Pipeline construction

A pro-investment regulatory framework is key

A pro-investment regulatory framework should be a key element of the federal government’s Gas-fired Recovery Plan, APGA said in its submission to the plan.

Pipeline infrastructure provides a cost-effective, safe and reliable means of transmission and distribution for energy and it is built to last.

The federal government has developed the National Gas Infrastructure Plan as part of the gas-fired recovery to encourage private investment in Australia’s energy infrastructure.

While the pipeline industry has a proud history of providing infrastructure to meet the demands of the market, that investment requires a long-term commitment and regulatory uncertainty can undermine that.

“A key factor that should not be overlooked when developing the NGIP is that a pro-investment regulatory framework is required to maximise private investment,” APGA said in its submission.

“If the gas-led recovery is to be driven by private investment it is essential that market signals and regulatory settings are right. It is therefore vital that government recognises the role it plays in ensuring a stable policy environment that encourages rather than hinders investment.”

A new pipeline in and of itself does not produce more gas – it must be supplied with new sources of gas. The timing of gas pipeline infrastructure investment decisions is necessarily dictated by upstream investment in new supply.

“As has always been the case in the past, future gas pipeline capacity needs will be closely aligned with the development of new resource basins as well as import terminals and emerging sources of renewable gases,” the submissions said.

“Gas infrastructure is highly cost-effective, with an estimated 4-to-10 times more energy delivered for equivalent capital spend. The gas transmission and distribution pipeline networks are also a substantial store of energy.

“Finally, gas infrastructure is extremely safe – companies in the Australian natural gas business have an excellent track record when it comes to safety. This is illustrated by the fact there has never been a fatality due to loss of containment on a gas pipeline in Australia. In fact, Australian gas infrastructure has far better safety outcomes than many of its international counterparts, but this is not well known as recent reviews have only focused on comparing prices.

“The combination of competitive pricing, reliability of supply, unique ability to meet specific technical requirements of some manufacturing processes and ability to contribute to the transition to a lower carbon energy system, means that gas will continue to play a pivotal role over the long-term.”

Read the submission.