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Speech delivered at the ALPGA National Conference 2003, Albury.

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WT04/2003 10 April 2003

Speech by the Hon Wilson Tuckey MP Minister for Regional Services, Territories and Local Government delivered at the ALPGA National Conference 2003

Albury 10 April 2003

Ladies and gentlemen

It's a great pleasure to represent the Prime Minister at this event today.

The Prime Minister has asked me to reaffirm to you the Government's recognition of the importance of LPG to our energy choices and energy needs in Australia.

The Government congratulates the LPG industry for recognising the challenges and changing environment facing the industry, and drawing up a strategy to proactively address these issues, particularly those facing Autogas.

This move shows a maturity and an understanding of the need for a common vision if the sector is to compete on a national and global scale.

The Strategy covers policy issues for government, actions for the industry as a whole and priorities for individual organisations and participants in the fuel and vehicle industries.

I'd like to take this opportunity to congratulate Mr Alan Beale, who is President of the ALPGA and Managing Director of Elgas as well as Autogas Taskforce Chairman for the Autogas Strategy.

I'd also like to acknowledge the presence of Mr John Venn, President of the world Liquefield Gas Association and Vice President of Chevron Texaco.

His presence here at the conference is an indication of the Australian industry's prominence as a domestic producer and supplier of LPG, and as a world supplier of LPG.

The Economy

LPG is an important part of Australia's fuel mix. An important part of the economy.

LPG provides for about 2 percent of Australia's energy needs.

About 60 percent of LPG sales are for automotive use, with the balance used for domestic purposes, including heating and cooking.

In 2002, Australia produced around 3.3 million tonnes of LPG - around 1.9 million tonnes was used here and the balance was exported.

During 2002, Australia exported nearly half of our total production of LPG to mainly Japan and China, earning nearly $550 million in export revenue.

And we're fortunate that we have plenty more where that came from!

It has been estimated that we have enough LPG to meet over twenty years of national demand, and potentially up to fifty years.


LPG also has the potential to reduce the impacts of our energy use on the environment.

Autogas can provide air quality benefits compared with current petrol and diesel vehicles - mainly in the form of reduced particulate and air toxic emissions.

I think the industry has recognised that Autogas has not always lived up to its clean fuel potential due to shortcomings in the vehicle conversion technology. The maturity of the industry that I referred to earlier can be seen in your willingness to work with governments to develop standards and accredit Autogas' clean fuel credentials where it matters most - out of the tailpipe.

LPG also has the potential to reduce greenhouse gas emissions. It has been estimated that LPG use saves carbon dioxide emissions of between 850,000 and 1.1 million tonnes each year. Although the abatement cost of this is not cheap - it's estimated at $600 to $800 per tonne of carbon dioxide saved.

Australia has the highest consumption of Autogas per capita in the world - 150 litres per person per year. LPG is used by 550,000 vehicles, including around 330,000 private vehicles and 22,000 taxis.

The industry claims that because of Autogas, Australia imports 13 million barrels less oil a year than it otherwise would.

The widespread availability and abundant local resources of LPG mean that it is an important part of Australia's fuel options, and helps to build the resilience of our energy market.


As the Minister for Regional Services, I am particularly impressed by the contribution the industry makes in providing a safe and dependable bottled gas supply to rural dwellers living beyond the reach of reticulated gas supplies.

Access to a secure supply of reasonably priced bottled LPG underpins the quality of life for Australians in many remote localities.

Almost 1 million homes in regional areas use LPG.

And almost 15,000 Australians - many of whom live in regional areas - are employed in the LPG industry.

In recent times more Australians are choosing to travel domestically rather than overseas.

The availability of LPG cylinders for domestic needs, from cooking to refrigeration, in caravans, boats, campsites, picnic grounds and remotely located accommodation makes holiday options in rural and remote Australia much more attractive - not to mention the good old Aussie barbecue.

Holidaying Australians and international visitors benefit from this service.

It enhances the quality of their stays in a wider range of destinations, particularly rural and remote destinations.

The Energy Task Force

In November 2002, the Prime Minister, in a speech to the Committee for Economic Development of Australia, foreshadowed the establishment of a committee of Ministers to develop a strategic plan for Australia's long term energy policy.

The Energy Committee of Cabinet has now been created for this critical task.

It is chaired by the Prime Minister and comprises the Deputy Prime Minister, the Treasurer, the Minister for the Environment and Heritage and the Minister for Industry, Tourism and Resources.

An Energy Task Force has also been set up within the Department of Prime Minister and Cabinet to advise the Energy Committee.

The Task Force has been asked to provide the Government with a consistent and coherent framework for energy policy in Australia.

The timing of the Task Force coincides with Government consideration of a range of important energy policy issues, including the introduction of the Energy Grants Credits Scheme, and the development of the Climate Change Forward Strategy for Australia.

I am pleased that the ALPGA has already made representations to the Task Force on behalf of the industry.

The Task Force looks forward to engaging further with ALPGA as its work progresses over the course of this year.

Government Support for LPG Industry

The Government has provided a very generous arrangement for LPG.

The Commonwealth currently exempts LPG from the 38 cents per litre excise tax that is collected on petrol and fuel under a 5 year rolling commitment.

This costs the Government hundreds of millions of dollars in excise forgone per year.

It's interesting to recall that the excise exemption for Autogas was introduced in 1979 when the excise on petrol was just over 5 cents per litre. There's been a lot of upward movement in the excise rate since then! As many of you will know the Howard Government ended the automatic increase in fuel excise with movements in the consumer price index.

The Government also provides incentives for LPG use through the Alternative Fuels Conversion Program and the Diesel and Alternative Fuels Grants Scheme.

Under the Alternative Fuels Conversion Program, grants are provided to operators of heavy commercial vehicles to convert engines to LPG.

Ultimately, the take up of Autogas must be driven by industry through the kinds of initiatives, described in the Strategy, in marketing, promotion and development and in encouraging the availability of new LPG vehicles and technology.


That's why I was pleased to read in the ALPGA strategy some important goals for the LPG industry in the future.

For instance, the industry's vision is for Autogas to supply around 10 per cent of the Australian road transport fuels market by 2010 representing around 2.0 million tonnes of LPG per annum.

In the short term, this means Autogas reversing its recent market decline to return volumes to at least 1.4 million tonnes per annum.

I understand that the industry has commissioned a series of studies to inform its strategy and its direction setting.

The studies include an ABARE study looking at supply and demand scenarios to define what growth can be sustained 20 years into the future - this study is to be released in late April 2003.

There is also an Access Economics study to define the value of the contribution of the LPG industry including environmental and greenhouse benefits.

And there is a CSIRO LPG fuel emissions life-cycle study looking at both the pre-combustion and also tailpipe outcomes which includes future Euro 3 type technology outcomes (ie preparing the vehicle technology requirements to be introduced).

A marketing plan is to be developed to promote the benefits of LPG, based on the outcomes of the studies.

I believe that the marketing of LPG is one of the major issues facing the industry. I urge you to get out there and literally tell the world about your products.


Ladies and gentlemen, the LPG industry makes a significant contribution to Australia's energy supply.

This has been assisted by Government support, through a number of measures.

The Government applauds the industry's initiative in drawing up the ALPGA's Autogas Strategy Report to proactively address a number of issues now facing the sector.

I can assure you that we look forward to working with you in the future.

Thank you.