SIX groups looking to pioneer an Australian gas-to-liquids industry are poised to get a much better idea of the climate in which they may be operating.
SIX groups looking to pioneer an Australian gas-to-liquids industry are poised to get a much better idea of the climate in which they may be operating.
While land has been allocated to five of these groups on the Burrup Peninsula, we’re not talking high temperatures or cyclones, or even industrial relations.
What these groups are eagerly awaiting is the final report of the Commonwealth–State GTL Task-force, set up in 2001 under the direction of Invest Australia to recommend an appropriate policy framework.
Long and short-term investment strategies to build the industry from the current virtual village are hanging off these potential policies, including infrastructure considerations, depreciation rates, product taxes and fuel concessions.
The taskforce produced a discussion paper, but the most recent indication of the Federal Government’s thinking may have come from Invest Australia executive general manager Barry Jones.
At a recent conference in Perth, Mr Jones said the Government knew gas availability was not a problem, but recognised that producing it at a competitive price was.
In addition, the retail prices that could be achieved, and hence the potential markets for GTL products, were dependent on oil prices, and assumptions about these would
be critically important in the Government’s assessment of a GTL industry.
A rise in the price of oil would mean cheaper GTL prices, but as increased oil prices were not good economically for Australia, more analysis of sensitivity and balance issues was essential.
The Government was not only considering the national net economic benefits of a GTL industry in this light, but also comparing general equilibrium modelling processes when looking at the benefits presented by the proponents of projects.
All the models had limitations, Mr Jones said, and comparing benefits across projects and industries was not easy when different models produced different conclusions.
Project benefits would be assessed against a considerable list of out-comes and impacts, including Australia’s declining petroleum self-sufficiency, domestic fuel consumption, potential GDP increase, exports, employment, regional development stimulus and exploration and production incentives.
While happy to expand on some of these issues, Mr Jones could not give much away about matters of more immediate concern for companies wanting to advance their decision making.
These matters include the proposed fiscal regime, infrastructure issues, how a competitive gas market would be fostered, and concessions for alternative and clean fuels.
However Mr Jones was keen to emphasise the Government viewed as priorities its role in developing technical capacity in this industry, ensuring Australia was competitive for major GTL investment, monetising undeveloped natural gas resources and diversifying transport fuel options.
Moreover, he stressed the Government already was working on these issues.
A “high-level” committee had been formed in October last year to advise on multi-user infrastructure needs and private sector provision options, and to present a rationale for any government infrastructure assistance.
Less reassuring to the industry, however, was the Government’s view that it respected the scope of the Australian Tax Office’s task in determining the values of assets across industries, suggesting there could be a considerably longer wait for an effective life-of-assets solution than for clarification of all other issues.
While willing to work with State Governments in providing research and development support, the Federal Government also was considering a greater role for the CSIRO and Cooperative Research Centres in developing and supporting national technical capacity for the industry.
The Government may be saying it knows all the issues, but so does the industry, with little surprise coming from an ACIL Consulting survey of 15 GTL stakeholders last month.
Respondents identified gas price, assured supply, infrastructure and taxation as the key economic viability factors most likely to influence potential development of the industry in Australia.
They were clear on combined and separate State and Federal government responsibilities to foster the development of an Australian GTL industry and viewed the work of the Taskforce, the Federal Government’s Invest Australia and the WA Department of Mineral Petroleum Resources positively.
The Federal Government’s Strategic Investment Coordination process, from which two project proponents – Syntroleum and Methanex – are to benefit with a combined $155 million, was supported, but also described as insufficiently transparent.
An additional concern was the need for a comprehensive national energy policy that would include a GTL industry.
But while respondents were keen to see Australia become the industry’s world leader, they warned any opportunity to do so would not be around for long.
Infrastructure, tax and approvals process issues surrounding a potential GTL industry in Australia exemplified wider national and State policy needs across the oil and gas and infrastructure sectors, ACIL Consulting manager WA and NT Ian Satchwell said.
