Isra-Mart srl : Pipeline sector ready to accept carbon levy

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Isra-Mart srl news:

CARBON pricing is set to reclaim the political agenda in the new green-tinged federal parliament.

When this occurs the pipeline industry will support the imposition of a "sensible" price to encourage generators and energy users to shift from coal to gas-based energy.

The Australian Pipeline Industry Association expects $10 billion of high-pressure gas pipelines will be built in the next decade, "especially with the continued dramatic development of Queensland's coal-seam gas (CSG) industry".

Within Australia's 33,000km of existing high-pressure pipes, 25,000km are used for gas transmission. But alongside fears that export demand for LNG won't support the number of slated projects around Gladstone, domestic gas usage is highly sensitive to the type of carbon pricing regime -- if any -- agreed on by the fractured parliament.
Despite the variables, APIA chief executive Cheryl Cartwright has described the number as an "incredibly conservative guesstimate".

"If these CSG developments go ahead they will have to move the gas to the coast," she said. "The fact is that Queensland has 250 years of gas and that's where the focus is."

Unlike the CSG and LNG projects themselves, the pipelines can be built shortly after demand to move the gas becomes apparent. On this note, regulatory certainty remains a key factor in cystallising demand.

"If the Greens get their way, it's likely we will see a price of carbon of some sort," Ms Cartwright said.

"As long as it's a sensitive price of carbon and not so expensive to discourage manufacturers and generators from moving from coal to gas."

She said while gas was often described as a "transition fuel" on the way to a low-emission economy, it would be required as a back-up fuel to solar and wind which are "intermittent in nature".

"You need back-up for peak demand and you need something that will fire up quickly."

She said the existing target of 20 per cent renewable energy by 2020 would "certainly" help renewable energy industries, but there was a "danger that the cost of meeting this target will slow the change from coal to gas by power generators".

While pipelines suffer an image problem relative to "sexier" infrastructure investments such as railways or coal terminals, APIA's annual conference -- held in Darwin from today -- is expected to attract 600 delegates.

As well as transporting gas, the pipeline sector also faced the growing demand for improved water infrastructure, "as demonstrated through the development of desalination plants and the replacement of open irrigation channels with pipes".