A REVIEW into competition in the gas market has drawn fire from Australia’s peak oil and gas lobby group, which says it is unnecessary and risks damaging investor confidence.

But the review, to be carried out by competition tsar Rod Sims, has been welcomed by industry and manufacturing groups who are calling for more transparency around gas prices.

The Federal Government yesterday said it had asked the Australian Competition and Consumer Commission to probe competition in the wholesale gas market.

The request was made as the Government released its energy white paper, which backs the development of coal seam gas resources — deposits that often require fracking to tap — and dismisses calls to impose a national gas reservation.

The paper also argues for the privatisation of state-owned electricity assets, time-of-use electricity charges where consumers pay more when demand peaks, and the voluntary roll out of smart meters.

The Australian Petroleum Production and Exploration Association yesterday said 24 contracts signed between gas producers and suppliers over the past three years showed the gas market was operating effectively.

“Industry remains concerned about the need for an Australian Competition and Consumer Commission inquiry into a gas market that already works,” the association said in a statement.

The group warned a “long and protracted inquiry” could negatively impact the sector’s willingness to invest in new exploration and development projects.

The Australian Industry Group, which represents manufacturers, backed the inquiry saying greater transparency around gas pricing for large consumers was much needed.

“Tight supply and rapidly rising prices in the eastern gas market have been a growing headache for industry and a comprehensive government response is vital,” chief executive Innes Willox said.

Queensland Resources Council CEO Michael Roche said while the plan did highlight that coal and gas would underpin the global energy mix for decades to come, it fell short in delivering a plan for fuel security for Australia and its growing dependency on oil imports.

‘The White Paper states that more than 90 percent of Australia’s transport fuel is petrol, diesel and aviation fuel, which cost $30 billion and could grow three-fold to $90 billion by 2030,’ Mr Roche said.

‘The Energy White Paper is a missed opportunity for enhancing alternative fuel sources and reducing our dependence on just-in-time supplies of fuel arriving before our economy runs out of fuel.’

Mr Roche said Australia’s inability to supply transport fuels by diversifying its supply mix means that the country is increasingly exposed to global geo-political risks.

‘Queensland is well endowed with the expertise to bring into production a whole portfolio of alternative fuel technologies including gas-to-liquids, coal-to-liquids, shale-to-liquids, biofuels (ethanol/biodiesel), micro-LNG and CNG.

‘Each of these commodities and technologies has the potential to make significant employment and tax contributions as well as diversifying Australia’s fuel supply mix. Each technology has a different potential to contribute in terms of volume, cost and timing, but the diversification they offer the Australian economy simply hasn’t been recognised in the White Paper.”