Australian Petroleum Industry Body Says Policy Risk to Eastern Gas Market Must be Addressed

Regulatory failure remains the biggest risk to a more competitive eastern Australia gas market, the Australian Petroleum Production & Exploration Association (APPEA) said last week.

“The greatest risk to the market is regulatory failure, not market failure,” said APPEA Chief Executive Malcolm Roberts. “Australia has ample gas resources to supply domestic and export markets. But at a time of unprecedented demand, recent government policies risk creating an artificial shortage of gas and higher prices.”

Roberts said removing unnecessary government restrictions on exploration and development is the most effective way to enhance supply and put downward pressure on prices.

“APPEA trusts that the Australian Competition and Consumer Commission, in its East Coast Gas Inquiry, will highlight how sensible policy changes will help producers and users alike,” he added.

Gas producers and their customers are amid rapid change as the local gas market becomes increasingly connected with global markets, he said.

“As established reserves are drawn down, producers must develop new, more costly sources of supply. In particular, conventional gas reserves in eastern Australia are declining. Without the stimulus of LNG exports, we would not have seen the massive investment in unlocking unconventional reserves and upgrading infrastructure which all of our customers need,” Roberts said.