In order to better inform APIA members about the emissions reporting requirements and to encourage communication between the industry and government, APIA invited Director of the Greenhouse and Energy Reporting Taskforce Diane Barclay to speak about the NGER at the APIA Adelaide dinner on 9 April. Most of the members present were reassured after Diane’s address and also said they would be well-prepared to handle the new system.
APIA also provided a major submission to Garnaut Climate Change Review in response to a draft paper on a proposed Emissions Trading Scheme (ETS). The submission addresses various issues relevant to the natural gas transmission pipeline sector, and also refers to the expected need for CO2 transmission pipelines to assist the process of sequestration of greenhouse gases from electricity generation.
Principally, APIA submitted that in any effective ETS, a level playing field must be created for all participants. Specific
concerns raised by APIA included:
- the point of obligation or where liability for emissions from pipeline facilities fall;
- the impact on contractual positions arising as a result of the ETS, for example, the impact of contract clauses on the ability for pass through of costs incurred as a result of the ETS;
- potential liability for venting of off-specification gas;
- the treatment of trade exposed energy intensive industries;
- the role of the private sector in investment in natural gas and CO2 transmission pipelines; and,
- inconsistencies between the ETS and other schemes, such as the Mandatory Renewable Energy Target scheme.
The development of an effective system to reduce emissions is of key interest to the gas transmission industry, given the ability of natural gas to provide a relatively clean, efficient and water-friendly alternative to coal-fired power generation.
In addition, APIA has been in ongoing contact with the Federal Department of Resources, Energy and Tourism to raise awareness of the challenges of transporting carbon dioxide in the carbon capture and storage process. Any workable carbon capture technology will need to be developed keeping in mind the need to transport the captured carbon dioxide from the generation site to storage. In Australia, any storage site is likely to be at some distance from the source and pipelines are the only answer. The pipeline industry is already examining the challenges of long distance carbon dioxide pipelines and, with support in research and development, the industry is well-placed to undertake and manage transportation.
The APIA Regulatory and Economic Policy Committee met in Melbourne to review the implementation of the new National Gas Law and Gas Rules. A sub-group has also been formed to ensure an appropriate response to the Australian Energy Regulator’s Review of the Weighted Average Cost of Capital for electricity transmission and distribution businesses. This review has important implications for the AER’s future review of gas businesses.