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Concerted policy push required to unlock Australia’s energy reserves

Concerted policy push required to unlock Australia’s energy reserves

Photo by Bloomberg

10th November 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – The Business Council of Australia on Monday called for concerted policy action to unlock the country’s energy reserves and to allow Australia to compete with other energy-rich nations in supplying world demand.

“Governments, the community and business need to work collaboratively to achieve a balanced approach to energy policy that will help spur economic growth, jobs and improved living standards while safeguarding the environment.

“If Australia does not act to strike the right balance in energy policy, our comparative advantage in energy will continue to weaken, the Australian economy as a whole will be less competitive and consumers will be worse off,” said Business Council CEO Jennifer Westacott.

“Australian energy resource projects are facing increasing competition from countries with access to extensive energy resources, but with a lower cost base than Australia. At the same time, the cost of delivering our electricity and gas to our homes and business is increasing.”

Westacott noted that while there was significant opportunity for Australia to supply the rising global energy demand, specifically to the Asian markets, given its experience in doing business in the region and the quality of the country’s resources, a concerted policy action was needed to unlock energy reserves, improve the efficiency of Australia’s energy markets and improve climate change policy.

“This will involve a careful balance between meeting global demand and providing affordable and reliable energy to households and businesses. This balance can only be achieved through honest and respectful community engagement – by being open and clear with people about the choices, and the implications for jobs and standards of living,” she said.

In its latest research, titled 'Australia’s Energy Advantages', the Business Council made a number of recommendations, covering five key areas, including improving the competitiveness of the resources sector by lowering the cost of production, ensuring access to the country’s natural gas resources, improving information and trading in the gas markets, improving the efficient operation of Australia’s electricity markets by moving to prices that reflected the cost of delivery to consumers, and underpinning Australia’s liquid fuels security by continuing to support access to open and competitive domestic and international markets.

The report also suggested that policy should cost-effectively manage greenhouse-gas emissions by driving investment in research and development in technology, and by acting in tandem with the world to reduce emissions at least cost to the economy.

The gas transmission industry has welcomed the report, with the CEO of the Australian Pipeline Industry Association, Cheryl Cartwright, saying it was a clear reminder that the answer to any gas shortage in Australia was not reserving gas, but encouraging increased supply.

“Recent reforms have concentrated on transmission and downstream and there needs to be increased focus on encouraging supply,” Cartwright said.

She noted that while the council’s report had not commented on the important role that increased competition could play in improving supply, the government could encourage an increased gas supply.

“When the major liquefied natural gas facilities in Queensland come on line, the increased demand will challenge the market on the east coast as gas exports become three times the size of the domestic market.

“Governments should ensure that the development of coal seam gas in New South Wales and Victoria proceeds and encourage major and new explorers and producers to develop enough natural gas to meet the demands of both the export and domestic markets,” Cartwright said.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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