He told Parliament yesterday the amendments would enable industry to pursue a key component of the CO2 capture and geological storage process.

This would allow the gas to be safely stored for thousands of years, with the potential to substantially reduce Australia's greenhouse gas emissions.

"Companies are keen to identify suitable storage sites to match their parallel development of carbon dioxide capture from coal or gas-powered electricity generation and from other industrial and extractive processes," the AAP quoted Ferguson as saying.

The bill focuses on access and property rights for greenhouse-gas injection and storage in Australian waters, and provides a management system to ensure safe storage.

Ferguson said the Government would also balance the needs of the new storage industry with the rights of the petroleum industry when both were operating in the same area, a possible complication that is likely as the geological formations providing oil and gas are often the same as those suitable for storage.

The impact on other uses such as fishing, shipping, defence and telecommunications, as well as indigenous rights and environment protection would also be taken into account.

He added that exploration for CCS sites would be allowed and that if the Government was satisfied that a site was safe, gas could be stored there at an agreed rate and total volume.

Initially, storage would be limited to CO2, although this could be extended in the future.

Ferguson also said the Government was closely watching international developments in CCS. It would also wait for a report by a parliamentary committee before completing the process.

"Large-scale projects for capturing and concentrating greenhouse gases involve investments of many hundreds of millions, or billions, of dollars,'' he said.

"Several large-scale projects have already been considering their requirements for geological storage for some years... the proponents are eager to gain access to areas so that they can commence detailed assessment of storage formations.

"This bill provides that access and will play a key role in accelerating the development of the carbon capture and geological storage industry.

"In so doing, it provides a significant opportunity to tackle climate change in a way that protects Australian jobs and maintains our economic prosperity."

Debate on the Offshore Petroleum Amendment (Greenhouse Gas Storage) Bill 2008 and three related bills dealing with fees and safety levies was adjourned.