Latest pearls from Mar'n Ferguson courtesy of Energy News...

Latest pearls from Mar'n Ferguson courtesy of Energy News Premium:

"FEDERAL Resources and Energy Minister Martin Ferguson has rejected calls for a domestic gas reservation policy, instead urging the industry and state governments to do more to address supply and pricing concerns.
Ferguson, addressing the Energy Users Association of Australia’s annual conference today, acknowledged the “emerging issue” of tightening domestic gas supply caused by LNG exports.

He said the government’s 2011 energy security assessment found that while there were adequate in-ground gas reserves, the challenge was to extract enough to meet domestic and export demand.

Ferguson claimed the gas industry needed to “be more active in responding to community concerns around the availability of domestic gas on commercial terms”.

“State governments too should seek to remove the barriers to the development of an expanded domestic gas supply,” he said.

“We need to foster investment in supply and to make sure prices are set competitively.”

Ferguson said while regulation of domestic gas markets was “critical”, the federal government believed “in allowing markets to adjust to new dynamics rather than trying to constrain domestic prices or supply through intervention”.

“The Australian government is therefore focused on further developing gas markets through greater transparency, improved trading opportunities and removing impediments to supply,” he said.

The domestic gas supply issue was reignited last week with the release of an Ai Group-sponsored report that forecast east coast gas prices could triple by 2023 because of supply constraints caused by LNG exports.

While not explicitly calling for a gas reservation policy, the report highlighted the negative economic effects of exporting gas.

It said that for each petajoule of gas that headed overseas, $255 million in domestic industrial output would be lost against a $12 million gain through export output.

The Australian Petroleum Production and Exploration Association dismissed aspects of the report as “protectionism dressed up as industry policy” and questioned some of its “heroic assumptions” of future gas use by Australian industry.

Ferguson told the EUAA conference that federal inititaives such as the gas bulletin board and short-term trading market were improving the flexibility and transparency of the domestic gas market.

He said federal and state energy ministers were also considering a gas supply hub trading market, with the first at Wallumbilla in Queensland.

“This will enhance the transparency and reliability of supply by creating a voluntary market that offers a low-cost, flexible method to transfer gas,” he said.

Ferguson also took aim at “selective analysis” from industry groups claiming electricity costs in Australia were comparatively high.

He said analysis by his department showed that “in terms of purchasing power parity Australia's average household electricity prices still sit within the lowest quartile of OECD nations”."

Domgas at oil parity, coming to a gas utility near you soon!

Perhaps he can urge companies to pay MRRT and PRRT while he is at it. And perhaps States should hand over royalties to help out Swanny's budget black hole.