Many APIA members deal with transportation of other products: slurry, water and oil. But, broadly, the pipeline industry as a whole will be worse off if there is an overall, long-term decline in the demand for natural gas in Australia.
Some nine years ago when I first joined the Association, the lack of a gas advocacy organisation was lamented. The Board at the time told me that APIA should fill this gap. And we did – for a few years. Through my connections at Parliament House and in the media, I used stories about gas and electricity and climate change to provide comment from the perspective of the gas industry, thus raising APIA’s profile.
Even at the beginning of the surge in activity in Queensland’s coal seam gas (CSG) industry, when the upstream lobby group was slow to respond to the call by its members to increase representation in Queensland, APIA called interested parties together. It was a very animated, but also a very productive, meeting. APIA took on the task of developing the CSG Code of Practice for Polyethylene Pipelines and the Australian Petroleum Production and Exploration Association established an office in Brisbane.
Until recently, politicians and other enthusiasts were hailing Australia’s “golden age of gas”. While it’s a golden age for exporting gas, it has not proven to be a golden age for many major Australian users of gas. There is increasing evidence that the CSG developments might not be able to meet the LNG demand in the early stages, with gas that might have been designated for domestic use now being redirected to export contracts.
There is an argument that, without the CSG-to-LNG export industry and the increased dollars it brings to the nation, Australia would not have been able to afford to drill the more difficult gas fields. This is quite true; however, without the CSG-to-LNG export industry and the increased demand to fill export contracts, we might not have needed to access these difficult, expensive gas fields for many years to come. There would have been enough gas for our domestic use, with prices rising at a slower rate. What we see instead are major LNG contracts that have been signed and must be filled, facing the challenge of an apparent shortage of gas from those same CSG fields. We hear about contracts being signed for gas for export – gas that might usually have been provided for the domestic market. Nevertheless, while we hear about these arrangements, there is no formal mechanism to provide accurate information.
When challenged, the upstream industry often says “there’s plenty of gas; it’s just that we can’t get pipeline capacity”. Anyone involved in the industry knows this suggestion is misguided. The pipeline owners are in the business of selling capacity – if it’s not available it will be built. Unfortunately, these claims sometimes receive an airing because of a lack of understanding of the industry.
So APIA’s role on this issue is an important one. Sure, we must continue to take care of all our members by continuing our activities such as networking opportunities; training; mentoring and educational opportunities for young people; safety; environment; operations and maintenance information – but we must also ensure the local gas industry is not gutted by the impact of these higher prices, however long they last.
A strong domestic gas industry means pipeline infrastructure owners are doing business – and if the owners are doing business, then there will continue to be work for the pipeline industry. To quote a
long-term APIA Board member who works in the construction industry, “happy owners mean happy pipeliners”.
APIA has been fighting for, and will continue to fight for, pipeliners, and the Australian gas industry.