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APPEA urges Strategic Energy Initiative to get serious about WA energy

The Australian Petroleum Production & Exploration Association (APPEA) has lodged a submission with the Strategic Energy Initiative (SEI) to deliver a policy framework to improve market efficiency for the long-term security of Western Australia’s energy supply.

The policy framework should remove impediments on investment in Western Australia’s energy supplies, APPEA says.

After lodging its submission on the SEI Issues Paper, APPEA said the move to market-reflective gas prices in recent years had triggered an increase in exploration and project development leading to the biggest domestic gas development effort in Western Australia in almost three decades.

APPEA Western Australia director Tom Baddeley said projects being marketed now could increase current gas supply capacity by more than 50 per cent by 2015 but that depended on there being enough customers serious about buying gas at a market reflective price.

“The SEI should therefore support greater market efficiency and not be tempted into an approach that distorts market decision-making and increases risk and uncertainty,” said Baddeley.

“Higher prices are the unavoidable consequence of rising costs but they are also the means by which markets adjust and what they’ve triggered is an investment in more supply, of a scale we haven’t seen for decades.

“The SEI needs to focus on addressing impediments to investment like increasing competition in gas transmission.

“The Dampier to Bunbury Natural Gas Pipeline is in a monopoly position and has no uncontracted transmission capacity and the owner will only expand capacity when it has firm requests sufficient to justify expansion, so that makes it difficult for customers seeking firm gas supply for periods less than 15 years.

“It’s a situation which certainly discourages other parts of the energy supply chain from building spare capacity.”

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