CEO Message May 2021
May is a key month in the annual political and policy cycle, with the federal government delivering its budget on the second Tuesday of the month. In Australia, the federal Budget is the closest thing we have to the US State of the Union address, with the Australian government setting out its achievements and priorities. The next election needs to be held by May 2022 so this year’s budget will also put the government on an election footing – making it a big spending one.
I recently invited members representatives to have a chat with me on Zoom. With events still being cancelled from time to time, this is one way to keep up with members interests and with what’s happening in the industry. If you are interested in a chat, please email me.
Government investment in hydrogen and CCS
In the last week of April, the government made one of the first Budget spending announcements: a commitment of more than $700 million to funds supporting hydrogen and CCS development, which is fantastic news for the pipeline and gas industries. As we all know, it is the skills and expertise of the people and companies in our industries that will enable hydrogen, CCS and other renewable gas technologies and projects to go ahead and there is a lot to be excited about.
Government investment in power generation
The potential for the government to build a gas power generator (GPG) in NSW as part of its gas fired recovery package, and in response to planned coal generator closures, has received plenty of media attention. Shortly after the 30 April deadline for industry solutions, Energy Australia announced an expansion of its Tallawarra power station with a gas power generator supported by hydrogen. This is a great result for GPG and hydrogen and I hope to see more announcements like this.
I occasionally get asked for APGA’s view of the government-funded GPG project in NSW. On the one hand, I think it is great that governments see the need for GPG and understand its importance and we should do everything we can to support governments to get relevant messages to the public. On the other hand, I find it very difficult to support direct government intervention in the energy market. If governments deem public investment in power generation is necessary, best practice would be to use a transparent and competitive process to identify optimal projects that could be delivered through public support of private investment. That said, the energy space has been very challenging for Federal, State and Territory ministers for the best part of a decade now and it is pretty easy, and risk free, to commentate from the sidelines.
In pipeline specific policy news, the regulatory review of pipelines has progressed, with the Decision Regulation Impact Statement released on Monday 3 May. There is much to digest in the more than 200 page document so we are still working through the detail but, overall, the move is to a stricter regulatory regime with more oversight from the Australian Energy Regulator. On the surface this is a significant increase in regulatory intervention. In practice, I am not sure there will be huge difference in outcomes for customers or pipeline companies (other than an increased administrative burden for the latter).
The energy investment environment is rapidly changing – driven by both external and internal factors. The pipeline industry itself has undergone great cultural change in the past five or six years, with pipeline companies putting much greater focus on customers, helping them address gas price challenges and leading the establishment of the Energy Charter. Externally, increasing price competition from renewable electricity is front and centre in energy supply decision-making and will ensure energy customers get competitively priced energy from all sources of supply.
APGA is working on a new series of fact sheets covering the complexity of the energy industry and the changes it is going through, including those above. Our focus will be, unsurprisingly, on promoting the role and advantages of gas infrastructure, natural gas and future fuels in a number of areas. We know there are many members interested in helping the industry better promote and talk about itself and we invite members to get involved in developing the fact sheets. This can range from taking on a topic to simply emailing us with an interesting fact you wish more people knew about gas, pipelines or the industry. APGA National Policy Manager Jordan McCollum is leading this work so please email him if you’d like to be involved.
After almost three years as the Chair of the Environment subcommittee, Sean Helbig has stepped down to focus on his day job at APA Group. Sean has driven a lot of activity through the subcommittee, including establishing it in the first place, and we very grateful for the contribution he has made to the industry through this work. In particular, Sean was instrumental in the last review of APGA’s Code of Environmental Practice and oversaw the development of our Biodiversity Offset Guideline. Sean assures us he will continue to be involved but, for now, I would like to thank him for all he has done in recent years on this critical subject.
Our new Chair is Matt McDermott from CNC Project Management and I’d like to thank him for stepping up to the task! Environment and sustainability issues are front and centre for all companies these days and APGA members are no exception, so I am sure there will be much to contemplate in the future. The next three yearly review of the CoEP in now due. The CoEP has allowed industry’s risk-based approach to environmental management to be the standard practice and it is referenced in some way by environmental regulators around the country. If you’d like to participate in the next review, please email Peter Heffernan and we’ll get you involved.
We’ll also be holding the next Environment Subcommittee meeting in early July so please let Peter Heffernan know if you’d like to be involved in the Committee.
New strategic plan
APGA’s next three-year strategic plan is due to begin on 1 July 2021 and the Board and the secretariat are very close to finalising its key elements including KPIs and the annual business plan that will deliver its strategies. The plan will have a new focus on social responsibility and we are keen to hear from members what kind of services you think APGA could provide to the industry in this space. Call or email whoever you are comfortable talking to about this, I am definitely keen to hear directly from members so you can start with me if you like.
Annual Convention and Exhibition
We are busy continuing preparations for this year’s Annual Convention and Exhibition in Brisbane at the end of September. We are about to release the speaker program and are really pleased with the sessions we are able to offer attendees. It wouldn’t be a monthly message without mentioning COVID-19, (but I am pleased to wait till the end this time) so it is worth noting the Board has considered the risk of last-minute cancellation due to a lockdown in Brisbane. It is not something we can avoid or fully mitigate, but we do want to assure members that we have the COVID-19 Convention cancellation policy under constant review in order to minimise loss to delegates in the event of a lock-down in Brisbane.
All the best,