Energy White Paper rejects calls for gas reservation

Federal Industry Minister Ian Macfarlane.

Federal Industry Minister Ian Macfarlane.

The Australian oil and gas industry has welcomed the release of the Federal Government’s Energy White Paper, which recognises the unnecessary policy barriers to developing gas supplies.

The paper, which serves as a blueprint for the Federal Government’s energy policy, rejects interventionist approaches to developing the nation’s energy supply through a gas reservation policy and recognises the need for a market-based response to gas demand.

Releasing the Energy White Paper, Federal Industry Minister Ian Macfarlane said the paper will deliver stable energy policy and efficient transparent markets that give consumers information to make choices about their energy use and industry the confidence to invest.

“We will be taking an integrated approach to address challenges arising in the gas market as a result of our domestic markets linking in with international markets,” Mr Macfarlane said.

“This includes removing unnecessary barriers to increasing supply, ensuring adequate competition and transparency in the upstream gas market and encouraging more flexible trading arrangements through trading hubs.”

Australian Pipelines and Gas Association (APGA) Chief Executive Cheryl Cartwright said that if there’s a shortage in a market, or if the price is high, the market should respond.

Current higher prices and intensive demand should encourage an increase in supply, so we welcome a review of competition in the wholesale gas market.

“Current higher prices and intensive demand should encourage an increase in supply, so we welcome a review of competition in the wholesale gas market,” Ms Cartwright said.

“While we are very enthusiastic about the positive impact on the economy of increasing gas exports, the local gas market should not be overlooked. We therefore welcome and encourage any policies that will bring more gas into the national gas market.”

APPEA Acting Chief Executive Paul Fennelly added that a long term policy position rejecting gas reservation is an important signal to investors.

“Policies that enhance Australia’s attractiveness as a place to do business and encourage industry to increase domestic gas supplies can deliver another wave of prosperity in addition to the current $A180 billion pipeline of investment in LNG export projects,” Mr Fennelly said.

The White Paper also builds on existing initiatives, such as the Industry Growth Centres focusing on areas of competitive strength, including the oil, gas and energy resources sector and the mining equipment, technology and services sector.

Enter your details to subscribe to the free fortnightly Gas Today e-newsletter

Thank you for signing up for the Gas Today Online Update.