Clear obstacles for $200b in projects, urges gas industry

Courier Mail Monday
1/6/2009 Page: 30

AUSTRALIA'S oil and gas industry wants project approval times cut, tax burdens eased and the planned emissions trading scheme's impact softened to help remove impediments to its more than $200 billion in planned projects. An Australian Petroleum Production and Exploration Association report released today says a target to lift annual liquefied natural gas production capacity to 50 million tonnes by 2017, from 20 million tonnes in 2008, is achievable given greenfield LNG project plans in Queensland, WA and the Northern Territory.

But it says in most cases the economics of these projects "remain challenging" and those with a go ahead decision due by late this year or early 2010 may be hurt by reduced lending and a drop in gas demand.

It says gas use is growing within Australia, largely as gas-fired power plants are promoted for emitting fewer greenhouse gas emissions than coalfired facilities. But it says gas use isn't growing at rates implied by targets calling for a doubling of gas usage for industrial purposes and a major increase in gas-fired electricity generation. The association says its vision is that the oil and gas industry soon will be seen as a "safe industry producing reliable, clean energy and substantial wealth".

An association spokeswoman couldn't say if gasfired power plants would still need to use technology currently in the experimental stage to capture and permanently store greenhouse gas emissions underground or beneath Australia's seabed. The association said bullish growth projections in some parts of the Australian gas market are being cut clue to falling investment in new mining and gas based processing projects.

Association chief executive Belinda Robinson said the recent Productivity Commission inquiry into the regulatory burden on Australia's oil and gas industry was an opportunity that could pave the way to addressing the "paralysing effect of Australia's regulatory maze", particularly for the small to midsize explorers and producers.