(EnergyAsia, April 3 2012, Tuesday) — Australia’s upstream oil and gas industry wants the Federal government to use a mix of “competitive markets” and specific “policy interventions” to protect the sector’s international competitiveness and ability to meet domestic energy demand.
 
In its submission for consideration in the Federal government’s Energy White Paper, the Australian Petroleum Production & Exploration Association (APPEA) said a long-term principles-based framework is needed to meet the country’s growing domestic gas demand, and the on-time and on-budget completion of A$180 billion worth of liquefied natural gas (LNG) projects.

The association said the policy framework should ensure that companies have access to oil and gas resources for viable exploration and development, and access to domestic and international markets on internationally competitive terms.

APPEA wants a fiscal, policy and regulatory framework that encourages long-term investment in exploration, development and production including a continuation of the existing immediate tax deductibility of all exploration-related costs, a workplace relations framework that encourages productivity and flexibility, and the streamlining of “inefficient” clean energy and emissions-reduction programmes that it said has failed on both environmental and economic grounds.
 
APPEA said there are market “gaps” in current policy as industries and technologies are inefficient and not cost-effective, and market gaps should not be confused with genuine market failures.

The association’s chief executive, David Byers, said:

“Too often, calls for policy interventions reflect dissatisfaction with the operation of competitive markets, or have an ‘industry development’ justification, and do not reflect genuine market failure.

“Interventions to develop new industries or to protect stalled or faltering industries misallocate resources and have the potential to hurt Australia’s international competitiveness. Calls for intervention on this basis should be resisted by the government.

“Adhering to a long-term principles-based framework is the only sensible way to assess the many calls for ‘industry development’ or special treatment that are likely to be put forward in submissions responding to the Draft White Paper.”