The Australian Petroleum Production and Exploration Association (APPEA) said that the community wants to see action now and they want to see greenhouse gas emissions reductions occur at the lowest cost. APPEA’s chief Executive Belinda Robinson said that the Clean Energy Target will do neither of these things.

“In delivering base-load, low cost energy, all of the technologies covered by the Clean Energy Target are for the long term. In contrast Australia’s natural gas offers an immediate response as we move toward a much less greenhouse intensive future,” said Ms Robinson.

“This preoccupation with renewable energy, while important, is further distracting the debate from the main game and that is, least cost-emissions reduction and practical action, now. The Australian community is crying out for it.”

Modern natural gas-fired electricity generation technologies produce only 30 to 50 per cent of the greenhouse gas emissions produced by current coal technologies and use a fraction of the water.

Ms Robinson said “If we are to make a transition that avoids economic upheaval, substantial job losses and a leap in electricity prices we cannot continue to ignore the solution that continues to sit right under our noses, Australia’s natural gas.”

The Australian Pipeline Industry Association’s (APIA) Chief Executive Cheryl Cartwright has called for greater certainty and clarity in the development of a nationwide emissions trading scheme, saying, “Without certainty, it is Australia’s consumers who will be disadvantaged.

“While the nation’s gas transmission sector welcomes the plan for an overarching system, the details must be announced sooner rather than later,” Ms Cartwright said.

“The longer it takes to establish a definitive scheme, the longer will be the delays in investment in the necessary infrastructure,” she said.

Ms Cartwright said it was also important to look beyond renewable technologies and ensure that natural gas was not disadvantaged in any new programs.

“Major energy producers are already moving towards gas-fired power generation, with a view to cutting greenhouse gas emissions, and having a single national scheme to promote clean energy would be an improvement on the current situation of a range of state schemes,” she said.

“Gas used to produce electricity in a co-generation facility creates about half the greenhouse gas emissions of an equivalent coal-fired power station.

“Natural gas will be part of Australia’s energy generation future as it has lower greenhouse gas emissions and uses less water in energy generation than does coal, it is less expensive than renewable energy and the technology is available now.”

Ms Cartwright said a clear and consistent nationwide emissions trading scheme would allow industry to focus on providing the most efficient outcomes for consumers and the economy, and would provide the certainty needed for long-term investment decisions.

Both APPEA and APIA have previously agreed that Australia’s move towards a national carbon emissions trading scheme could herald the start of something big for Australia’s natural gas industry, with billions of dollars worth of gas projects set to be able to emerge from the wings.

APPEA said that the benefits to Australia from the use of gas as a lower greenhouse gas-emitting energy source are considerable. The upstream oil and gas industry believes that, with the right policy settings, by 2017:

- 70 per cent of all new electricity generation capacity installed in Australia will be gas fired; - exports of LNG will almost quadruple to 50 million tonnes per year (Mtpa), up from 13.9 Mtpa currently; and, - gas used in resources processing will double.

In early July, major energy players Origin Energy and AGL Energy both made moves that will underpin further growth in their gas-fired power generation interests, with a view to cutting greenhouse gas emissions.

Origin Energy has entered into a Gas Supply Agreement with Rio Tinto Aluminium, which will see 470 PJ of coal seam gas delivered to Rio Tinto’s Yarwun alumina refinery at Gladstone, commencing between March and July 2010.

Origin Energy Chief Operating Officer Karen Moses said Origin will spend an estimated $260 million to further develop its Walloon coal seam gas fields to supply this contract.

Ms Moses said Rio Tinto Aluminium’s decision to enter into a long term gas contract was welcome news for the environment.

“Gas used to produce electricity in a co-generation facility creates about half the greenhouse gas emissions of an equivalent coal-fired power station, delivering a more environmentally sustainable fuel source for the expansion of the Yarwun refinery. This project shows how Origin, working together with our business partners, can make a difference,” she said.

Meanwhile, AGL has strengthened its low emission developments after formally taking ownership of the 1,280 MW gas-fired Torrens Island Power Station (TIPS) in South Australia from TRUenergy.

AGL Managing Director Paul Anthony, said that TIPS provides approximately 25 per cent of South Australia’s electricity requirements.

“TIPS is a substantial investment by AGL in South Australia and significantly bolsters AGL’s physical position in low carbon emission electricity generation,” Mr Anthony said.

TRUenergy is also making efforts to reduce the impact of climate change, announcing that it will commit to a comprehensive strategy to reduce its carbon emissions by 60 per cent by 2050. Part of this strategy will include investment in gas-fired power generation.

Managing Director Richard McIndoe acknowledged that TRUenergy faces a more difficult challenge than most to reduce its greenhouse emissions. TRUenergy, owner and operator of the Yallourn brown coal-fired power station, is currently one of Australia’s largest producers of greenhouse gas emissions.

TRUenergy is therefore likely to increase its share of renewable energy and direct investment towards low-emission technologies, such as the 400MW combined cycle gas-fired turbine, which will power its new generation facility at Tallawarra in New South Wales.

A scheme reported by the Prime Minister’s emissions trading task group, released in early June, said that Australia’s natural resource endowments are likely to continue to play an important role in the country’s prosperity into the future.

“Australia possesses large reserves of energy resources, including abundant and inexpensive supplies of coal and extensive gas and uranium reserves. Given this economic structure and resource endowment, Australia will be adversely affected by any action to restrain emissions, whether domestic or international,” says the report.

“However, Australia will also bear increasing economic costs from the impacts of climate change and measures to adapt to climate change if global emissions are not constrained.”

The emissions trading report highlighted the potential of Australia’s interests in developments – such as liquefied natural gas (LNG) – which “have the potential to make a major contribution to global efforts to reduce greenhouse gas emissions if they are used to power electricity generation instead of coal.

“For example, if Australia’s LNG exports were used to replace an importing country’s domestic coal-based electricity generation, they could reduce global emissions by around 94 Mt by 2010,” says the report.