Where do you see the gas industry going in the short term and the longer term?
In the short term, the industry will be focused on successfully delivering the many projects under construction, ensuring natural gas will play a key role in meeting the energy supply needs of Australia and the Asia-Pacific region in a cost-effective way.
In the longer term, the industry will continue to focus on building co-operative relationships with the communities in which it operates, and securing the right policy and regulatory frameworks to ensure resource development occurs in an efficient and effective manner.
Over the next decade, oil and gas is set to be the dominant force in the Australian resources sector. Of the $500 billion planned/approved total resources investment, almost two thirds is projected to be in oil and gas. While the last ten years was mainly coal and iron ore, the next ten years will be about oil and gas.
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What are the most important steps the gas industry needs to take to survive in a carbon-constrained economy?
Competing energy sources are assessed on availability, reliability, affordability and performance. Gas is set to thrive competitively as a cleaner- burning fuel source that is available, reliable, affordable and performs well – in its versatility and energy efficiency. Reputable analyses of the global energy outlook project natural gas to be the fastest-growing major fuel source to 2040, with demand rising by more than 60 per cent and gas replacing coal as the number two fuel source (behind oil).
Electricity generated from natural gas is produced with 50–70 per cent fewer emissions than conventional coal, so the industry has a strong future in Australia. The key steps include ensuring that the policy framework encourages least cost abatement and supports the development of the domestic industry.
From an export perspective, a significant focus of the industry will be to ensure that the policy framework recognises that Australia’s LNG industry is the only one exporting into the Asia-Pacific region that is imposing a carbon constraint. While LNG is recognised as a ’trade-exposed industry’ under Australia’s carbon pricing mechanism, the scheme does not adequately reflect the need to secure the international competitiveness of the industry.
How has the industry changed since you first became involved?
In two areas: firstly, there has been exponential growth in the number of players, size and economic significance of the industry (from one LNG project and two major oil/gas producing regions in Bass Strait and the Cooper Basin, to seven LNG projects under construction and many oil/gas regions and prospects).
Secondly, there has been a quantum leap in the prominence, visibility and complexity of communication about the industry and its activities. There has been a step-change in the need for industry participants to actively engage with governments, third parties and communities in order to successfully develop oil and gas resources.
What role should the government take in the development of the gas sector, and in the energy industry more generally?
Australia’s national, state and territory governments have a clear role to establish a regulatory and commercial framework that promotes investment and maximises the return to the Australian industry and community from developing the nation’s oil and gas resources. APPEA will advocate in favour of a regulatory regime that enables member companies to operate safely, sustainably and profitably.
From a Federal Government perspective, the draft Energy White Paper launched in December 2011 will be crucial, and APPEA will be working with the Government to ensure the White Paper puts in place the framework to support the industry’s growth.
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