Mark McArdle was first elected to Queensland Parliament on 7 February 2004 as the Member for Caloundra. During his time in Parliament, Minister McArdle has held many central positions including Leader of the Liberal Party and Deputy Leader of the Opposition after the merger between the Liberal and National Parties. He is extremely passionate about cost of living issues impacting Queenslanders and has initiated vital reform processes in the Energy and Water sectors since taking the portfolio. This includes creating a 30-Year Energy Strategy and a 30-Year Water Strategy in order to provide a sustainable blueprint for the future of Queensland.
1. What is your view of the role of renewables in your state's energy mix? How do you balance the state's role in the energy value chain and its carbon footprint, given that Queensland is an energy exporter?
Renewables are currently playing a large role in the State's energy mix with one gigawatt of solar capacity installed on rooftops across the State. It is anticipated that a shift in generation to a more diversified generation mix will continue to happen as technologies mature. It is important to let the market dictate what generation should be brought on line. This will create challenges for the generation and network sectors and this will need to be monitored and responded to in a timely manner, and hence, my Department has been working on developing a 30-year electricity strategy.
2. You recently announced major reforms to the Queensland's electricity sector. What are some priorities that you hope to address through these reforms and why are they important to Queensland residents?
The key thrusts of the Queensland Government's energy reform package are to address recent electricity price rises and to develop a more competitive and efficient market that is also robust and flexible, to allow the innovation that will come in the future.
One of the first actions of our Government last year was to establish an Interdepartmental Committee to undertake a comprehensive review of the State's electricity sector and to provide options to get things on track. Of highest priority were options to address the cost of developing electricity network infrastructure, which has been the main component of electricity price increases. The committee released its report in June this year and implementation of their recommendations is well underway.
In the short term, we are focused on addressing price increases as we understand the importance of affordable electricity for all Queenslanders. Whilst residential customers are at the heart of concerns, we also recognise that competitively-priced electricity is of vital importance to business and its productivity, which in turn is the key to Queensland's economic prosperity. In the longer term, we have a vision for a vibrant and competitive electricity market, where customers are the focus. We want our customers to be engaged, and have the information and ability to make choices about how and when they use electricity, and how to benefit from different products. We know there will be innovation and new technologies and we want a system that facilitates these.
That is why we are undertaking consultation on our 30-Year Electricity Strategy. The Government has recently released a Discussion Paper for consultation with Queenslanders – both individuals and businesses. This discussion paper outlines a range of objectives that will guide our electricity sector along with proposals to address current and future issues. We will be undertaking broad consultation on these during the coming months before preparing our final strategy.
3. You are minister at a time when unconventional gas is seen as a game-changer and demand for the fuel continues to rise on the back of economic growth in Asia. What role will unconventional gas play in Asia and on global markets?
New drilling and extraction technologies are unlocking enormous new coal-seam, shale and tight gas resources that are transforming gas (and oil) around the world. Other than Australia, it appears likely that the United States (US) is in a position to quickly develop an export LNG industry that could then be available within the Asian-Pacific region.
The Queensland Government has had a long history of involvement in the gas industry in Queensland and has supported its growth with targeted support since the mid 1990's. However, it wasn't until the late 1990's, following discoveries near Moura, Injune and Wandoan, that it was demonstrated that large volumes of coal seam gas (CSG) could be produced. Supported by this development and government involvement in the gas market, demand in Queensland and the Eastern Australia gas market has grown significantly. Currently, Queensland's gas demand is around 240 Peta-Joules (PJs), with Eastern Australian demand at 780 PJs.
The emergence of unconventional gas extraction technology and new discoveries around the world will see significantly more supply options for gas buyers in Asia and around the world. Queensland will strive to capture these opportunities, as will other exporting countries.
4. With Asian countries looking to diversify their sources of fuel from fossil fuels to renewables, what do you think Asia's future oil and gas landscape will look like? How do you see the fuel mix in Asia evolving by 2035?
The International Energy Agency predicts that global gas demand will grow by 55 per cent to 2035, and this could possibly equal demand for coal as the energy market searches for lower emission fuels. Demand for all energy sources are expected to increase over that time; however, gas and nuclear are expected to show the largest increases.
Although renewable energy will play an impactful role in Asia's energy mix going forward, gas is likely to become a more sustainable alternative to coal given its lower carbon emissions. Gas-fired power generation, particularly in developed economies, has accounted for nearly three-quarters of capacity growth between 2000 and 2009. In addition to its lower carbon emissions, gas-fired generation offers several advantages over coal. These include lower capital outlays for gas-fired generation and shorter project lead times; flexibility in providing either peak or base load power; and the ability of gas to act as a supplement to intermittent renewable energy sources.
5. As more LNG supply projects come online around the world, what are your views on the global LNG supply/demand landscape from now until 2020?
Natural gas supplies around one-fifth of the globe's energy needs, compared to one-third from oil and one-quarter from coal. Around 30 per cent of natural gas produced is internationally traded (predominately pipeline trade). However, the Asia-Pacific market relies on LNG trade, which is more efficient for longer distances, and LNG makes up 75 per cent of long-distance natural gas trade. The Asian natural gas market is the fastest-growing gas market worldwide, and is expected to become the second-largest by 2015, with 790 billion cubic metres of natural gas demand.
Rapid growth in LNG production capacity for export is likely to continue, supported by large capital investments. Rapid increases in demand may come from countries wanting to reduce their dependence on nuclear power, carbon reduction schemes and to meet growing energy needs. The latter point is important as the bulk of growth in gas demand is expected to come from non-OECD nations, particularly China and India.