APIA: Govt Must Face Up to Gas Policy Challenges

Australia’s gas transmission industry has called for sensible and forward-thinking policies so that the nation can make the most of its substantial gas reserves.

The Australian Pipeline Industry Association (APIA) – which represents all companies involved in national gas transportation – is urging greater certainty for the long-term future for the Australian gas industry, for both the domestic and export markets and has on Friday released a new report, Securing Australia’s Gas Future, which is supported by ACIL Allen research, to aid that policy development.

“It is expected that we will face supply challenges in the next couple of years, but that is no reason to ignore the benefits of natural gas and develop policies for the longer term,” APIA’s Chief Executive, Ms Cheryl Cartwright, said.

“Much has been written about the domestic supply squeeze when the plethora of Australian sourced CSG-LNG contracts comes on line in the next two years, but adjusting domestic market structures will not address any supply shortfall,” Ms Cartwright said. “The only answer is to access broader supply from as many sources as possible, as soon as possible.”

In the longer term, it will be important for the nation to ensure Australia’s domestic gas industry – that is, manufacturers, power generators and households that use natural gas – can make the most of this abundant, critical resource.

“In order to reduce greenhouse gas emissions economically, natural gas should be encouraged. Gas creates less than half the CO₂ emissions of coal-fired power generation,” Ms Cartwright said. “An indication by government of commitment to natural gas will help to provide the right investment environment for further gas development.”

APIA has proposed two longer-term policies that would help to secure the future of the Australian gas industry, providing an economic and environmental benefit to the nation.

The first would see establishment of a technology-neutral energy investment policy, allowing renewables, clean coal, gas and any low-emission technologies to compete for investment funds. This would not be in the form of grants; rather a form of co-investment on the basis of competitive bidding. The second would be a technology-neutral, electricity sector emissions intensity-based carbon reduction scheme.

“Rather than trying to pick winners – currently the renewable energy industry – this policy would let all technologies, including gas, compete for funding on the basis of economic reduction of emissions,” Ms Cartwright said.

“Such policies would provide appropriate signals to investors in the supply and generation sectors that there is a future for natural gas in Australia. With such long lead times required for this investment, announcements now would help to secure our environmental and energy security future.

“Australia has an abundant supply of natural gas. It is time for policymakers to set in place a system that will ensure that the nation benefits from exports and domestic use of natural gas.”

[mappress]

LNG World News Staff, July 5, 2013; Image: Woodside