THE Federal Government's draft legislation for a world-first regulated carbon capture and storage (CCS) system has failed to pass muster with the very groups it is meant to help, including backers of the $5 billion Monash Energy coal-to-liquids project in the Latrobe Valley. Complaints with the draft legislation raise doubts about the Government's plan to make CCS integral to Australia's move to an emissions trading system under a policy paper to be released today by Climate Change Minister Penny Wong. Those complaining fear that the system proposed is too favourable to the petroleum industry, which has competing interests in the use and management of the underground reservoirs into which CCS proponents plan to pump greenhouse gases. In a submission to a Federal Government inquiry into the Greenhouse Gas Storage Bill, Monash recommended substantial changes to the proposed legislation as it did not provide a "level playing field in terms of the legal certainty and property rights needed to underpin CCS investment". ''It is more analogous to a playing field which is not only tilted, but littered with pits in to which one can fall and never emerge,'' Monash claimed. Monash is jointly owned by South Africa's Anglo American and the oil giant Shell. It has been eyeing the Bass Strait reservoirs as potential CCS sites. It got support from the State Government yesterday - the first day of public hearings by a house standing committee inquiry into the proposed bill. Victoria's Energy and Resources Minister, Peter Batchelor, said the proposed bill was a good start but that it needed to "get the balance right". He said CCS proponents needed to be offered similar security over acreage titles to those awarded to petroleum acreage title holders. ''Ensuring the right legal framework is developed around CCS is critical to the long-term development of CCS technologies in Australia,'' Mr Batchelor said. The petroleum industry has a different view of the draft bill. Operator of the Bass Strait oil and gas fields, ExxonMobil, Australia, appeared before the committee yesterday. Its chairman, Mark Nolan, said the proposed bill ''establishes a framework that is suitable for adoption on a national basis''. ''Any regulatory framework should recognise that the injection of CO2 into or near operational oil and gas facilities not designed for exposure to CO2 presents potentially significant safety and operational risk and integrity issues to personnel, production and infrastructure,'' he said. ''It is our view that the bill recognises these concerns and provides mechanisms to avoid significant impact on pre-existing petroleum operations,'' Mr Nolan said. He added that there may be depleted reservoirs available for CCS in Bass Strait after 2025.