Good morning ladies and gentlemen.
Thank you for the invitation to join you here today. To the many distinguished guests.
As Minister for Tourism it would be remiss of me not to encourage Professor Reitzle and his colleagues, in what he has said is his first to Tasmania, to take the time during this visit to experience the rich and varied tourism opportunities on offer in this great state.
But it is as Minister for Resources and Energy that I address you today.
As Colin mentioned I had the pleasure of attending the signing last year of a contract between BOC and the APA Group for the provision of LNG for the heavy transport sector from their Dandenong facility.
As I said at the time - an announcement that was good for jobs, good for investment in alternative fuels and something that I hoped to see more of in the future.
And here we are less than twelve months later to officially open the Micro-LNG plant here in Westbury.
The big picture
And what a year it has been for Australia's LNG sector.
The industry has gone from strength to strength.
Last month I addressed the "Energy in an Evolving World" conference in Houston and reflected on some of the major investments we have seen.
Investments in conventional gas resources but also investments in new resources, such as coal seam gas to LNG in Queensland.
Over the past 12 months we have seen final investment decisions on the $43 billion Gorgon LNG project, BG Group's $15 billion Curtis Island LNG project and, most recently, the Santos, Petronas, Total and KOGAS $16 billion Gladstone LNG project.
Investment in exploration - in the future - is growing.
Demand for LNG - both domestic and international - is growing.
The importance of LNG as a fuel source is growing.
According to the IEA, it is the only fossil fuel for which demand is expected to be higher in 2035 regardless of what climate change policies are implemented over the next 25 years.
Australia is on track to triple its LNG production within a decade and go from the fourth to the second largest exporter of LNG in the world by 2015.
These are exciting times.
The opportunities are there and they hinge on investment and innovation.
And it is the results of these twin drivers that we are witnessing today with the opening of this plant.
Westbury Micro LNG Plant
BOC was the first company in Australia to produce LNG almost 30 years ago.
Today marks another milestone for BOC and the Linde Group.
It is also a big win for Tasmania and an exciting portent of things to come for Australia's heavy vehicle transport industry.
Road transport is, after all, the largest end user of energy in the transport sector accounting for around three quarters of fuel consumption.
Globally we have seen a growth in the share of gas consumption by the transport sector.
In Australia, the number of heavy vehicles using LNG as a fuel source remains low comparative to diesel but that number is increasing and projects such as this one will spur further growth.
This micro-plant and its supporting refuelling network offer an alternative, cost-competitive solution to diesel and a more environmentally friendly fuel for the seven Tasmanian transport operators, which form part of LNG Refuellers Pty Ltd.
LNG Refuellers are leading by example, through their commitment to invest in new trucks and their signing of an initial 15-year supply deal with this facility.
Any fleet operator in Tasmania will have access to the LNG refuelling facilities that form part of this project.
Historically, one of the main hurdles for LNG as a transport fuel has been the absence of a nation-wide distribution network.
Developments such as this micro-plant reduce the 'chicken and egg' nexus between fuel and vehicle supply that has stymied the uptake of LNG in the past.
An LNG highway is taking shape in Tasmania.
It has the potential to extend the length of Australia's eastern seaboard, which accounts for around 85 per cent of Australia's transport industry.
A network like this can transform the trucking industry.
LNG can help the heavy-duty vehicle transport industry achieve significant fuel savings compared with diesel.
Investors are playing a founding role in this transformation.
And technological developments in LNG plant design can reduce the financial burden of infrastructure investment.
This plant is a good example of what can be achieved - producing 50 tonnes of LNG per day at the same price per tonne as large-scale more expensive plants.
Designs like this will nurture a seamless LNG highway, and extend its reach into regional Australia.
Policy challenges
Colin and Professor Reitzle have outlined some of the environmental benefits of LNG as a transport fuel source.
From the Government's perspective LNG has an important role to play as a cleaner burning fuel in our move toward a lower emissions economy.
This importance will only grow as the Government progresses its intention to put a price on carbon.
How we go about this, is of course the subject of widespread consultation and debate, through a range of forums.
A broad range of views from an equally broad range of stakeholders, including from the energy and resources sectors and particularly with regard to transitional arrangements, are being put to the Government.
I encourage your engagement in this process.
I likewise encourage your engagement in the consultation around the Government’s draft legislation on the taxation of alternative fuels.
I note your contributions to date and recognise that this area of policy remains a concern for industry.
The proposed reforms implement a long-term commitment to provide equitable energy content-based excise with a 50 per cent reduction for alternative fuels.
Clearly, for you, the priority is ensuring the continued uptake of LNG as an alternative fuel source, which is to a large extent contingent on LNG being price-competitive with diesel.
The Government recognises the complexity of alternative fuels policy.
As you would be aware, my Department is developing an alternative fuels strategy in close consultation with industry, state governments and other stakeholders.
The strategy will address regulatory and industry practices which may be limiting the uptake of alternative fuels.
I cannot stress enough the importance we assign to an alternative transport fuels strategy for Australia.
Transport is at the crux of our modern commercial world - stresses on the bottom line of transport directly and indirectly affect the budget constraints of all Australians.
So complacency is not an option.
Conclusion
Ladies and gentlemen, LNG is emerging as an effective solution for the Australian haulage industry - in both commercial and environmental terms.
Developments, such as this micro-plant, will boost confidence in LNG as a transport fuel of the future.
I commend the efforts of all those involved in bringing this project to fruition and wish you every success for the future.
Thank you