“We hope that this change will help to highlight the benefits to the economy and the environment of investment in natural gas,” APIA Chief Executive Cheryl Cartwright said today.

“Natural gas used to generate electricity has less than half the emissions of coal-fired power generation,” Ms Cartwright said.

“It will also be required into the future as Australia moves towards more reliance on renewable energy sources. Gas will be the back-up fuel for these intermittent energy sources, as well as the fuel used during peak demand times.

“By folding the Climate Change Department into the Industry and Innovation Department, we hope to see a strong focus on the economic and environment benefits of natural gas.”

Gas Transmission Industry welcomes Climate Change Department incorporation into Industry Department

“Mr Gray has a strong background in the resources industry, with a particular focus on the Western Australian sector, and we look forward to working with him on energy policy,” APIA Chief Executive Cheryl Cartwright said today.

“Natural gas is an important commodity for Australia – both as an export and for use in the domestic market.

“Australia faces a real challenge to address the current demand and supply issues in the gas industry.

“While the challenge of gas supply and gas pricing is a little different in the West compared to the East of the continent, we look forward to working with Mr Gray to ensure Australia has a national gas policy that encourages this industry.”

New Resources and Energy Minister

The issues and policies of the Department are varied and challenging and Drew has always encouraged industry’s participation, providing honest and helpful feedback, as Secretary, and in his previous roles.

I would like to thank Drew personally for his support and guidance – and his fairness. We wish him well in his new role.

The Energy Department’s loss is the Communication Department’s gain as he takes up his new role as Secretary of the Department of Broadband, Communications and the Digital Economy.

Departure of Resources & Energy Department Secretary

“The manufacturers are right, this is a major challenge for policymakers as a shortage of natural gas is expected to cause a dramatic domestic price hike which is likely to be detrimental to many Australian businesses,” Ms Cheryl Cartwright, Chief Executive of the Australian Pipeline Industry (representing the gas transmission industry) said today.

“Gas reservation is not the answer; increasing the supply of gas is.”

However, Ms Cartwright warned that a transparent gas market, while a useful tool, would not increase gas supply or address shortfalls driving the concerns expressed by manufacturers today.

“Increasing transparency through the Short Term Trading Market and the Gas Bulletin Board has not led to increasing the supply of gas over the past few years – and nor will a proposed supply hub being proposed for Queensland,” Ms Cartwright said.

“The price bubble is occurring with or without trading hubs. Natural gas is marketed in Australia under long-term contracts, so while trading hubs provide transparency, only a small amount of ‘balancing’ (or left-over) gas is actually traded – this does not increase the quantity of gas in the system.

“The price bubble, that could see the price of gas treble for several years in the eastern States, is being caused by the slowdown in access to coal seam gas.

“Governments have two choices – ensure access to supply to reduce the size of this price increase, or provide temporary assistance to companies that cannot survive until the price settles.

“An independent inquiry would help to resolve this issue.”

Gas transmission industry supports manufaturers’ call for inquiry into gas shortfall

According to work being undertaken by the Australian Pipeline Industry Association, and economic consultancy, ACIL Tasman, LNG exports from Australia and the slowdown in coal seam gas development may lead to a supply shortfall of natural gas and an up to seven-year east coast gas price “bubble”.

“Such a short-to-medium term price hike has the potential to close down Australian businesses unable to deal with an explosion in the price they pay for their gas,” Cheryl Cartwright, Chief Executive of the Australian Pipeline Industry Association (APIA), said today.

“Federal Government claims that market development initiatives such as the Gas Bulletin Board, the Short Term Trading Market and a proposed gas supply hub at Wallumbilla in Queensland can assist in providing access to affordable gas are, at best, misguided”, Ms Cartwright said.

“While such mechanisms increase information availability and demand flexibility, they do not provide more gas to Australian industry, nor will they reduce prices. The Gas Bulletin Board and Short Term Trading Markets are already in place and are doing nothing to prevent the supply and prices issues facing Australian industry.”

Ms Cartwright’s warning was issued in the response by the APIA to the just released Federal Government’s Energy White Paper.

“While the Energy White Paper is welcome, and its call for regular review of the energy economy demonstrates foresight, there remains the fundamental challenge facing Australia’s energy industries, and that is, the cost to the domestic economy of linking national gas prices to LNG-export prices,” Ms Cartwright said.

“However, APIA agrees with the suggested part-solution to addressing the price bubble, and that is improved access to the nation’s vast gas reserves in order to increase gas supply.”

“The current delays in coal seam gas developments in Queensland and New South Wales will coincide with LNG-export demand coming on line, and exporting companies will need to draw on gas that had been anticipated to be available to Australian gas users.”

Ms Cartwright pointed to a graph (attached), developed by ACIL Tasman, which demonstrates the expected seven year east coast price “bubble” commencing from 2013   and tailing off by 2020 as gas production eventually meets market demand.

