With climate change and its effects at the front of everyone’s mind, the challenge to effectively manage Australia’s energy and resources sectors is enormous.

The government has acknowledged this challenge and its policy emphasises the resources sector as one of the Australian economy’s greatest assets. While the sector has experienced great economic expansion, the government has repeatedly emphasised the significant capacity constraints and challenges that have the potential to limit its future growth. Among these challenges are a shortage of skilled labour, uncertainty about future gas and liquid fuel supplies, a slowdown in exploration, regulatory impediments and the uncertain impact of climate change.

In response to these challenges, the government has promised to work with industry and state and territory governments to build a coordinated national agenda for securing sustainable long term growth in the resources sector. This will be achieved by implementing practical initiatives to overcome capacity constraints, encouraging new investment and supporting the expansion of existing operations, and ensuring that future generations of Australians share in the benefits of the current strong international demand for this country’s natural resources.

According to the government’s policy document, 'Labor’s Plan for a Stronger Resources Sector', liquefied natural gas (LNG) exports have increased sharply over the last three years, with earnings increasing by 47 per cent in 2004-05, 38 per cent in 2005-06 and 18 per cent in 2006-07.

“While increased LNG exports are welcome, the industry needs to further develop to open up greater supply for domestic use. This may require encouraging smaller players to develop finds suitable for meeting growing domestic demand in addition to the larger LNG export oriented fields,” the document says.

Natural gas is a key resource to ensure Australia meets these challenges and to ensure Australia can meet the growing demand for energy, both domestically and internationally.

Natural gas, the government has said, could help to meet Australia’s growing energy needs as the country makes the transition to an increasingly carbon constrained economy.

The government has said it will:

- Encourage the development of the gas industry to open up additional supply for export and domestic use; - Support the increased use of gas as a transitional fuel to meet Australia’s energy needs as the country moves to a more carbon constrained economy; - Encourage a greater number of domestic gas producers to supply the market including those sourcing their gas from coal seams; - Examine options for linking the vast gas reserves in northwest Australia with the eastern states; and, - Include projections of future gas supply and demand in a regular National Energy Security Assessment to better inform industry and the energy sector about future gas use.

As Minister for Resources and Energy, Martin Ferguson will have the responsibility for meeting these outcomes, but the gas industry has welcomed his appointment.

“Mr Ferguson knows and understands Australia’s energy industries, particularly gas transmission,” said Australian Pipeline Industry Association (APIA) Chief Executive, Cheryl Cartwright.

However, Mr Ferguson is not the only Minister with a keen interest in the gas industry. Minister for Climate Change, Penny Wong, is expected to play a key role, as are Minister for Infrastructure Anthony Albanese, Minister for Innovation and Research Kim Carr, and Environment Minister Peter Garrett. Both the Australian Petroleum Production & Exploration Association (APPEA) and APIA have welcomed the appointment of these new cabinet ministers.

APPEA Chief Executive Belinda Robinson said that the industry has responded very positively to a number of the government’s announcements, particularly the amalgamation of the industry portfolio with innovation, science and research; the appointment of Penny Wong to head up a separate climate change and water portfolio; and, including education in Julia Gillard’s workplace relations and Deputy Prime Ministerial portfolio.

“This is a very exciting but challenging time for the Australian people and Australia’s energy industries. The Ministerial line-up represents a strong balance of experience, credibility, new ideas and a freshness of approach that the upstream petroleum sector is confident will serve the nation extremely well,” Ms Robinson said.

The government will encourage gas exploration efforts and promote investment in exploration, allowing the selective use of flow-through share schemes for smaller operators in the gas, as well as the oil and mineral, exploration industries.

As part of its promise to ensure Australia’s sustainable energy supply, the government will support the use of natural gas as a transitional fuel that offers lower emissions in the period before new energy technologies become available.

While before the election there was some concern that gas was missing from both the Coalition and ALP’s policies, the importance of natural gas to fuel Australia has since been recognised. There remains one question, that can only be answered in actions: Will this new government deliver?