The Australian Petroleum Production & Exploration Association (APPEA) has called for a more open and competitive natural gas market in the country.
APPEA chief executive David Byers, commenting on the release of the federal government’s Eastern Domestic Gas Market Study, said Australia has more than enough gas resources to support domestic and export needs for decades.
Published earlier this month, the report claimed Australia’s gas markets are undergoing a period of substantial change as the country moves towards its first LNG exports in 2014.
Gas is currently the country’s third largest energy resource after coal and uranium, with an “unprecedented level of investment” in LNG projects occurring on the east coast, the report stated.
Australia is also responsible for a world first in gas markets – the development of LNG export trains based on CSG resources. The news may encourage more businesses to pursue CSG training to cope with increased demand in this area.
Compiled by the Department of Industry and the Bureau of Resources and Energy Economics, the study also argued for policy reforms to cope with this growth.
Gas market changes ‘needed’
Mr Byers said the research adds to the growing body of work that shows Australia needs to reduce the regulatory burden on the market to become more competitive.
“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,” he commented.
“The study also puts to rest any calls for interventions such as protectionist domestic gas reservation policies, unnecessary national interest tests or similar policies.”
Australia needs more gas production, Mr Byers noted, not more regulations. As such, the APPEA also backed the study’s emphasis on removing gas supply impediments in NSW and Victoria, two areas where regulations are the most stringent.
Existing gas agreements
However, while the APPEA welcomed many of the suggestions put forward in the paper it disputed the need for authorities to have more gas market information.
Referring to several gas supply agreements struck over the last 12 months, the organisation said there are a number of data points for the government to draw upon.
These include five separate agreements involving Origin Energy signing contracts for the supply of gas for up to nine years. The company will be working with MMG Group, Beach Energy Limited and Esso Australia, among others.
Nonetheless, the APPEA said it would continue to look for ways to work more closely with the government to amend current legislation.
“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,” Mr Byers stated.