The Victorian Government’s Energy Statement represents another missed opportunity to address Australia’s gas supply problem, according to Australian Pipeline Industry Association (APIA).
National Policy Manager, Mr Steve Davies, said: “The Energy Statement identifies issues with infrastructure expansion and risk management in the Victorian gas market, yet completely ignores the effects of the Victorian Government’s moratorium on onshore drilling of gas supply and gas markets.
“The Victorian Government’s moratorium on all onshore gas drilling must be lifted immediately. With rigorous assessment and controls, drilling projects should be able to proceed. There is great potential and demand for Victorian onshore gas to assist in meeting the supply challenges facing the eastern Australian gas markets.”
Mr Davies said the Victorian Energy Statement is adding to the significant number of reviews of Australia’s gas market, which recognise the problem is a lack of gas supply.
“Yet, instead of proposing solutions that would help increase the supply of gas, the statement proposes market development that will marginally improve efficiency without increasing supply,” he said.
APIA welcomed the Victorian Energy Statement’s call for a more integrated market design for eastern seaboard gas markets, along with the review of governance and rule-making arrangements for the Victorian gas market.
”The greatest contributors to inconsistency across eastern Australian gas markets frameworks are the Victorian Declared Wholesale Gas Markets and the Victorian Transmission System,” Mr Davies said.
“Recognition of this is a vital first step in developing a single approach.”
Mr Davies said the Energy Statement’s proposal to advocate for improvements to information on transmission pipeline capacity and for the promotion of trading of transmission pipeline capacity is out of date: “In July 2014, APIA proposed that pipeline operators publish available capacity for the year ahead on the National Gas Bulletin Board.”
“This proposal is being considered through the CoAG Energy Council’s Capacity Trading initiative, which itself addresses the Energy Statement’s call for improved capacity trading.”
Further, he claims, to suggest that pipeline owners need to be encouraged to sell unused capacity ignores the simple fact that pipeline owners are service providers that derive 100 per cent of their revenue from selling transportation and associated services to market participants.
“Pipeline owners actively seek every opportunity to provide services and increase revenue. Introducing standardised contracts, as the statement recommends, would simply limit the ability of owners to offer innovative services and tailor flexible and individual service solutions.”
APPEA has echoed APIA in condemning the continued moratorium, with Chief Operating Officer, Paul Fennelly, saying “Moratoriums on gas exploration and hydraulic fracturing technologies, both processes which have been safely undertaken in Australia for decades, continue to put Victorian energy security on the backburner.”
“Today’s statement reflects the urgency of the issue at hand but offers no solution for households, businesses and a sector willing to invest in jobs and gas production.”