Anti-gas policy hinders CO2 cuts: APPEA
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The nation's peak oil and gas lobby has warned that continuing tax breaks for coal-fired power and subsidies for renewable energy are hindering investment in "clean" gas development.
Releasing its State of the Industry 2010 report today, the Australian Petroleum Production and Exploration Association said existing government policy continued to favour coal and renewable energy over gas, which promised the most efficient route to cutting Australia's carbon footprint.
"Gas offers the cleanest viable source of large-scale baseload and peaking power, yet Australia's tax regime disadvantages gas against coal, while subsidies and renewable energy targets disadvantage gas against renewable energy," APPEA chief Belinda Robinson said.
Ms Robinson said the report showed more thoughtful tax and climate policies were required to ensure the oil and gas industry met its potential to help cut the nation's greenhouse gas emissions.
In particular, the economic and environmental potential of Australia's vast gas reserves was not fully appreciated, she said.
In addition to a "thoughtfully designed national climate change policy", Ms Robinson said Australia also needed improved regulatory efficiency and an internationally competitive fiscal regime to ensure strong future investment in oil and gas development.
According to APPEA's report, Australia's declining levels of oil production and exploration is a major concern.
While Australia enjoyed a trade surplus in oil and liquid fuels as recently as 2000, rising demand and falling production since then meant the nation now faced an annual trade deficit in petroleum products of some $16 billion.
"Without major new discoveries, this will grow to around $30 billion per annum by 2015," Ms Robinson said.
The roport notes that Australia remains underexplored with vast onshore and offshore basins potentially containing significant untapped resources.
However, new incentives were required for Australia to attract exploration investment and ensure its energy security.