APIA welcomes release of Victorian Gas Market Taskforce report

As the representative of the gas transmission industry, APIA supports the report’s conclusions on the importance of improving access to Victoria’s onshore gas reserves.

“East coast gas markets are facing big changes and big challenges over the coming years as the LNG export facilities in Queensland come on line and shift the supply and demand dynamics,’ said APIA Chief Executive Cheryl Cartwright.

“As the Taskforce’s Chair Peter Reith rightly notes in his introduction, “˜The only sensible course of action is for the Victorian Government and other eastern states to promote production of additional gas supply.'”

APIA believes a high priority should be to act on the report’s recommendation to appointment of a Victorian Gas Commissioner. A government appointed Gas Commissioner would consult with and build landholder and community confidence in the processes around unconventional gas exploration and the potential for development in Victoria and provide an important bridge between government, industry and the community.

“The importance of an impartial, central source of information cannot be underestimated,” said Ms Cartwright.

“The experience in Queensland has shown that the Government can play a key role in providing facts to communities that they can trust.

“Such an appointment doesn’t mean industry should take a backseat on community engagement. The gas industry has to earn the social licence to operate in Victoria and must not brush aside community concerns.”

Following the release of the report, Victorian Premier Denis Napthine said the government will undertake:

  • A comprehensive and independent water study;
  • A continuation of the moratorium on hydraulic fracturing;
  • A ban on benzene, toluene, ethylbenzene and xylene (BTEX) chemicals which will be enshrined in legislation; and,
  • A formal community consultation process that will report in July 2015.

“The release of the Gas Market Taskforce’s report demonstrates the Coalition Government’s commitment to transparency and is the first step in a consultative process to seek Victorians’ views on issues of concern in regard to onshore gas in Victoria,” Dr Napthine said.

Dr Napthine said the second stage of the process will involve Minister for Energy and Resources, the Hon Nicholas Kotsiras, commencing a thorough facilitated consultation process from April 2014 across Victorian communities to seek community and individual responses directly.

“This 12-month community consultation process will include public submissions, thorough facilitated community meetings and workshops with key stakeholders such as farmers, environmental groups, community groups and individuals across Victoria,” Dr Napthine said.

The study will include work by Geoscience Australia, which also worked on the report, involving benchmarking research of the water table and aquifers, with the study process to be completed in May 2015 and provided to the Victorian Government at that point.

In response to the Victorian Government’s decision not to take action on the report, Australian Petroleum Production and Exploration Association (APPEA) Chief Operating Officer – Eastern Australia Paul Fennelly said, “The decision taken by the Victorian Government is an extraordinary rebuff of the gas market review that will further delay diversifying the development of natural gas resources in that state and it will result in higher than necessary energy prices.

“Protracted decision making processes mean no decision will be made to progress Victoria’s onshore gas industry for at least another two years.”

Mr Fennelly said the response was an unacceptable outcome, “given it can take companies up to five years to get projects through approval processes to commission”.

The report details recommendations to ensure the application of the highest standards of regulatory and scientific oversight of the gas industry, while also suggesting that where aquifers are connected (either between onshore and offshore sources, or aquifers at different depths), all users should be required to hold a water licence and be subject to coordinated management under the Water Act 1989.

“As a general rule, under the Water Act any prospective water user should be treated equitably,” the report says.

“In Victoria, CSG producers (regulated under the MRSDA) are required to meet their water use by obtaining a water licence, or trading a water licence within the cap of the relevant water resource.

“Proponents of shale and tight gas (regulated under the Petroleum Act 1998) are also required to hold a water licence if they use water.

“Offshore oil and gas producers in Commonwealth waters are not subject to state legislation and are not currently required to hold a water licence.”

To view the full report, click here.

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