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Study shows gas market is delivering for all Australians

10 January, 2014

The Australian government's latest review of the gas market, the 'Domestic Gas Market Study', released 3 January 2014, shows the market is indeed working to supply natural gas for both domestic and export use.

The review also highlights that the continuation of the market's capacity to deliver depends on industry's ability to continue to explore and develop Australia's vast gas resources. It is not a lack of natural gas but onerous regulatory restrictions in some jurisdictions (notably NSW and Victoria) that is impeding gas supply.

APPEA chief executive, David Byers, said: "The study follows a long line of previous reviews and reports, including the comprehensive Australian government 2012 Energy White Paper (itself five years in gestation), that show Australia has more than enough gas to supply both domestic and export markets for decades to come.

"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.

"Australia more gas production, not more regulation. With that in mind, APPEA welcomes the study's emphasis on existing gas supply impediments in NSW and Victoria. APPEA looks forward to working further with SCER to allow a more efficient and science-based regime to be developed and implemented in those jurisdictions.

"The study also puts to rest any calls for interventions such as protectionist domestic gas reservation policies, unnecessary national interest tests or similar policies. The study rightly highlights the inefficient and unnecessary nature of such interventions.

"In relation to the recommendation for an industry-led initiative to provide more 'information' to the market, APPEA notes the gas market already has abundant information available to it.  The range of gas supply agreements that have been struck over the last 12 months suggests that there is enough information available to allow supply contracts to be concluded between willing buyers and sellers.

"Nevertheless, APPEA will carefully consider this recommendation and look forward to further discussion with the government on how this might work in practice.

"APPEA cautions against recommendations that will add further to the profusion of reviews to which the gas market been subject in recent years. In particular, recommendations for a further review of the competitive nature of the gas market are unnecessary and will lead to further market uncertainty.

"APPEA calls on all parties to recognise the benefits associated with removing impediments to further gas supply, rejecting protectionist and unnecessary interventions, and acknowledging the need for an efficient regulatory regime in all Australian jurisdictions.

"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.

"The industry will carefully examine all of the recommendations contained in the study, and will seek to engage with the new government on the development of its 'East Coast Gas Strategy to 2020' and new 'Energy White Paper'."

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Kevin Simpson | Wednesday, January 15, 2014, 10:28 AM
Interesting that this load of rubbish story never once utters the unspeakable three words COAL SEAM GAS. The regulatory restrictions referred to are obviously the ones that are preventing the destruction of valuable farm land and the pollution of our water tables. The gas industry is finished without CSG and is therefore finished. How about a report on the viability of new non polluting energy sources? That would make more sense.
Bob de Voter | Wednesday, January 15, 2014, 11:23 AM
Propaganda at it's worst. A "report" put together by representatives of the gas producers was always going to say that the industry knows what it's doing, has systems to control drilling practices and that the customers determine the pricing. Absolute garbage. APPEA members are holding back the gas so they can 1)pressure Government to allow access to CSG and 2) keep the prices high for international and domestic customers. The Australian Government is allowing these APPEA members to charge us all whatever they want for NG and LPG. Not only are we selling the farms, but also polluting our unique underground Artesian Basin.
Hayrick | Wednesday, January 15, 2014, 11:51 AM
No mention of all the extra tax revenue the Government (people of Australia) are going to get from the PROFITS accruing from the extortionate (highest) international price model (or oil/gas BTU model) that ignores USA prices - ah well!... maybe there isn't any profit for us poor landowners.. suckers? (as that is to be exported too).
Bert Stahr | Thursday, January 16, 2014, 7:56 AM
Without energy everything stops. Here in Australia we have various groups of protesters who want to stop all mining and forestry industries. They also want to stop manufacturing as it also pollutes. Not much left is there? However all is not lost. Australia has a new & fast emerging industry---PROTESING. Save the bubonic rat!!!!!!!
Hayrick | Thursday, January 16, 2014, 1:12 PM
Bert don't get upset, we still live in a civil society , although the monopolies might not like it. Why should we suffer extortion if there is no benefit to our society. No sane person is against development but not rape and pillage that benefits only those sanctioned by perverted laws that are used to obtain "legalized plunder" for any group, that the law is turned against the only things that matter to human beings (life, liberty, and property) must be wrong surely. it is all a balancing act that should be resolved by informed debate - not mining 'right' or 'collateral' environmental destruction. We all need to live and hopefully enjoy justice - in Australia we stumble along, nothing is perfect or as simple as a Daily Telegraph headline.
Goldie | Sunday, January 19, 2014, 2:07 PM
Why no reservation of gas for domestic consumption and at a discounted price? Why is it that the majority of Australians get nothing from the vast resource reserves this country has. If all this is so a handful of workers can get large wages and governments get a few dollars in tax whilst multinationals take the rest then I think the wider population is being short changed. Cheaper gas for industry and consumers would mean we all get something which is not unreasonable unless of course you talk to industry types and hard headed economists who think we live in a fair world where no one else helps their own people.
Hayrick | Monday, January 20, 2014, 12:12 PM
Full support Goldie, it seems that our politicians are descended from a long line of carpetbaggers. That is the way we do business. The 'Government gas market study' is quite revealing on the potential for us all to get screwed (actually make that present tense). The QLD gas hubs overestimated the flow of gas, they don't suffer, NSW gas supply is purloined, the public is scared by stories of shortage and the gas price goes up to reward the developer/suppliers - a neat scam so International investors (and QLD) do not suffer a shortfall. The study predicts that within 5 years over 80% of our gas will be shipped offshore and you can bet that will increase if the market demands. Yes, gas development costs will go up as supply gets tighter but you have to ask who benefits from the easy finds (the low hanging fruit). Other Countries demand a slice, who gets the pay-off here, you have to wonder? Of course development costs are expensive in Australia, perhaps more expensive than they should be so that losses can be brought to book (and tax deduction) whilst profits are exported via overseas structured wholesale agreements as part of myriad of company structures that eventually retails the gas by Bermuda or Liechtenstein owned entities. Not to mention the variability of gas pressure, unaccountable pipeline and shipping losses, contamination, BTU averaging and gas bleed - hmmm! So many ways to skin a cat?