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Interview

Cheryl Cartwright – CEO, Australian Pipeline and Gas Association (APGA), Australia

Chery Cartwright Headshot

The CEO of the Australian Pipeline and Gas Association (APGA), Cheryl Cartwright portrays the value that gas serves in the nation’s energy mix, and highlights a few of the challenges created in the domestic gas market by the growing presence of export facilities in Eastern Australia including tightening supply security and escalating prices.

Although established almost 50 years ago, APGA recently rebranded earlier this year to officially include gas in its name. What does that say about the value that this organization places on this particular resource?

Many years ago, in conjunction with the privatization of gas infrastructure, particularly with respect to transportation, the Australian Gas Association (AGA), the peak national body representing the gas industry at the time, scaled back—it’s now just a small standards association with no lobbying and policy development functions. The main sectors represented under AGA then splintered into various segments of the market. For example, the electricity networks association changed its name to the Energy Networks Association (ENA), and now also covers gas distribution. Similarly, APGA initially started off as a construction association but broadened its scope to encompass the pipeline owners and operators that left the AGA because there wasn’t a critical mass to have their own body—leading to our former name Australia Pipeline Industry Association (APIA).  From that point forward, we began focusing on the gas markets and all gas-related policy developments.

Over the past few years, the nation has seen an influx of capital-intensive LNG projects, many of which are starting to come online now. What downstream impact have these megaprojects had on the pipeline industry? 

For the construction side of the industry it’s been a huge boom. The LNG terminals have utilized just about every worker available in the industry to build them—placing massive pressures on the level of skills and resources readily available. With the pipelines finished, construction activity will revert to a much slower pace, as it’s about getting the LNG trains up and running now.

The challenge for the rest of the industry comes in as supply commitments are made for export contracts—effectively reducing readily accessible gas supplies for the domestic market, which in turn impacts gas pipeline owners and operators. If there’s gas flowing then there’s business; if not, it could challenge financial viability. There is certainly a wealth of reserves still remaining, but the main topic of discussion centers on whether or not the E&P companies will deem them economically viable to develop. This is also where the industry associations have begun to get together to advocate for gas. In Australia, as well as power generation, the manufacturers use gas as an input and for power, and households use it as well. Planners need to think about including gas infrastructure into households—rather than just using electricity. So, generating that interest and commitment is what we want to do.

Given the widespread prevalence of unconventional gas resources—particularly in the Eastern states—do you believe the current moratorium on onshore gas exploration is hindering growth?

The restriction won’t impact LNG exports, but it does affect the supply of gas in the domestic market. For example, New South Wales (NSW) only produces 5 percent of its gas requirements—importing the remaining portion from other states. Now if those other states decide to help fulfill these pending LNG export contracts, then NSW is left with no fallback. This is, in part, why the recent contract awarded to Jemena for the construction of the North East Gas Interconnector (NEGI), a pipeline connecting the Northern Territory (NT) and Eastern states, is so significant. This pipeline will help tackle some of the issues regarding supply security; though there’s no guarantee that the prospective gas flows will go to NSW if domestic suppliers don’t act now and lock in purchase contracts.

What lessons can the Eastern states take away from the developments in Western Australia—a region that’s long been exposed to international market dynamics with thriving export businesses?

The developments in Western Australia were slightly different, as that region is primarily comprised of conventional offshore gas—as opposed to the large development of onshore coal seam gas in the East. Furthermore, historically the West Australian gas prices had been held down artificially, so they had to face higher prices eventually—which was probably further accelerated by a growing link with international markets. On the Eastern seaboard, prices were also bound to increase at some point, as the majority of easily accessible resources had already been exploited, leaving mainly unconventionals to fulfill domestic demand. That being said, however, the recently constructed export facilities in Queensland and the sale of gas to foreign markets that would’ve otherwise been reserved for domestic usage is now creating a level of uncertainty over supply security and affordability.

Moving forward, how much of a role do you see gas playing in Australia’s energy future?

One of our main challenges is getting people to understand the value that gas can provide. If we set aside the current problems with meeting the demand domestically, and assume we could meet the demand, we would need to then decide where gas can fit into the nation’s energy mix. Traditionally speaking, the nation has had access to an abundance of other resources such as coal, and some potential to tap into renewable alternatives. Especially considering the lower price and widespread availability of coal, this has certainly slowed down the ability to bring gas into the energy mix. The previous government had actually provided a substantial amount of funding to keep the coal industry going, without any commitments of scaling down production or controlling emissions. But we must also consider, during weakened economic conditions, Australia has a lot to lose if we increase our energy prices too much. But, as a complement to renewable energy, this is where we see gas as a valuable part of the country’s energy future—especially considering its cleaner characteristics.

What we need, and our challenge for the next few years, is getting a sensible discussion about an energy mix that includes gas, and this goes beyond the borders of Australia with organizations such the International Gas Union advocating on behalf of this agenda as well. Worldwide, and perhaps more so in Australia, gas needs a bigger campaign to create more education and awareness—a medium where we’re talking to people and getting them to understand the value of this resource. I would even go as far as to say that we take gas for granted, and in order to truly capitalize on our assets and provide a sustainable energy future, we need people to appreciate it more. To this end, we’re currently working with the Energy Networks Association (ENA) and the Australian Petroleum Production & Exploration Association (APPEA) on producing a joint publication highlighting the benefits of natural gas.

Given these dynamics, what type of response can we expect from the newly minted Turnbull administration—specifically with regards to Minister Frydenberg?

It’s a challenge for politicians as they want to be seen as doing something—but their influence is only limited to the efficiency of domestic gas markets—which we’re working closely with them on. We just want the right support, attitude, and also level playing field. When the previous government introduced climate change policies, they assisted the coal industry and funded renewables, but did nothing for gas. But, actually getting the gas supply to the market is the question that remains unanswered. It’s up to the major production companies as to whether or not they undertake the investment to supply the domestic market and gas users to negotiate to bring the gas to the market.

As CEO, what will your strategic priorities center on in the next few years?

We will augment our advocacy for gas, while also collaborating with other associations such ENA and APPEA to more effectively promote the gas agenda. In hopes of solving the domestic supply issues, we will also be working more closely with government stakeholders on policies that encourage the use of gas.

Given your decade-long tenure with the organization, what would you consider your proudest milestones and achievements?

There are a couple things as an association that we’re very proud of. In 2006, we had our first Young People’s Forum in Canberra to address the generational gap in the sector’s workforce. The event was so successful, with 80 people showing up as opposed to the expected 30, that we now have a national committee comprised of chairs representing organizing committees in each state. Each State YPF now holds their own events such as educational talks, social events, and even mentoring sessions. Currently, we’re in discussions with representatives from America, Canada, and Europe to prospectively bring this initiative to other countries.

The other achievement that I’d like to highlight is our training program that helps facilitate knowledge transfer and skills development within the pipeline industry. Currently, Australia lacks the critical mass to offer a master’s degree in pipeline engineering, so we’ve set up a competency matrix that’s officially recognized by Engineers Australia—the national forum and professional body for engineers in Australia with over 100,000 members spanning multiple disciplines that now includes pipeline engineering. So, aside from pushing forward the gas agenda, we have been able to make substantial advancements in the pipeline industry—many of which have materially impacted the way this industry works and operates. The ability to actually see the fruits of my labor and witness positive changes in action is what has contributed to my longstanding tenure with this organization, and could very well contribute a couple years more.

Click here to read more articles and interviews from Australia.

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