Funding will be provided to meet the Commonwealth’s contribution to the expenses for energy market reform under Ministerial Council on Energy; continue the Council of Australian Governments’ energy market reforms for electricity and gas networks; fund a simulation exercise to test and improve liquid fuel emergency response procedures; and, support a comprehensive and strategic approach to Australia’s energy security.
The Government said the $4.1 billion commitment will deliver integrated, strategic policy advice on energy security, from physical infrastructure security and energy supply chain resilience to medium term economic consideration of the adequacy, reliability and affordability of domestic energy.
The Australian Government is developing an Energy White Paper over 2009, which will address Australia’s energy security and climate change objectives and provide a policy framework through to 2030.
The Energy White Paper will also take into account the National Energy Security Assessment, which was released earlier this year and covers the liquid fuels, natural gas and electricity sectors currently and in 5 years, 10 years and 15 years time.
In addition, the Government will extend for one year the incentive for businesses to undertake offshore petroleum exploration.
The incentive provides a 150 per cent upfront deduction for exploration expenditure in prescribed remote locations, known as designated offshore frontier areas (DFAs). It is designed to reduce the cost of petroleum exploration in Australia’s remote offshore areas, stimulating exploration activity and increasing the likelihood of discovering new oil and gas provinces.
DFAs are identified each year as part of the Government’s annual release of offshore petroleum exploration areas to the petroleum industry. The one-year extension will enable this incentive – which has applied to the annual release of these areas since 2004 – to apply to the 2009 annual offshore acreage release, which will be announced in June.
The tax incentive will be assessed in light of the final report of the Australia’s Future Tax System Review and the Energy White Paper.