Speaking at the 2007 APPEA conference in Adelaide yesterday, Macfarlane said the government had already given the industry plenty of incentives.
"We've already given them substantial accelerated depreciation on upstream assets and we've worked with the industry to give them a 150% write-off on frontier (exploration) areas," he said.
Macfarlane said it was now up to the industry to make the most of its opportunities. Australia was in an excellent position to meet the projected strong future demand for LNG in Asia and North America, but he feared LNG operators were not moving quickly enough on their projects.
“If we don’t go hard and if we don’t go now, future customers could leapfrog LNG and go straight to nuclear,” he said.
“We want to see companies proceeding as quickly as possible. It’s important to get in before someone else gets in front of you.”
In 2005-06 Australia exported 12.4 million tonnes of LNG worth $4.4 million, during which time it overtook Malaysia to become the second largest exporter to Japan.
This figure would increase four-fold to more than 60 million tonnes per annum within the next decade if proposed projects Pluto, Gorgon, Browse, Ichthys, Pilbara and Darwin phase two, went ahead, according to Macfarlane.
“Construction on the North West Shelf fifth train is well-advanced and expansion of the Darwin facility, I believe, will follow in the not too distant future,” he said.
“As a result, Australia can expect to be one of the world’s top three LNG exporters within a few years.”
Macfarlane said future demand for LNG around the Asia-Pacific rim was forecast to grow strongly as a “clean energy fuel of the future.”
“LNG is certainly favoured by nations with energy security concerns and those wanting to improve environmental sustainability and economic competitiveness.”
He also responded to recent lobbying by APPEA for natural gas to play more of an important role in the domestic energy market.
“Given Australia’s demand for energy is projected to increase by 50% by 2020, I expect natural gas projects to play a key role in meeting our future energy needs,” he said.
“There is a very important place for gas in our low-emission technology mix, along with renewables, clean coal technology and even nuclear energy.”
The Australian Bureau of Agricultural and Resource Economics predicts that domestic consumption of natural gas will rise by 4% per year in the medium term and almost double by 2030.
But if gas is to reach its export potential, Australia must continue to give “the right signals to the market”, according to Macfarlane.
“In that context, there's no place for uncommercial state government mandated domestic gas reservation policies that impose artificial constraints on export capacity,” he said.
"They harm our international reputation and erode industry confidence and can potentially stop LNG projects from going ahead."
