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PERTH (miningweekly.com) – The Australian Petroleum Production & Exploration Association (Appea) has welcomed recommendations from a federal government report that policy issues needed to be addressed if Australia’s East Coast was to transition from being solely a domestic gas market to one that is export linked.
The 'Eastern Australian Domestic Gas Market Study', identified six areas of reform that would need to be considered by the government to address gas supply constraints and to facilitate a well functioning and transparent market.
These six areas include gas market reform, supply competition, the availability and transparency of data, infrastructure, non-market interventions and governance.
The report advised that the government should focus on removing unnecessary impediments to developing new gas resources, particularly during a period of tightness in gas supply, and should provide a certain and predictable regulatory and investment environment.
The report further noted that policy regulating the gas industry should seek to ensure that the operation and regulation of the market facilitated a smooth transition towards export, and provided the best opportunity possible for all market participants to adjust.
In this way, the overall economy would reap the maximum benefits of the liquefied natural gas developments, while providing an efficient domestic gas market.
Appea applauded the report for highlighting that the continuation of the market’s capacity to deliver depended on industry’s ability to continue to explore for and develop Australia’s vast gas resources, adding that it was not a lack of natural gas, but rather onerous regulatory restrictions in some jurisdictions that was impeding gas supply.
“The study follows a long line of previous reviews and reports, including the comprehensive Australian government 2012 Energy White Paper that show Australia has more than enough gas to supply both domestic and export markets for decades to come,” said Appea chief executive David Byers.
“It highlights the duplicative and multiple layers of red and green tape that projects must navigate to unlock the economic benefits from our nation’s resources.”
Byers pointed out that Australia needed more gas production, not more regulation.
He added that the study also put to rest any calls for interventions, such as protectionist domestic gas reservation policies, national interest tests or similar policies, and highlighted the inefficient nature of such interventions.
“In relation to the recommendation for an industry-led initiative to provide more ‘information’ to the market, Appea notes the gas market already has abundant information available to it. The range of gas supply agreements that have been struck over the last 12 months suggests that there is enough information available to allow supply contracts to be concluded between willing buyers and sellers,” Byers said.
However, he noted that Appea would carefully consider this recommendation and would further discuss with the government how this might work in practice.
However, the industry body cautioned against recommendations that would add further to the profusion of reviews to which the gas market had been subject in recent years.
“In particular, recommendations for a further review of the competitive nature of the gas market are unnecessary and will lead to further market uncertainty.
“Appea calls on all parties to recognise the benefits associated with removing impediments to further gas supply, rejecting protectionist and unnecessary interventions, and acknowledging the need for an efficient regulatory regime in all Australian jurisdictions,” Byers said.
“A freely operating and competitive market is the best way to allow gas resources to be developed for the benefit of the owners of that resource – the Australian people.”