The last seven years of the industry has been great,” Mr Macfarlane said. “We should now aspire to the next seven.”
Mr Macfarlane spoke of the need to maintain the growth and investment in the gas industry, including related infrastructure.
“It is a very strong, important, robust part of the economy.
“Where would we be if we had not invested in pipeline construction to provide the energy needs of Australia?”
NT link “quickest short-term solution” to east coast gas supply
Mr Macfarlane addressed the east coast gas supply issues, compounded by New South Wales’ inability to exploit the gas within their state due to community opposition.
“We are having supply problems in NSW, but there are opportunities across Australia to overcome this – from Victoria, to the Carnarvon Basin, to the Cooper Basin and the Northern Territory – there is a huge opportunity.
“The opportunity to work with farmers still exists in other states,” he said, pointing to the success that CSG and mining companies in his home state of Queensland have had with signing agreements with over 4,000 farmers.
And Mr Macfarlane sees pipeline development as the most efficient solution to the east coast gas supply issues, “The Northern Territory pipeline link is the quickest short-term solution.”
APA Group is currently undertaking a $2 million feasibility study into the pipeline, which would connect NT to the east coast gas market, and NT Chief Minister Adam Giles is keen to progress the project to promote development within the Territory.
Mr Macfarlane said that pipeline development such as this will in turn “drive back the confidence of the industry to continue to explore and produce gas”.
“There is ample gas for what we need here, the opportunity is that we supply the gas that is out there.”
Government to work with industry
Mr Macfarlane said that the government needs to work with industry to maximise the potential of the gas industry.
“Government wants to sit beside business, to get the framework right, and recognise the importance of what you’ve done already, and the potential for you to do more.”
To do this, he said that the government needs to make sure that the market has the best information on the industry possible.
This has been improved through the establishment of a trading board, and now Mr Macfarlane pointed to information on pipeline capacity as needing to be better understood. As part of this, the government will look at reducing transaction fees and other issues for pipeline trading.
The government also needs to make sure that there are opportunities for small producers of gas to produce gas for domestic supply.
“Domestic gas supply is not going to come from larger players focused on export.”
Short of a domestic gas reservation policy, Mr Macfarlane suggests that large users of domestic gas will likely team up with gas exploration companies to drive exploration for domestic gas, similarly to companies like Incitec Pivot who he says were a driving force behind the development of CSG in Queensland.
For its part, the government will streamline the approvals process for such development projects.
“We’re getting rid of the carbon tax and the mining tax, and we’re setting up a one-stop shop for approvals.
If your project is not going to fly – you need to know early.”
Mr Macfarlane said that the government will remove $2 billion of red tape over the next two years.
An Energy Whitepaper of substance
Mr Macfarlane said that the government intends to release an Energy Whitepaper by the end of the year, which will provide “clear, well-defined, meaningful policies” for the industry.
“I’m keen to hand down a whitepaper of substance that looks at energy right through to nuclear,” he said, stating that, as Australia moves into a pragmatic debate about lower emissions, nuclear energy will need to be part of the conversation.
“There are challenges to be met within the gas industry.
If we work together – state, federal governments and your industries – we can meet them.”
“The opportunities in the gas and pipeline industry are still enormous in Australia.”
The Brisbane APIA dinner was sponsored by Nacap and IDM.
Ian Macfarlane’s top 3 challenges for pipeline industry:
1.Clarity of information around trading pipeline capacity.
2.Reduction in transaction fees/issues for pipeline trading.
3.Industry, and State, Territory and Commonwealth governments need to work together to ensure east coast domestic gas supply.