APPEA: Energy White Paper Represents an Opportunity for Reliable and Cleaner Energy

The Australian Petroleum Production & Exploration Association (APPEA), the peak body representing Australia’s oil and gas industry, welcomes the recognition of the central role that gas will play in Australia’s energy future.

This document acknowledges:

– That developing Australia’s gas resources is one of the four priority areas to strengthen Australia’s ability to fully realise its future energy potential;

– The need to avoid becoming complacent about Australia’s attractiveness and competitiveness as an international investment destination; and

– The need to encourage foreign and local investment in the most commercially reliable and least-cost technologies, and the maintenance of an exploration pipeline for new energy resource discoveries.

In light of that, several draft White Paper proposals specific to the upstream oil and gas industry require close consideration, said APPEA Chief Executive, David Byers.

– The implication that retention leases may be used to “warehouse” reserves indefinitely. Retention leases remain integral to Australia’s longstanding and effective acreage management framework. The retention lease regime provides greater certainty for companies investing in large long-term gas projects. APPEA supports continuation of the existing commerciality test, but maintains that development of resources should occur only when it is commercially viable to do so.

– The suggestion that the potential for projects to supply the domestic market would be relevant when considering whether to grant production licences.

– Consideration of moving to a cash-bidding basis for acreage release. Such a regime would divert funds from exploration to cash-bidding auctions (reducing exploration activity), detract from open competition for acreage and amount to a further source of revenue capture from an industry that already contributes substantially to government revenue.

– APPEA supports a science-based approach to matters regarding the coal seam gas industry’s expansion and a more harmonised approach to regulation, but is concerned at the risk of duplicating and elongating state and federal assessment and approvals processes. The CSG industry is making some of Australia’s largest-ever investments to establish projects that will last several decades. To continue to attract such investment, Australian jurisdictions will require regulation that is sensible, efficient, and clear in areas such as production, environmental management, land access and multiple land-use.

“The Energy White Paper consultative phase is an opportunity for industry and Government to work together to develop a national energy framework to deliver competitive, secure, reliable and cleaner energy,” Mr Byers said.

“APPEA looks forward to further discussing each of these important issues with the Government.

“It is important to get energy policy right. Australia’s perceived benefits to investors can be quickly eroded through complex regulatory approvals, high construction and labour costs, frequent changes to the fiscal regime and the imposition of a price on carbon that is not faced by competitor nations.”

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LNG World News Staff, December 13, 2011; Image: APPEA