The Federal Government’s Energy White Paper 2012, released in October, sets out the Government’s position on energy policy issues affecting the nation and provides a strategic policy framework for the next decade.
Launched by the Resources Minister Martin Ferguson, the paper presents a strong case for a more efficient regulatory system with a competitive open market approach.
“Positive outcomes can only be assured through policy frameworks that shape effective market outcomes, manage uncertainty and attract investment in energy resources and infrastructure,” Mr Ferguson said at the launch.
Mr Ferguson said the paper “provides assurance that we are heading in the right direction in helping to transform our energy sector.”
The paper makes a number of predictions including that Australia will be the world’s largest exporter of LNG by 2021. The paper also foresees a reduction in Australian oil production and the emergence of Indonesia as the world’s largest producer of thermal coal.
Summarised by sector, the paper made the following evaluations:
The coal sector was described as an ‘integral part of Australia’s economy’ including an estimation that the export of thermal and metallurgical coal will grow to 689 million tonnes a year by the middle of next decade. Black and brown coal production are expected to remain ‘strong’.
The successful commercialisation of carbon capture storage and the development of low-emissions technologies were highlighted as integral to the future viability of the industry.
Transportation is highlighted as one of the biggest challenges facing Australia’s uranium industry. The lack of global shipping routes in Australia was earmarked as an issue of importance. The Government will consider the possibility of opening up new routes on the eastern seaboard to cater to the needs of this rapidly expanding industry.
If new oil deposits are not discovered, the paper expects Australian oil production to decline in the coming years. Any new finds are expected to be deep water. Deep water wells produce lower yields and are more expensive to construct and operate however high oil prices and new production technologies could make these operations viable.
The paper predicts gas production in Australia to triple by 2020, reaching 80 million tonnes per year and injecting $164 billion dollars into the economy. If this target is realised, Australia will become the world’s largest LNG exporter, supplanting countries such as Qatar.
Gas is Australia’s third-largest energy resource with 184 years of gas available at current production rates. 70% of the world’s LNG capacity is currently under construction in Australia.