Adding New Regulation Will Not Encourage Investment in Gas Sector: APPEA

The national interest test on gas exports announced on Wednesday by the Labor Party is poor policy that will discourage rather than stimulate investment in developing Australia’s gas reserves, apex industry body Australian Petroleum Production & Exploration Association (APPEA) said.

In an opinion piece published in Australian Financial Review on Wednesday, Chris Bowen, the shadow Treasurer said Labor would follow the lead of other gas-rich nations, like the US and Canada, and introduce a domestic gas national interest test for new or significantly expanded natural gas export facilities. An independent board, appointed by the Treasurer, would assess the impact a new gas project might have on the national interest. The government would then be able to assess whether any restrictions should be applied to the project, Bowen said.

APPEA CEO Malcolm Roberts there is an urgent need to bring more gas to market to ensure reliable, long-term supply in eastern Australia. The country needs policies that encourage more investment in developing new reserves.

“Adding new regulatory risks does not help, especially at a time of depressed prices. International investors are very sensitive to any changes to sovereign risk in Australia,” he said.

“This is not just a view from the industry.  Every credible, independent review has confirmed that interventionist policies put at risk investment and, over time, threaten supply.”

Roberts said it was disappointing Labor had bowed to union demands to introduce a policy that could penalise one of the nation’s most successful export industries.

“The premise of a national interest test is wrong,” he said. “An export gas industry does not threaten domestic gas supply.  Our major gas exporters are also major suppliers to the domestic market.

Australia goes to poll on July 2. Prime Minister Malcolm Turnbull will be taking on union-backed Labor leader Bill Shorten.