LNG could drive economy

AUSTRALIA has enough oil and gas projects on the drawing board to drive the nation’s economic recovery, says a new industry report issued this week.

According to the State of the Industry 2009 report released in Darwin on Monday (June 1) at the Australian Petroleum Production and Exploration Association (APPEA) conference, 50,000 jobs and $10 billion in annual government revenue would be created if all currently proposed energy projects were realised.

APPEA chairman Eric Streitberg said Australia could supply up to 20 per cent of the world’s liquefied natural gas (LNG) if governments took the steps needed to get billions of dollars of existing projects off the ground.

“Further progress in a number of key areas could see Australia's oil and gas industry potentially drive Australia's economic recovery,” said Mr Streitberg.

“We provide nine per cent of global supply, and if we get the policy settings right we have the potential to grow to 20 per cent,” he said.

The APPEA report says a target to lift annual LNG production capacity to 50 million tonnes by 2017, from 20 million tonnes in 2008, is achievable via LNG projects in Queensland, Western Australia and the Northern Territory.



“In seeking ways to stimulate economic recovery, governments should note that few other industry sectors have so many prospective major projects at such an advanced stage of planning,” said the report.

“Governments have the opportunity to put in place a policy framework that will trigger the step-change increase in oil and gas exploration and development activity.

“The benefits to be gained in the form of increased employment and wealth creation for Australians and the secure supply of clean energy at home and abroad are very substantial.” The APPEA claims about 180 million tonnes of global greenhouse gas emissions would be avoided each year if currently proposed projects valued at more than $200 billion were realised, but wants project approval times cut, tax burdens eased and the planned emissions trading scheme’s impact softened to accelerate the industry.

APPEA chief executive Belinda Robinson said the regulatory burden on Australia's oil and gas industry had a “paralysing effect”, especially on small to mid-size explorers and producers.

Ms Robinson described a 50 per cent reduction in approval times for projects as a “reasonable objective”.

“An across-the-board one-year reduction in total approval time for major projects could generate future national income gains in the billions of dollars each year,” she said.

The APPEA says that while Australia’s oil production will continue to fall, the rapidly expanding LNG industry could more than offset its decline. But it warns that zealous growth projections from some parts of the Australian gas market will be reduced as a result of falling investment in new mining and gas-based processing projects.