The conference was the largest to date, with approximately 2,500 attendees discussing the pertinent issues facing the upstream petroleum industry, exhibiting their wares and achievements and celebrating the industry’s successes.

In the spotlight were the fundamental shifts occurring in international petroleum supply and demand patterns. With world energy demand expected to grow by 40 per cent by 2030, APPEA Chairman Colin Beckett flagged gas as the resource that will take Australia into the future.

“Environmental awareness is increasing along with a greater recognition of the role natural gas can play as a clean ‘blue’ fuel in reducing or offsetting greenhouse gas emissions,” Mr Beckett said.

He said the industry was committing to real targets in energising change, with gas proving a real solution for reducing greenhouse gas emissions. APPEA targets include making 70 per cent of all new power stations gas-fired, tripling LNG capacity to the Asia-Pacific region and doubling natural gas use for industrial purposes and resources processing.

However meeting such targets requires innovation and change and the breadth of speakers at the conference presented delegates with a range of issues facing the upstream sector.

Government action

Federal Minister for Resources and Energy, the Hon Martin Ferguson, addressed the conference in a wide-ranging speech that focussed on the challenges facing the industry and the solutions the Australian Government is implementing to overcome them.

“‘Energising Change’ is about seizing the opportunities we have to unlock the wealth of Australia's vast resource potential, particularly our natural gas,” he said.

Mr Ferguson addressed key issues including; energy security, regulation and approvals, foreign investment, climate change and investment in Australia’s energy sector including – infrastructure, skills, training and greater workforce participation.

The Minister also highlighted foreign investment, saying that the 21st Century is Asia’s century and that Australia can be a very important part of it.

Western Australia Deputy Premier, the Hon Eric Ripper, also addressed the conference, highlighting the state’s key place in Australia’s petroleum exploration and production sector, with the state producing 69 per cent of national natural gas in 2007.

Mr Ripper highlighted the importance of domestic gas for the growth of Western Australia’s industry and economy, arguing that environmental concerns and the need to minimise greenhouse gas emissions will increase the importance of natural gas.

On the issue of nation-wide regulation and approvals, Mr Ripper said the Western Australia Government is not yet convinced that a nation-wide review of the system is required.

LNG and technological development

Liquefied natural gas (LNG) was a major focus of the conference, with many speakers addressing the issues surrounding the growth and expansion of Australia’s export gas markets.

Wood Mackenzie consultant Ben Hollins said Australia could be the next Qatar provided it addressed some of the challenges it currently faces. Turn to page 40 for a more detailed look at Mr Hollins presentation.

Technological development was another major focus of the conference. Chevron Energy Technology Company President Mark Puckett said that technological advancements are making the previously inaccessible, accessible.

He said LNG projects have become bigger and more complex and involve intricate commercial arrangements, multiple partners and stakeholders, and billions of dollars in investment at a time of rising costs.

Shell Gas and Power Executive Director Linda Cook announced that the Prelude gas field could be the site of one of the first applications of Floating LNG (FLNG).

Ms Cook said that Australia is an example of a country where the energy industry faces a challenge in accessing a suitable onshore site for developments, particularly around the Browse Basin and the Kimberley coast. She said that FLNG has the potential to provide a lower cost development for small gas accumulations located far from shore and reduces a project’s environmental footprint.

“While it is still early days we are excited about the technology and its potential application in Australia and other regions around the world,” she said.

Meanwhile, APPEA’s target of tripling LNG production by 2017 did raise some eyebrows. Woodside Chief Executive Don Voelte said that the reality is that the target is impossible because of a lack of skilled workers, as well as a lack of contractors able to provide the big equipment required for major projects.

APPEA Chief Executive Belinda Robinson responded, saying that it would be defeatist not to aspire to the targets set.

An APPEA spokesperson said “The industry agrees with Mr Voelte that the aspirational targets for increased LNG production will not be achieved without real action on the part of both industry and government to get projects off the drawing boards and producing oil and gas.”

In the spirit of the conference theme, the spokesperson added “We won’t throw up our hands and say the challenges are too great, we believe the industry strategy sets out a positive work program over the next nine years to achieve real outcomes and more LNG on the water.”

The future

Climate change was a major issue on many presenters’ agendas. Ms Robinson said the Australian natural gas industry could help avoid 180 million tonnes of global greenhouse gas emissions per year by 2017 if it meets the association’s aspirational production targets for LNG and domestic gas.

However, adapting to a carbon constrained future has its challenges. Sessions highlighted that reporting of greenhouse emissions will require robust accounting and reporting to engender market confidence.

John Briggs from Blake Dawson Waldron noted that an emissions trading scheme poses real legal risks to project developments. Emissions may, he said, eventually be a factor preventing projects going ahead.

Despite the challenges facing the industry, the key to energising change is coming to terms with future challenges through discussion and debate. It was therefore fitting that the conference closed with a panel discussion on future energy challenges and the changing domestic outlook in a post-emissions trading context.