GEA: budget fails in support of LNG as transport fuel

The Federal Budget has missed the opportunity to support the development of an LNG highway, despite an outstanding election commitment to do so, Gas Energy Australia said.

LNG transport was one of the planks in the Federal Government’s Policy for Resources and Energy, released in September 2013.

The document states that the coalition, “will work with industry to facilitate the development of logistics systems for LNG as a transport fuel, particularly in the Brisbane, Sydney and Melbourne transport corridors”.

The document recognises that, “…the emergence of localised LNG production plants to service the growing uptake of LNG as an alternative to diesel for interstate haulage vehicles provides a real opportunity to both reduce greenhouse gas emissions and offer financial benefits to users.”

Gas Energy Australia’s CEO Mike Carmody said industry is endeavouring to uphold its end of the bargain by investing in LNG, such as BOC’s $200 million LNG micro plant near Chinchilla in Queensland and AGL’s LNG plant near Newcastle in New South Wales, but the Federal Government is yet to come to the party.

“As we head to the back end of the Government’s first term, it’s disappointing that the opportunity to support increased uptake of this cleaner, cheaper, Australian fuel has been missed in this year’s budget,” Carmody said.

He adds that changes to excise policy have hurt the emerging LNG fuel industry and made the Government’s commitment harder to meet.

“Despite promises from both sides of politics that these fuels would not be excised at more than 50% of the diesel energy equivalent, reiterated in the recently released Energy White Paper, natural gas fuels are now taxed at over 70% of the diesel equivalent and rising,” adds Carmody.

Natural gas fuel is around 25 to 30 percent less expensive than diesel, and trucks running on LNG produce up to 23 percent less greenhouse gas emissions than diesel-powered trucks. It’s also non-toxic and doesn’t produce harmful cancer-causing particulate pollution, according to the statement.

Natural gas is also an abundant Australian fuel. Using more of it domestically would help to reduce Australia’s dependence on more expensive, more polluting foreign fuel and that’s also good for the country’s  balance of payments.

Carmody added that the GEA will work with the Government to meet the commitment in the next budget.

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Image: GEA