CEOs call for energy certainty

January 7th, 2015

Reducing energy costs and ensuring customer access to supply is the number one concern for CEOs going in to 2015, according to a survey by the Australian Financial Review.

CEOs from the finance and manufacturing sectors expressed particular concern about the nation’s international competitiveness, saying that  failure to remove impediments to energy resource development risked Australia losing its competitive edge as global demand grew.

Aurizon chief Lance Hockridge warned of the danger of low-cost and reliable energy delivery being “hijacked by other agendas”.

The CEOs concern is understandable.  It is not hard to see the dagger at the throat of the nation’s energy future – the edges of sluggish policy and aggressive activism sit on the blade of environmental politics.

BHP Billiton chief Andrew Mackenzie summed up what is needed:  Removal of resource development and supply constraints, streamlined approval processes, and a positive environment for infrastructure development.

Ironically for the natural gas industry, at the time Mr Mackenzie and other CEOs say clear and affirmative policy action is needed, State Parliaments are up to their necks in yet more discussion and examination of the issues.  As we’ve previously reported, inquiries are continuing in four States.

While Queensland charges ahead to a much brighter economic future on the back of natural gas development, WA, SA, Victoria and NSW are still working through inquiries.

In NSW, there have already been two Parliamentary inquiries into upstream and downstream issues,  and an 18-month investigation into coal seam gas by the Chief Scientist.  Why the need for more?

There is no doubting the commitment of the WA and SA Governments tocontinuing with their long-established, safe natural gas industries and in expanding them as new opportunities arise in appropriate locations.  The NSW Government is trying to shake off the shackles of inertia caused by political argument and we are waiting to see if the  new Government in Victoria will find its mojo.

All of these Governments want to facilitate the responsible development of energy resources, but they are wary of the electoral impact of the highly emotive arguments mounted by anti-industry activists.  This is the underlying problem.  The intention and attention of  Government is being diverted by minority groups.

To end on a positive note, Incitec Pivot chief executive James Fazzino gets the optimism prize in the AFR survey, saying a win-win is possible:

“In Australia, it’s important that we maximise our competitive advantage in energy,” he says.  ”In relation to gas production and supply, particularly on the east coast, we can have our cake and eat it too – thriving energy exports, vibrant value-adding industry and affordable gas to households.”

 

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