The Australian pipeline industry is calling on policymakers to broaden their focus from pipeline regulation to policies that increase the availability of gas.
Australian Pipelines and Gas Association Chief Executive, Cheryl Cartwright, said increasing the supply of gas would ensure more efficient operation of markets, continuing infrastructure development, and help address the current imbalance where demand was outstripping supply.
“Unfortunately, the current policy priority seems to be gas transmission pipelines rather than gas supply,” Ms Cartwright said.
“The regulatory changes that have been proposed affect only the cost of transmission which amounts to as little as 5 per cent, and at most 15 per cent, of the cost of delivered gas.
“It’s worth noting that gas transmission prices haven’t increased in real terms in more than a decade.
“Work is already under way to improve competition and transparency in gas markets. The Australian Energy Markets Commission is working on important changes that are directly relevant to pipeline markets.”
Ms Cartwright said pipeline companies have accepted the case for capacity auctions and trading and, while this will be at some cost to the industry, they are responding to requests from market participants for some changes and improvements and these changes should be allowed to run their course before further regulation is introduced.
“The solution to the gas demand-supply imbalance is getting more gas into the system,” Ms Cartwright said.
“Removing the moratoria on the extraction of gas that applies in states such as Victoria would assist in increasing gas supply, but further development was needed.
“We should increase the use of gas because it would help Australia cut its carbon emissions.
“Electricity generated by natural gas has half the carbon emissions of coal-fired power generation and gas has even lower emissions when used directly in the home.”