Brazilian Elizeu Boto, who started at Deloitte this week replacing Canadian Geoffrey Cann as its Brisbane-based energy lead, has developed an intimate knowledge of the LNG producers over his past six years at Accenture.

 

It's no coincidence that his career path has followed that of Cann's successor as Deloitte Australian oil and gas lead, Bernadette Cullinane, who also came from Accenture, because optimising assets through new technology is exactly what LNG producers are thinking more openly about, Boto told Energy News.

 

"I definitely see in my talks with the operators a shift of trying to change the way they did things in the past, trying to change the culture, to think outside the box and look to other industries [for innovation ideas]," he said.

 

The "call to action" has been triggered not only by low oil prices, but increased LNG market competition into Australia's traditional customers in Asia and, as revealed at APPEA 2016, Russia.

 

"The low-hanging fruit of cost reductions by reducing headcounts and working with suppliers has had some benefits but it's now about going the extra mile," Boto said.

 

"The call for action and the pressure that you see now in trying to improve their operating costs per barrel is much more acute than it was in the past."

 

His intimate dealings with Queensland's LNG companies throughout the capital-heavy phase saw them focus on implementing capability in time for first gas.

 

"Now I see the change - executives much more open to discussing different ways of doing things, with the application of new technology that is becoming cheaper and cheaper.

 

"Now they're experiencing challenging wells in the field, and there are opportunities to move above and beyond where they have collaborated in the past, which was safety.

 

"Building a culture of innovation is easy to talk about, but in an industry where safety is paramount it's very expensive to fail for these companies. So they need to be more open to discussion about innovation in association to value."

 

 

Prime Minister Malcolm Turnbull just announced that from July 1 the energy regulator would be able to ask Queensland's LNG producers to redirect gas from their projects into the domestic market in times of gas shortage.

 

Talking to Energy News just as industry was digesting that announcement, Boto said it was "an opportunity for the industry to look into their own structure of their projects, to make sure that they put information out there to the federal government and communicates as to what they're doing".

 

Macfarlane, a former Resources Minister and now  Queensland Resources Council CEO, described his former colleagues new market powers as "mindboggling", given what he claimed were foreign-funded green activists influencing energy policy in New South Wales, Victoria, South Australia and the Northern Territory, leading to gas shortages, blackouts and skyrocketing electricity prices.

 

He said NSW had gas to fix the situation but politicians had "buckled in the face of the relentless anti-gas green activist campaign".

 

"Short-sighted NSW only produces about 5% of the gas supply it needs, which means it relies on other states like Queensland for its supply so households and businesses can keep the lights on," he said.

 

Victoria also has a moratorium on all onshore gas exploration, the South Australian Liberal opposition has pledged a gas ban in parts of that state, and the Northern Territory also has a temporary moratorium.

 

"It is important to remember the gas export hub at Gladstone was approved because there was an expectation that NSW would go ahead and develop its own gas, but due to extreme green activist campaigns, NSW gas has been left in the ground, leaving the east coast in a state of panic over out-of-control prices for electricity and gas," Macfarlane said.

 

 

The Australian Pipelines and Gas Association also criticised the Commonwealth's decision to abolish the  limited merits review process, which the group called a "key mechanism" for ensuring regulators' judgements were independently scrutinised by the Australian Competition Tribunal as a "grave concern".

 

"The limited merits review is enshrined in the National Gas Law and the National Electricity Law and these pieces of legislation have been carefully developed by federal, state and territory ministers working together through the COAG system," APGA CEO Peter Greenwood said.

 

He urged politicians to think hard about both the short and long-term consequences of the increasing number of "ad hoc" responses to complex energy markets.