Gas is experiencing an unprecedented growth period and will continue to play a significant role in meeting growing global energy demand, Santos - Gladstone LNG Project, President, Mark Macfarlane told a recent CEDA audience in Brisbane.
"The International Energy Agency predicts that gas will overtake coal by 2030 to meet one quarter of the world's energy demand. By 2035 it will be within striking distance of oil," he said.
"Total world electricity demand is expected to increase by 70 per cent by 2035.
"It will be gas, more than any other source of fuel that will be meeting this demand.
"Over the next 20 years we will see a near doubling of the gas-fired electricity generation well ahead of growth in any of the other fossil fuels or renewables."
Australia is currently the fifth largest LNG exporter, and will be number one by 2020, with the state of Queensland expected to become a global energy exporter, he said.
"By 2018 Queensland alone will rank as the third largest LNG exporter in the world alongside Algeria and Malaysia."
"We expect an increase in Queensland's gross state product of $427b from now until the period to 2035."
"Over that same period we expect the Queensland government to receive $286b in revenue from the LNG revenue.
"By 2020 Australia's combined domestic and export demand is expected to double to around 4 trillion cubic feet a year, (but) we can't take our current strong position as an LNG supplier for granted," he said.
"We are only one of the potential suppliers to Asia-Pacific markets.
"Australia needs to maintain its international competitiveness to ensure that these long term projects remain economic. We also need to continue to attract investment.
"Unnecessary delays due to complex regulatory and approval processes, increased costs through regulatory burden as well as non market-based constraints will create opportunities for alternative suppliers."
TRUenergy, Managing Director, Richard McIndoe said the industry needs deregulation to ensure greater investor confidence and to allow consumers to modify their behaviour of peak demand periods.
Mr McIndoe said the industry's productivity issues can be partly explained by investment into moving from base load to higher peaking production. Peaking production is more expensive because it is only turned on to manage peaks in energy demand for a short period of time, he said.
"Retail electricity pricing and adapting electricity retail pricing to meet these changing habits is one way of changing behaviours and being more productive for the economy as a whole," he said.
Smart Meters introduced in Victoria he said were "an extremely effective way of enabling people to understand their consumption patterns and to move their consumption to lower priced periods."
"Time of day pricing and time of day usage will allow consumers, both domestic and commercial consumers, to adapt their behaviour by spreading their usage over a broader period and reducing overall peak demand, which will allow the industry to invest more efficiently," he said.
"There is a significant resistance across the marketplace to retail price deregulation, and this runs completely counter to the way the industry needs to go.
"Retail price deregulation is critical for attracting investment in the sector. It ensures that prices are market responsive, and it gives very strong price signals to new investors and new developers of generation to come to the marketplace.
"If we have a domestic gas reservation policy here you won't get the right signals for new investment and new generation to come into the market and therefore you run the potential of energy security risk going forward.
"The government needs to work with industry to ensure the development of domestic gas here in Queensland and New South Wales, so that we don't have a gas shortage and an energy shortage in 2015."
Bureau Resources and Energy Economics (BREE), Executive Director and Chief Economist, Professor Quentin Grafton said: "It's hard to predict where gas prices are going, not only in a domestic sense but also globally...because essentially there have been very rapid developments, particularly in unconventional gas."
Professor Grafton said that Qatar and west Africa were Australia's global LNG competitors. He also said north America also has particular implications for the Asia-Pacific market with exports from North America likely to happen in the near future.
There is currently large price parity between the Asia-Pacific gas price and the US Henry Hub, but this should decrease in the future as exports come through from Canada and the US, in the not so distant future, with pending regulatory approvals and the Panama Canal expansion, he said.
"The Asia-Pacific gas prices will ultimately have an impact on the prices that we'll be paying for gas here in Australia," he said.
Media coverage included:
Mark Macfarlane and Richard McIndoe's calls for gas sector regulatory reform, at the CEDA Energy outlook: future for gas event in Brisbane, were reported in The Financial Reivew, The Australian, The Courier Mail on 20 April 2012 and The Daily Telegraph on 19 April 2012.