work programs, where the Territory government wishes to ensure that companies with proven capacity have access to key strategic geothermal regions and to harness competitive forces to optimise investment; and by application ‘over the counter’ from interested parties for rights to explore for geothermal resources in any non-reserved areas.


These two key granting mechanisms will maximise the potential return to the Territory from exploration and extraction of geothermal energy, and will provide opportunity for innovative geothermal explorers to access land of their choice to develop energy intensive industries.


The bill is primarily intended to facilitate large scale commercial exploration and extraction of geothermal energy. It is anticipated that the commercial geothermal activities regulated under the bill will typically access geothermal resources three to five kilometres below the earth’s surface and not compete with other resources such as petroleum and minerals, which would not be adversely affected, although cooperation between the various interest holders will be encouraged as mixed land use with multiple tenure will be allowed.
The bill provides for a range of other styles of mechanisms to make geothermal permits, leases, and licences workable. For example: ‘unit development’ which ensures cooperation between titleholders where a geothermal resource is discovered that crosses title areas; power to the minister to vary title conditions, and to allow transfer, surrender or cancellation of geothermal titles; and sharing of information resulting from exploration and extraction of geothermal resources.


In establishing geothermal activities, the bill makes provision for notification of all land holders to ensure full consultation with both public and private landowners, as the case may be. Consideration of their interests may, where necessary, lead to payment of compensation to landowners. Geothermal activity will be subject to environmental assessment under Northern Territory environmental legislation and rigorous assessment by the responsible minister.


Furthermore, the bill provides for strict controls of geothermal activity in parks and reserves and areas of high conservation values; consent of the relevant minister to access restricted Crown land; consent of the private landowner and compensation agreement of geothermal activities on private land; and recognition of Aboriginal freehold land pursuant to the terms of the
Aboriginal Land Rights (Northern Territory) Act.

While geothermal activities are expected to pose limited risks and have a relatively small ecological footprint, it is vital that they are conducted responsibly and the rehabilitation of any impact upon the natural landscape occurs. The bill therefore provides a range of measures to ensure geothermal activities are carried out in line with agreed operational plans, the geothermal title holders have supplied rehabilitation points so the Territory government can rehabilitate sites where necessary, and the bill also provides for a range of offences, penalties and enforcement provisions to ensure that geothermal property rights are protected, and that geothermal activities meet community expectation for health, safety and environment protection. These provisions are modelled closely on the
Petroleum Act, the Mine Management Act and the new Work Health legislation which have worked effectively to meet the needs of all stakeholders.

Geothermal technologies either extract heat from natural groundwater or from water circulated through hot dry rocks deep within the earth. This will mean that many geothermal operators will, in effect, require two rights – the right to the heat energy and the right to water. Geothermal industries, along with other users, must compete for access to water in the marketplace and protect the quality of any water discharged including underground. These requirements are recognised in this legislation.


It is early days for the geothermal industry across Australia. As our understanding of the Territory’s geothermal resources and associated technologies grows, this legislation may evolve. However, in introducing this bill the Northern Territory government is seeking to establish a forward looking framework to encourage substantial new exploration and in due course development of this community-owned resource. This bill seeks to ensure all aspects of the geothermal resource development will be conducted sustainably and in an open, transparent and consultative way which meets the community’s expectations.


I table this bill in the knowledge that this is a new industry that we are setting up in the Territory. I encourage the geothermal industry, other interested people affected by the legislation and the public to examine this bill and to provide comments to my department on any issue that they may consider require amendment. The Territory government is prepared to consider all such submissions and perhaps make committee stage amendments prior to passage of this bill.


I see this bill as a first step towards a future where geothermal energy businesses contribute substantially to the Territory’s use of renewable energy and to ecological and socially sustainable development, particularly of our rural and regional communities.


Madam Speaker, I commend this bill to honourable members and table the explanatory statement to accompany this bill.


Debate adjourned.

 


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