"The potential to convert some of our vast gas and coal resources to synthetic fuels like clean diesel is significant and I am pleased to see a number of major international companies now expressing interest in this industry here in Australia," he said during the Committee for Economic Development of Australia's 2008 State of the Nation conference in Canberra

"While we are oil-challenged, Australia is a world-class gas province.

"We have been finding gas faster than we produce it for a quarter of a century and we have well over 110 years worth of remaining resources at today's production rates; and significantly more if we include the vast potential of coal seam methane."

He added that while there used to be scepticism about CTL and GTL in the past, the industry is taking off with ultra-clean GTL diesel attracting significant premiums in the global marketplace.

"GTL plants in Qatar and Malaysia are supplying significant markets in Europe and Thailand with Shell selling GTL diesel blends to over 3000 retail sites," Ferguson said.

"More importantly, CTL will soon be real, right here in Australia with Linc Energy's pilot project at Chinchilla in Queensland."

The minister also touched on his department's support for renewable energy sources in the hope that they will become contributors to Australia's long-term energy supply and greenhouse gas reduction strategy.

Ferguson said the $15 million commitment to second-generation biofuels (using biomass from non-food parts of current crops) would help the industry avoid the conflict between fuel and food while geothermal energy has the potential to contribute base-load electricity to Australia's energy supply without generating greenhouse gases.