AUSTRALIA’S oil and gas lobby group says Rob Katter’s calls for a gas reserve policy to be immediately introduced will stifle exploration and development.
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The Member for Mount Isa says a reservation policy must be implemented as the Queensland government reviews the petroleum and gas industry.
“Through a gas reserve policy, we can ensure the Queensland industry has access to competitively priced gas and while remaining a viable participant in the gas export market,” Mr Katter said.
“Demand is rising and we need to be sure sufficient allowances are reserved for the benefit of Queensland.”
But a report into the domestic gas debate from the Australian Petroleum Production and Exploration Association said gas reservation policies actually “impaired local gas supply and affordability, rather than improve it”.
“Exploring for gas and developing gas projects are expensive and high-risk activities,” the report stated.
“Gas companies undertake exploration and development on the understanding that they will receive commercial returns for their investment.
‘‘Laws that dictate where and how gas can be sold will inevitably deter the very investment needed to develop Australia’s abundant gas reserves.
“Introducing gas reservation policy would do nothing to stimulate the exploration and development needed to deliver the new gas supplies and new infrastructure that would put downward pressure on prices.
“In an advanced economy underpinned by competitive markets, such as Australia, one industry should not be required to subsidise the activities of another.
‘‘In all sectors of the economy – not just oil and gas – maintaining access to open and competitive markets is in Australia’s best interest.”
APPEA Eastern Australia chief operating officer Paul Fennelly said the state government’s plan would be a winner for Queensland if it encouraged the ongoing growth of an industry that was already delivering major benefits for the State.
“With commitment and determination, we can achieve the right policy settings to ensure the natural gas industry continues to power the Queensland economy for decades to come,” Mr Fennelly said.
“It is essential that the plan focus on policies that will substantially enhance the industry’s global competitiveness and encourage investment in new exploration and production.
“That means continuing to reject unworkable intervention policies, such as domestic gas reservation, that will deter investment and only create adverse economic outcomes in the longer term.”
Mr Fennelly said the investment of more than $70 billion worth of new gas infrastructure in Queensland since 2010 would help Australia become the world’s leading liquefied natural gas exporter by in the next few years.
“With domestic and global demand for gas forecast to increase, Queensland can attract further investment and growth in the industry if we get the policy settings right,” he said.
Mr Katter said with supply expected to be under pressure, as explosives and fertiliser producer Incitec Pivot has suggested, Queensland should move quickly to reserve a set percentage of its gas supply for domestic use.
Western Australia is the only state with a gas reserve policy, reserving 15 per cent of the gas produced to ensure continued supply is available.
“We should expect that a finite resource should go back to benefit the very state from which it came,” Mr Katter said.
“It seems madness that we should sell everything and let our own people go short.”
With the ability to prevent the resource from competing on the international stage prices can be controlled, putting the national interest over the interest of oil and gas producers.
“The insulation of the market will be used to help keep electricity at a price our pensioners, young families and our industries can afford,” Mr Katter said.
A proposal for a gas pipeline from Tennant Creek to Mount Isa, linking Northern Territory gas to the East Coast, is likely to be made official in coming weeks with a proponent chosen to build the connection.
Mr Katter said a gas reserve policy wouldn’t affect the gas pipeline despite concerns from some industry groups it would stifle exploration.
“There is room for both projects, this will help ensure energy prices in the North West are in line with the rest of the country,” he said.
“Currently the North West isn’t connected to the national grid so we are completely reliant on the cost of gas – assurance in the market can only be a good thing.”
An environmental group wants a cost-benefit analysis be undertaken on the coal seam gas industry in light of the Queensland government’s ‘‘misleading statements’’ about its benefits.
The Lock the Gate Alliance accused the state government of being misled by mining giants.
“The Queensland government is being hoodwinked by the greedy mining giants into thinking there’s a gas shortage and the industry needs propping up to protect jobs and keep prices down,” Lock the Gate spokesman Drew Hutton said.
“Nothing could be further from the truth and that’s why we need an honest and independent cost-benefit analysis.
“Mining companies here should be forced to provide gas cheaply to domestic industry because there is already in abundance and because of the adverse impacts it’s having in rural and regional communities.
“CSG mining is not clean, not safe and not necessary.
‘‘Australia must embrace renewable energy to save our farming land, our water, health and communities.”