Gas and pipelines were some of the big winners to come out of the recent “gas-friendly” federal budget with several measures proposed both to increase the amount of domestic gas available and improve its distribution nationally.
The Government has allocated $5.2 million to a cost-benefit analysis study into the construction of gas pipelines from the Northern Territory and Western Australia to the east coast, through the Moomba hub in South Australia.
“The pipeline linking WA with the Eastern states could open WA gas producers to a bigger market providing welcome growth opportunities. However, it would also expose them to more competition and place downward pressure on prices. This will be good news for consumers but may be a challenge to producers with projects already over budget,” said Dr. Tom Houghton, Senior Lecturer at the Curtin Graduate School of Business.
As part of a package of about $90 million, the Government will commit $28.7 million over four years from 2017-18 to encourage and accelerate the responsible development of onshore gas for the domestic market. Similarly, proposals to expedite the development of unconventional gas including resources promises to be to the benefit of WA shale producers.
Referring to the $19.6 million over four years allotted to the Gas Market Reform Group, Dr Houghton said that efforts to improve gas market transparency would likely be welcomed by the industry.
"However, the proposal seems to be at odds with a general move to more regulation and stronger government intervention to control prices in the gas market.
“That said, WA gas producers already have considerable experience of working with the gas reservation policy now in its tenth year and may make them better equipped in the face of more regulation to emerge at the federal level," continued Dr Houghton.
The group has been charged to better facilitate gas trading, encourage greater competition to place downward pressure on prices and ensure gas markets are most transparent and accountable.
The other critical energy statements related to renewable energy with the government placing some important bets on renewable forms of energy with lower intermittency than solar PV and wind.
“An upgrade of the Snowy Hydro scheme incorporating pumped storage capacity would seem to be a positive development and support to build a solar thermal plant should provide Australia with significant operating experience in a promising new technology. None of this will have a direct impact on WA, but a successful experience with solar thermal in SA might lead to similar developments in the West,” summarised the Senior Lecturer at the Curtin Graduate School of Business.
Friday 9th June 2017