“After this ‘bubble’, or without the ‘bubble’, it is expected the price of gas would increase, but remain affordable,” Ms Cartwright said.

“Right now, the answer to affordable gas prices is to not tinker with end markets, nor gas transportation – the solution is to address gas supply – and ensure that businesses threatened by a short-to-medium term price hike can survive until the price levels out.

“With the vast resources of natural gas in Australia, improved access will address supply issues – which will in turn assist in bringing prices down. In the meantime, Government should seriously consider whether it wants a short-term gas supply crisis to permanently damage some sectors of the economy.

“If businesses are not viable in the long-term, then market forces should allow them to close or move offshore, but if the dramatically high price of this input to their business is temporary, the Government should step in.

“As we have seen already, a failure by Governments to step in has led to the closure of many manufacturing businesses – including steel pipeline manufacture, which has closed forever because of the high Australian dollar and the tardiness of any useful action by the Government’s Manufacturing Taskforce, led by former Queensland Premier Peter Beattie.

“It would be a tragedy if this mistake is repeated. Future transmission infrastructure construction will be hampered by the lack of local production.”

Energy Policy must address looming gas price “bubble”

Speaking in Brisbane on the eve of the 44^th annual conference of The Australian Pipeline Industry Association (APIA), Chief executive Ms Cheryl Cartwright, said no governments or opposition parties in Australia seemed to have a clear gas-focussed policy.

“Most discussion is about LNG and the export of natural gas, with little focus on ensuring the long term availability of natural gas on the home front,” Ms Cartwright said.

“So far, any debate or discussion about provision of natural gas for Australian industry is bogged down on reservation policy, which can be ineffective,” she said.

“What we need is proactive government. What we need are governments that are prepared to take that step forward to make sure that the vast reserves of natural gas in Australia are accessible.

“If we encourage development of natural gas reserves, we won’t have to enforce retention of some gas from LNG export to be used in Australia. We have abundant supplies of natural gas – let’s make it available to Australians.”

Ms Cartwright said natural gas is the fuel of the future in the drive to reduce carbon emissions.

Skills Transfer a “major concern”

“One important issue, Skills Transfer, is a major concern throughout the industry. APIA is addressing this issue by providing an aid to training, with a detailed competency matrix now available to members on the association’s website,” Ms Cartwright said.

“This matrix is helping young people to choose their career direction and also helping companies to assist the skills within their organisations.

“In fact, this competency document seems to be the only one of its kind in this industry anywhere in the world. So much so, that the American industry has entered negotiations to purchase it so they can refine it for their own requirements.”

Minister Martin Ferguson – Keynote Speaker

The Hon Martin Ferguson AM MP – Federal Minister for Resources & Energy – is keynote speaker tomorrow morning (Monday) when the APIA Convention business sessions begin at the Brisbane Conference and Exhibition Centre.

Another keynote address will be delivered by Mr Les Dawson, OBE – President of the Pipeline Industry Guild, United Kingdom.

Mr Kevin Lester – APIA President and the APA Group’s Group Executive, Infrastructure Development – will also address the opening session along with APIA Chief Executive, Ms Cheryl Cartwright.

Mr Lester said the largest growth in activity in the pipeline industry in recent years has been in Queensland and examples of the development in the state would be included in papers to be presented during the conference business sessions.

“Also, with such tremendous interest in our industry now, this year we will trial streaming during parts of the business sessions,” he said.

“At the same time as an extended Pipeline Operators Group session, there will be a session on coal seam gas (CSG)and another covering safety in construction.

“With the Convention theme: The Pipeline Industry – Expertise; Growth, Opportunity, we will also see papers covering Environment, Construction, Training, Commercial and Projects,” Mr Lester said.

This week’s APIA convention and exhibition – the only annual forum in Australia for the nation’s multi-billion dollar pipeline industry – includes a record number of 121 exhibition stands.

MEDIA ROOM -  ROOM M5 at the Convention Centre

Media representatives are invited to attend the two-day business sessions and the exhibition on Monday and Tuesday.

Field Public Relations’ John Field will be providing media room services from the Conference forum (Media Room is M5 meeting room) at the Brisbane Conference & Exhibition Centre where internet access is available.

Gas-focussed Policy Required for Australia: Gas Transmission Chief Executive

Congratulations to Scott Pearce of CNC Project Management for winning the 2012 Young Achievement Award.

The 2012 annual APIA Safety Award was awarded to McConnell Dowell Constructors (Aust) Pty Ltd for their new and well-defined safety system, Driving Safely – Journey Management and Emergency Preparedness on Mega Pipeline Projects.

The 2012 inaugural APIA Environment Award was awarded to McConnell Dowell Constructors (Aust) Pty Ltd for their new and well-defined Environmental Management practice, Environmental Compliance – Drainage, Erosion and Sediment Control Planning.