Striking a balance in Eastern Australia’s gas marketDOWNLOAD
15 May 2012: A new paper from professional services firm Deloitte says that the economic benefits of the emerging LNG export market could be lost if our domestic market fails to supply gas in a quantity and at a price that maintains our economic competitiveness.
Written by Deloitte’s National Oil and Gas Leader, Stephen Reid, the paper ‘Striking a Balance: Managing supply and demand issues in the Eastern Australia Gas Market’ explores the challenges facing industry and argues that it is critical Australia’s proven reserves are able to be commercialised in time to meet increased domestic demand and take advantage of the enormous export opportunities.
“The establishment of a large scale gas industry on the east coast is crucial to meeting both the domestic and international market demand, but an uncertain regulatory environment and rising extraction and production costs could jeopardise the ongoing investment required to secure that future,” he said.
According to Mr Reid the booming LNG export market and the Federal Government’s push to reduce carbon emissions by moving away from coal to gas-fired power generation could see pressure on gas supply in Eastern Australia over coming decades, just as conventional reserves were declining and the NSW coal seam gas industry was facing heightened government and community scrutiny.
“Eastern Australia’s gas market is currently facing an unprecedented convergence of issues that have the potential to both transform it into one of the world’s largest LNG exporters, and present challenges for the future security of its domestic gas supply.”
“Australia is poised on the edge of an incredible opportunity but much depends on acting sooner rather than later to address these challenges.”
“A thriving and competitive domestic gas industry is critical to ensuring the competitively priced energy that is a key economic driver of growth. If the importance of a secure and affordable domestic gas supply is underestimated, ultimately Australia’s trade exposed productivity and competitiveness could be compromised,” Mr Reid said.