In tackling the critical issues raised, governments would do well not to restrict their action to GTL-specific matters, Mr Satchwell said.
While land has been allocated to five of these groups on the Burrup Peninsula, we’re not talking high temperatures or cyclones, or even industrial relations.
What these groups are eagerly awaiting is the final report of the Commonwealth–State GTL Task-force, set up in 2001 under the direction of Invest Australia to recommend an appropriate policy framework.
Long and short-term investment strategies to build the industry from the current virtual village are hanging off these potential policies, including infrastructure considerations, depreciation rates, product taxes and fuel concessions.
The taskforce produced a discussion paper, but the most recent indication of the Federal Government’s thinking may have come from Invest Australia executive general manager Barry Jones.
At a recent conference in Perth, Mr Jones said the Government knew gas availability was not a problem, but recognised that producing it at a competitive price was.
In addition, the retail prices that could be achieved, and hence the potential markets for GTL products, were dependent on oil prices, and assumptions about these would
be critically important in the Government’s assessment of a GTL industry.
A rise in the price of oil would mean cheaper GTL prices, but as increased oil prices were not good economically for Australia, more analysis of sensitivity and balance issues was essential.
The Government was not only considering the national net economic benefits of a GTL industry in this light, but also comparing general equilibrium modelling processes when looking at the benefits presented by the proponents of projects.
All the models had limitations, Mr Jones said, and comparing benefits across projects and industries was not easy when different models produced different conclusions.
Project benefits would be assessed against a considerable list of out-comes and impacts, including Australia’s declining petroleum self-sufficiency, domestic fuel consumption, potential GDP increase, exports, employment, regional development stimulus and exploration and production incentives.
While happy to expand on some of these issues, Mr Jones could not give much away about matters of more immediate concern for companies wanting to advance their decision making.
These matters include the proposed fiscal regime, infrastructure issues, how a competitive gas market would be fostered, and concessions for alternative and clean fuels.
However Mr Jones was keen to emphasise the Government viewed as priorities its role in developing technical capacity in this industry, ensuring Australia was competitive for major GTL investment, monetising undeveloped natural gas resources and diversifying transport fuel options.
Moreover, he stressed the Government already was working on these issues.
A “high-level” committee had been formed in October last year to advise on multi-user infrastructure needs and private sector provision options, and to present a rationale for any government infrastructure assistance.
Less reassuring to the industry, however, was the Government’s view that it respected the scope of the Australian Tax Office’s task in determining the values of assets across industries, suggesting there could be a considerably longer wait for an effective life-of-assets solution than for clarification of all other issues.
While willing to work with State Governments in providing research and development support, the Federal Government also was considering a greater role for the CSIRO and Cooperative Research Centres in developing and supporting national technical capacity for the industry.
The Government may be saying it knows all the issues, but so does the industry, with little surprise coming from an ACIL Consulting survey of 15 GTL stakeholders last month.
Respondents identified gas price, assured supply, infrastructure and taxation as the key economic viability factors most likely to influence potential development of the industry in Australia.
They were clear on combined and separate State and Federal government responsibilities to foster the development of an Australian GTL industry and viewed the work of the Taskforce, the Federal Government’s Invest Australia and the WA Department of Mineral Petroleum Resources positively.
The Federal Government’s Strategic Investment Coordination process, from which two project proponents – Syntroleum and Methanex – are to benefit with a combined $155 million, was supported, but also described as insufficiently transparent.
An additional concern was the need for a comprehensive national energy policy that would include a GTL industry.
But while respondents were keen to see Australia become the industry’s world leader, they warned any opportunity to do so would not be around for long.
Infrastructure, tax and approvals process issues surrounding a potential GTL industry in Australia exemplified wider national and State policy needs across the oil and gas and infrastructure sectors, ACIL Consulting manager WA and NT Ian Satchwell said.
In tackling the critical issues raised, governments would do well not to restrict their action to GTL-specific matters, Mr Satchwell said.
