Queensland gas moves get thumbs up

APPEA’s Queensland director, Matthew Paull, said the A$18 million (US$14.6 million) investment outlined in the budget for the Greenfields 2020 program to increase exploration was particularly welcome and showed the government was “committed to long-term economic and energy security”.

“This initiative will assist the industry to undertake greenfield exploration and reduce associated risks,” Paull said.

“We know that Queensland is endowed with abundant conventional and unconventional gas reserves and this initiative will further our understanding, access, and supply for both domestic and export markets.”

APPEA said proposed liquefied natural gas projects in Queensland were expected to generate more than A$40 billion in capital expenditure, create 18,000 direct and indirect jobs, and more than A$850 million in state government revenue.

In his budget, Fraser set aside A$14.6 million to increase the number of petroleum and gas inspectors, a move APPEA said would provide assurances to the community that the industry was acting responsibly.

Brisbane also committed A$12.5 million over four years to help further streamline regulatory approvals processes and will spend A$10.7 million to upgrade the state's tenure management system.

APPEA added these were welcome initiatives that demonstrated the Bligh government understood the challenges facing the rapidly growing gas sector in Queensland.

“The continued development of the Queensland gas industry will help further secure eastern Australia’s energy supply and bring significant economic benefit to Queensland via the creation of thousands of new jobs, particularly in regional Queensland,” APPEA said in a statement.

However uncertainty still faces the states mining sector over the federal government's proposed RSPT.

While the RSPT will not have a direct impact on the Queensland budget, the Treasury budget papers warned it could hit the state's finances in the long term.

“In relation to the RSPT, it is appropriate that the Australian people, as owners of finite

mineral and petroleum resources, should receive a fair return from their extraction,” budget papers stated.

“At the same time it is important that the parameters of the new tax, in particular the

allowance rate, are set so that current production and planned and new investment in the mining industry are not deterred.”

The budget papers called upon the federal government to consult with the industry and other stakeholders, to quickly settle the major design features of the tax in order to provide investment certainty and business confidence in the industry.

It highlighted several large-scale resource projects in Queensland were in planning stages or scheduled to commence over the budget outlook period but given uncertainties around external conditions, proposed changes to the taxation of the mining industry as well as a delay in emissions trading scheme implementation, the timing of these projects may differ from what was currently assumed.

The federal government's 40% RSPT has led to a number of companies, including oil and gas producers such as BHP Billiton and Santos, to consider pulling billions of dollars in investment.

Opposition leader Tony Abbott has promised to overturn the tax if he wins office. Australia faces a federal election later this year.

Tuesday 8 June 2010
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