Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2022-2023
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE AMENDMENT
(DOMESTIC RESERVE) BILL 2023
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator Hanson)
OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE
(DOMESTIC RESERVE) BILL 2023
OUTLINE
The purpose of this Bill is to ensure Australians have enough natural gas and other
hydrocarbons by imposing a new obligation on gas and petroleum companies operating in
Commonwealth waters.
If the Bill passed into law petroleum production licensees would be given 12 months to enter
into a domestic reserve agreement with the Commonwealth for 15% of their exports and
satisfy the condition of their licence.
The Commonwealth would then have the right to pass on their rights to the reserve to a State
or Territory of Australia.
The Bill proposes a domestic reserve agreement for a minimum of 10 years with a subsequent
obligation to enter into further agreements while the licence is in force.
Regulations would set out the further requirements.
NOTES ON CLAUSES
Clause 1: Short Title
1. Clause 1 is a formal provision specifying the short title of the Act as the Offshore
Petroleum and Greenhouse Gas Storage Amendment (Domestic Reserve) Act 2023.
Clause 2: Commencement
2. The Bill would commence on the day after it receives the Royal Assent.
Clause 3 - Schedules
3. Clause 3 provides that each Act specified in Schedule 1 is amended or repealed as is
set out in the applicable items in the Schedule. Any other item in Schedule 1 has effect
according to its terms.
Schedule 1--Amendments
Offshore Petroleum and Greenhouse Gas Storage Act 2006
Item 1 - Section 95 (after the paragraph beginning "A petroleum production licence")
4. Item 1 amends the simplified outline in Chapter 2 of the Offshore Petroleum and
Greenhouse Gas Storage Act ('the Act') to include references to the condition that petroleum
production licensees must enter into a domestic reserve agreement with the Commonwealth.
Item 2 - Section 159
5. Item 2 amends the simplified outline to Part 2.4 of the Act relating to Petroleum
Production Licences to include reference to the condition that petroleum licensees must enter
into a domestic reserve agreement with the Commonwealth.
Item 3 - Section 162 (at the end of the heading)
6. Item 3 adds 'general' to the heading of Part 2.4 of the Act.
Item 4 - After section 162
7. Item 4 inserts new section 162A into the Act.
8. Subsection 162A(1) provides that licensees will have 12 months from either the day
on which the licence is granted (if it is granted on or after 1 January 2024) or 12 months from
the day the Act commences (for licences granted before 1 January 2024) to enter into a
domestic reserve agreement with the Commonwealth.
9. Subsection 162A(2) provides that for each year the agreement or contract operates,
the licensee reserves an amount of petroleum equivalent to 15% of the quantity of petroleum
exported by the licensee in the previous year for the exclusive use of the Commonwealth.
10. Subsection 162A(3) provides that licensees must enter a contract with the
Commonwealth in the first instance, but the Commonwealth is able to pass on the rights to
exclusive use to a State or Territory for a specified period.
11. Subsection 162A(4) provides that each domestic reserve agreement or contract is long
term and must operate for a minimum of 10 years beginning on the day the agreement
commences. minimum of 10 years. At the end of the first contract licensees will be required
to enter a new agreement if the production license is still in force.
12. Subsection 162A(5) provides that, despite subsection 162(2), the condition in
subsection 162A(1) does not need to be specified in the licence.
13. Subsection 162A(6) provides that the regulations may prescribe any other matters
which may be necessary for carrying out or giving effect to section 162A.
Item 5 - Application of amendments
14. Item 5 provides that the amendments apply to a petroleum production licence granted
before, on or after the commencement of this item.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Offshore Petroleum and Greenhouse Gas Storage Amendment (Domestic Reserve) Bill
2023
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
The purpose of this Bill is to ensure Australians have enough natural gas and other
hydrocarbons by imposing a new obligation on gas and petroleum companies operating in
Commonwealth waters.
Human rights implications
This Bill does not engage any of the applicable rights or freedoms.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
Senator Hanson