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King calls for collaboration on govt initiatives

Image shows Australian coat of arms and flag

Photo by Bloomberg

16th May 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – The Australian government has urged the oil and gas sectors to partner with the government to scale up Australia’s net zero ambitions, while the government works to implement a range of recently announced reforms.

Speaking in Adelaide, Resources Minister Madeleine King told the Australian Petroleum Production & Exploration Association (Appea) 2023 conference that while the net zero transformation created opportunities for the resources sector, it equally presented challenges.

“The government has taken decisions in recent months to implement our agenda, including legislating landmark climate reforms that enable Australia to reach our net zero commitments.

“The Budget has also introduced reforms to the Petroleum Resources Rent Tax (PRRT) that will build confidence that the Australian people are getting a fair share of the return from the resources they own. Changes, detailed at last week’s Budget, to the PRRT, bring to a close a review of PRRT initiated under Scott Morrison when he was Treasurer,” King said.

Reforms to the PRRT were based on key recommendations made by the Treasury to achieve a fairer return from offshore liquefied natural gas (LNG) projects by introducing a cap on the use of deductions from July 1, 2023. Specifically, the change will limit the proportion of PRRT assessable income that can be offset by deductions to 90%.

This change will bring forward PRRT revenue from LNG projects, and will ensure a greater return to taxpayers from the offshore LNG industry, while limiting impacts on investment incentives and risks to future supply.

“The government is committed to pursuing an economic reform agenda that delivers for the Australian people, and I understand this has not been easy for the sector,” the Minister told delegates, thanking those who had worked constructively with the government on the suite of reforms that have been implemented, King said.

“I look forward to partnering with you in the months and years ahead as Australia begins to dramatically scale up our net zero ambitions. Reaching net zero will require smarter use of our resources to provide the building blocks needed for renewable technologies.

“It means ensuring we have an adequate and affordable supply of energy to meet our domestic, industry and export needs.

“And gas will play an important role. As the Prime Minister has said, ‘gas is, and will, continue to be, an essential part of our energy mix and is essential for the energy transition’,” King said.

She noted that Australia’s manufacturers currently rely on gas for 42% of their final energy use and they accounted for 26% of Australia’s total domestic gas consumption in 2020/21. Furthermore, gas is a feedstock for chemicals, including fertiliser produced for the agricultural sector and explosives for the mining sector.

King acknowledged the need for additional investment in the gas sector, pointing to comments made by the Australian Energy Market Operator and the Australian Competition and Consumer Commission that Australia’s future domestic gas needs will not be met through existing sources of supply.

The Minister said that with the passage of the Safeguard reforms, the Australian government was ensuring that development occurs in line with, not contrary to, the trajectory to net zero.

“We need to, and can, get the policy settings right to achieve affordability, security and sustainability through all stages of the transition to net zero. This is why at last week’s federal Budget the Australian government announced it would develop the Future Gas Strategy.

“The Strategy will support Australia’s energy system to become cleaner, cheaper and more reliable while maintaining our international reputation as a trusted energy supplier to the region.

“I invite members of the industry to contribute to the Future Gas Strategy, and to help us shape the future of our gas sector. Through the Future Gas Strategy, we will create a framework that balances energy security with affordability and investment certainty.”

The government is investing A$6.7-million to develop a Future Gas Strategy to support Australia’s energy system to reach 82% renewables by 2030 and become cleaner, cheaper and more reliable while maintaining our international reputation as a trusted energy supplier to the region.

Edited by Creamer Media Reporter

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