Budget ramps up support for gas development

May 11th, 2017

Measures outlined in this year’s Federal Budget reaffirm the Government’s commitment to securing an energy future for Australia – and that onshore gas is a key driver to that outcome.

Among the initiatives from the Federal Government include:

  • $30.4 million over four years from 2017-18 to undertake scientific assessments on three prospective onshore unconventional gas sites to identify the potential impacts on water resources and other environmental assets;
  • $28.7 million over four years from 2017-18 to encourage and accelerate the responsible development of onshore gas for the domestic market; and
  • $19.6 million over four years from 2017-18 for the Gas Market Reform Group to accelerate reforms agreed by the COAG Energy Council to improve gas market efficiency and transparency.

The allocated funds send a strong message that the Government growing tiresome of States and Territories restricting supply. The impacts plaguing gas users are quickly being realised – and the effects are very real for some businesses.

And the concerns are not limited to the cost of energy but the security of Australian jobs.

In addition, the Government’s commitment to funding studies into water resources and other environmental assets is another positive step to reassuring communities that natural gas can be extracted safely.

Federal Minister for Environment and Energy Josh Frydenberg said: “Over the next three years the expanded program will examine new gas reserves and provide independent scientific advice to governments, landowners and the community, business and investors on future secure and reliable gas supply. “

The recognition in the Budget that State and Territory moratoriums on onshore gas are hindering supply suggests the Federal Government will seek to intervene at a State-level – with statements that funding will be subject to the removal of regulatory restrictions.

Minister for Resources and Northern Australia Senator Matt Canavan said a $28.68 million East Coast gas development program would target faster development of onshore gas fields to meet Australian demand, while also focussing on a fair return to landholders.

“It will help secure the domestic gas market against possible supply shortfalls in coming years, and enable large gas intensive consumers to secure supplies on more acceptable commercial terms ,” Minister Canavan said.

“This new program will support projects that provide gas to domestic users and activities that accelerate gas supply from significant resources.

“Funding will be subject to the removal of regulatory restrictions, like moratoria on onshore conventional gas developments.

“Victoria has a blanket ban in place and the Northern Territory has a moratorium in place that are preventing any onshore gas development, despite preliminary assessments that both regions have substantial gas reserves.

Minister Canavan said the initiative would be complemented by appropriate community and landowner acceptance provisions, the development of transparent land access arrangements and an appropriate communication and education package for landowners, communities and industry.

And rightly so. Landowner and community rights are an important factor in developing any natural resource – and in many situations, education and transparency are what foster coexistence in areas of development.

The Government’s package of energy support measures is a welcome step towards maintaining a secure, reliable and competitive energy system into the future – and we the Government can expect to be commended for taking a proactive approach to safely developing Australian natural gas resources.

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