The Australian pipeline industry has called on policy-makers to broaden their focus from pipeline regulation to consider policies that would increase the gas available to both domestic and manufacturing consumers.
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, APGA Chief Executive Cheryl Cartwright said.
“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,” Ms Cartwright said.
“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.
“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.
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,” Ms Cartwright said.
“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.”
Ms Cartwright is a panellist in a discussion on gas supply at the Re-Powering NSW 2016 Conference being held in Sydney today.