Australian industry body welcomes new PM

Malcolm Turnbull
Source: WikiCommons, author: Jillianblackall

The Australian Petroleum Production and Exploration Association’s (APPEA) chief executive, Malcolm Roberts said that the oil and gas industry is looking forward to working with the country’s newly-elected 29th Prime Minister, Malcolm Turnbull.

“The Prime Minister has spoken of seizing the opportunities from technological and other changes sweeping global markets, (…)  The liquefied natural gas (LNG) industry is doing just that. Australia is leading the world in producing LNG from coal seam gas and will pioneer the use of floating LNG platforms to tap offshore gas reserves. (…) The LNG industry is striving to reduce costs to stay competitive in a crowded global market,” Roberts said.

Malcolm Roberts also called for a regulatory reform that could “make a significant contribution to ensuring Australia stays competitive and attracts investments.”

One of the APPEA’s areas of interest is shale gas. A recent report, commissioned by the APPEA and produced by Deloitte Access Economics (DAE) found that the development of shale and tight gas resources in Australia’s Northern Territory (NT) could generate up to A$1bn per year of state revenue and create an employment boost of 6,300 jobs over a 20 year period.

Commenting on the report’s findings, Mr Roberts said at the time: “The Territory economy is already outperforming much of the nation thanks to the development of the Ichthys liquefied natural gas project in Darwin and investment in other natural gas projects.”

“While still in its very early stages, shale gas could underpin a new wave of investment delivering jobs and economic opportunities for decades to come.”

“The return to the community from developing our natural resources is huge and the Commonwealth will be pivotal to capturing the opportunities ahead,” Mr Roberts added on Monday.

However, it’s not all smooth sailing for Australian shale. The production of natural gas from shale and tight rock is still in the early stages in Australia. At the moment, it is likely to take between five and ten years for significant commercial projects to get under-way. The currently low crude oil prices don’t make the situation any easier either. In the last year, three major oil and gas companies: ConocoPhillips, PetroChina, and Chevron exited Australian shales quoting difficult financial climate and disappointing results.

To compound these problems, there are also calls for a fracking moratorium from those who would rather see shale gas remain in the ground.

The APPEA expressed concern that the proposed moratorium on hydraulic fracturing in the Northern Territory (NT) has no basis in science and ignore the industry’s strong safety record. Quoting the above-mentioned study by Deloitte, APPEA NT Director Steven Gerhardy said a moratorium would prevent the exploration activity needed to develop a successful shale gas industry with all its stated benefits to the NT communities.

“Shale gas has the potential to become an important new industry for the Territory, delivering jobs, economic growth and much-needed government revenues to fund new and improved infrastructure and services for the community,” Gerhardy said.

“The Deloitte study found that shale gas has the potential to be the second or third largest private sector employer in the NT creating long-term, high-paying jobs well into the future. “Increasing onshore gas production would also generate increased royalties and business opportunities for indigenous communities,” he said.

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