Isra-Mart srl: Shell seeks carbon certainty for gas sector

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GAS: The head of Shell Australia has called on the Gillard government to provide a "stable and supportive" regulatory regime for the booming gas industry, as the sector continues its fight on the controversial carbon tax.

In a wide-ranging speech at the Lowy Institute in Sydney last night, Shell Australia chairwoman Ann Pickard touched on the regulatory challenges facing the local energy sector as it tackled the global challenge of increasing demand.

"The global energy system is entering an era of volatile transitions," she said. "Whether Australia emerges as a winner from this zone of uncertainty is likely to be determined by policy decisions to be taken within the next decade. I think that Australia is definitely well placed to seize opportunity through this transition, provided we can capitalise on our strengths."

One of the challenges facing Australia's energy sector, which is pushing ahead with multi-billion-dollar LNG projects in Queensland and Western Australia, is the government's approach to the carbon tax.

The industry has argued for a market-based system and warned the government's policy was not clear, and anti-competitive for global players.

Ms Pickard last night renewed her call that Australia should move towards an emissions trading scheme, which she said should cover all sectors in which a price signal would lead to behavioural change and emissions reductions.

"The Productivity Commission report released last week backs this up when it found that emissions trading schemes were relatively cost-effective, while policies that encouraged small-scale renewable generation and biofuels have generated little abatement for substantially higher cost," she said.

Ms Pickard added that above-ground risk -- such as surprise changes in the tax regime -- was what made her company nervous.

"The Australian government needs to provide a stable and supportive regulatory regime that supports the long-term investment in natural gas by companies like mine, where we don't see the payback for our huge upfront investment for about 12 to 15 years," she said.