Energy ideas under the burner in Brisbane

Energy industry eyes turn to Brisbane this week where the sector will seek answers from Gary Gray on why developments are being burdened by government.

Energy issues have sometimes been a sideshow in federal elections over the past 20-30 years, but not in 2013.

This time they are front and centre of the debate, with the election falling just as millions of households and small businesses are starting to receive their (higher) electricity and gas bills at the end of winter.

Which is why there will be quite a lot of political interest in the 2013 Australian Petroleum Production and Exploration Association conference taking place in Brisbane at the end of the month.

There’s no doubting the continuing pulling power of this event: with a week to go, it has attracted 3000 delegates from 30 countries and 850 companies – plus 200 service and supply companies and agencies to the Brisbane Convention Centre. 

And some 50 journalists will be on hand over three days to convey the debate to national newspaper, radio and television audiences.

As well as feisty APPEA chairman and Santos managing director David Knox, the opening morning has the federal government and Coalition energy spokesmen going head to head.

New federal Minister for Resources and Energy Gary Gray worked as a Woodside executive for a time, and the Coalition’s energy spokesman, Ian Macfarlane, was the last holder of the portfolio in the Howard government.

The Tuesday plenary session kicks off with a presentation from New South Wales Resources and Energy Minister Chris Hartcher, whose government is wallowing in a swamp of problems relating to development of coal seam gas in the state as existing conventional gas contracts from interstate start to roll off, rural and green activist opposition to CSG development continues at a high pace and the first of what is expected to be a series of gas price hikes is set to be introduced by the state regulator.

Meanwhile, on the final day, proceedings start with a presentation from Queensland Deputy Premier Jeff Seeney, whose government is wrestling with rolling issues related to the major CSG-fuelled LNG export projects at Gladstone while also dealing with ongoing power pricing pressures: the state regulator proposes to increase electricity bills by a whopping 21 per cent for 2013-14.

The Brisbane conference is ideally placed for the upstream petroleum industry to ram home messages between last week’s federal budget and the forthcoming election.

APPEA’s media statement reacting to the budget Wayne Swan delivered on Tuesday took this route.

The oil and gas industry, pointed out association chief executive David Byers, is responsible for more than 30 cents of every dollar of national private sector investment at present, highlighting the expectation of Treasury in the budget papers “a substantial pick-up in LNG exports in the second half of the decade will support economic growth for years to come”.

The contribution, APPEA adds, includes up to $12 billion a year in tax revenue to Australian governments by 2025 if all the proposed developments go ahead.

This being the case, the association wants to know, why is the Gillard government pursuing “short-sighted” measures hampering gas developments by increasing the industry’s development costs?

The sector, says Byers, “faces challenges in competing in both the domestic and global markets” and decisions to put “further lead in the industry’s saddle-bags” will erode investor confidence.

This is a theme the association and its members can be expected to pursue allegro con brio (“fast and with spirit”) at the Brisbane conference.

They will not be dealing with a shrinking violet in Gary Gray, new to the portfolio but not the business.

Gray, who was national secretary of the Labor Party when Paul Keating was prime minister, spent six years as director of corporate affairs at Woodside before going back to Canberra as the Member for Brand on the winning side in the 2007 election.

I have been reading a speech he made in Houston in mid-April – the week of the Boston marathon bombings, which swept all else from media coverage – and he had some straightforward advice for the petroleum industry.

(The event was the Global LNG Conference, which will next be held in Perth in 2016.)

You may excel in technical areas, Gray told the LNG companies, but there is a need for better focus on areas such as community engagement, especially when activists are “about spreading fear and confusion”.

His message – likely to be repeated in Brisbane, I imagine – is that the industry has to take a stronger role in “the community politics of energy” and to “stand aside from commercial rivalties (to pursue) the common good”.

Gray said in Houston that “without industry getting this message, fewer and fewer politicians like me will be able to prosecute sensible, logical, science-based policy and sustainable regulatory solutions”.

Given just how cross APPEA and its CSG sector members are about the politically-motivated intervention of Gray’s colleague, Environment Minister Tony Burke, in amending the Environmental Protection and Biodiversity Act ahead of the election to stymie NSW gas development, it will be interesting, shall we say, to see how this sentiment will go down with the Brisbane audience.

In Houston, Gray declared that he “stood in awe” of the intellectual capacity of the oil and gas industry – the engineering, commercial, financial and management skills – and of the excitement it generates.

“You make our world go round,” he told the LNG-ers,” and you make it go round safely and sustainably.”

This month, speaking in Adelaide at a resources and energy conference, he took the point a little further, telling the sector its contribution “is genuinely a sustainable contribution to our society” which can’t be achieved without “productive processing, a vibrant exploration environment and opportunities for global marketing.”

That’s not what Lock the Gate and its ilk, nor the federal government’s Green and independent props in parliament, think or want to hear.

How it will all go down in Brisbane at APPEA, given all the other stuff the federal government has been pursuing, will be fascinating to observe.

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