Gas reservation policy unworkable: gas executive

Chris Ohlrich, chief commercial officer, Australia, for Dart Energy, has criticised requests for a gas reservation policy.

Ohlrich, writing in today’s The Australian, claims that a proposal for gas reservations by Incitec Pivot’s James Fazzino would be a negative for the east coast’s gas exploration, and is based on a misunderstanding of “the dynamics of the Australian gas industry”.

The Dart Energy representative writes that cheaper conventional gas sources are in decline, with future supplies to rely more heavily on coal seam and shale gas, which will be more expensive to access.

He argues that a domestic gas reservation policy would discourage investment in “expensive, high-risk exploration” in CSG and shale gas.

“In other words, the very gas being sought by industry would never get to market and prices for the smaller supply that is available would be even higher,” states Ohlrich.

“To jeopardise its development and all the associated benefits to the economy and the environment through a policy of protectionism of the manufacturing sector would be a major mistake.”

A reservation policy was one of the rejected proposals by the recent report by the non-government members of the Prime Minister’s Manufacturing Taskforce. Others, such as the Australian Workers Union (through its Aluminium Industry Plan) have made similar proposals.