Not even poor old Brian Robins can criticize APA and run his FXJ ACCC/ Rod Sims (Bob Hawke's apparatchik) conspiracy, see below, try as he might, Brian's article is almost favorable. APA is pretty safe when FXJ can't run an argument against APA, see below:
APA Group's Mick McCormack says regulation could force up gas prices, stymie new projects
By Brian Robins
The $9 billion gorilla of Australia's gas sector has launched an attack on the government for pushing a range of policies aimed at boosting industry competition, arguing it could have the perverse effect of forcing up gas prices.
The dominant pipeline owner in the country, APA Group, also said a report by the competition watchdog, which outlines measures to stem surging domestic gas prices, "should be binned"
The Australian Competition and Consumer Commission earlier this year issued the detailed report following an extensive round of industry hearings and discussions.
"Anything they do is not going to impact on the gas market anytime soon," APA chief executive Mick McCormack said. "The entire ACCC report should be binned.
The federal and state energy ministers have established a Gas Market Reform Group headed by Michael Vertigan to "fast-track" the policy changes needed in light of the ACCC inquiry as well as measures proposed by the Australian Energy Markets Commission.
"The ACCC's analysis of the sector is a long, long way from robust," Mr McCormack said on Thursday. "They've been through us like a dose of salts. And they came up with some pretty flimsy [claims], for example of monopoly pricing."
Part of the ACCC's case relies on the argument that once the cost of establishing a new pipeline has been recovered, charges should then decline, arguing the pipeline owners are generating very high returns on their investments by not doing so.
"The present system is allowing [pipeline owners] to charge as if they were greenfield investments well past the time the capital has been repaid," Central Petroleum said in a separate submission to the Vertigan review of the excessive pricing regime.
In its defence, APA said pipeline charges made up less than 10 per cent of the household gas bill. But if pipeline charges were regulated, this could result in gas prices rising in Victoria, for example, as more gas could then flow from Bass Strait to the gas export projects in Queensland.
The launch of these gas export projects has been blamed for pushing domestic gas prices towards global price levels, in some instances rising three-fold over the past few years.
"Our tariffs have stayed absolutely flat in real terms," Mr McCormack said, "notwithstanding a 65 per cent increase in the price of gas since 2002".
"Show me regulation and I will show you zero innovation. I'm not running a charity."
He argued that over the past decade, his company had established gas lines linking Bass Strait with Gladstone, the site of the new gas export projects, which had resulted in significant efficiencies for gas producers and buyers alike.
Measures put forward by the ACCC and the Australian Energy Markets Commission include a wholesale gas market that concentrates trading at two primary trading hubs, a northern hub and a southern hub, the opening up of the pipeline capacity by establishing a wholesale capacity, and studying whether gas pipelines should be subject to price regulation.
www.smh.com.au/business/apa-groups-mick-mccormack-says-regulation-could-force-up-gas-prices-stymie-new-projects-20161019-gs6g1j.html
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