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ELGAS, Australia |
Australia just signed up to the Kyoto protocol at the recent Bali talks. What, if any, role is LP Gas likely to play in the reduction of Greenhouse Gases (GHGs) in Australia? Like all governments, ours wants to reduce GHGs, without denting Australia's competitive advantage. No government wants to introduce measures which add to the cost of production, thereby allowing rival countries to gain a competitive advantage. So, it's encouraging that we've signed up to Kyoto, because the government must now explore all options for addressing climate change, without creating a competitive disadvantage. LP Gas can help make an immediate positive impact. 25% of all CO2 emitted by Australian households is caused by the electricity used to heat water. As we have the 5th biggest coal reserves in the world, our electricity is powered by coal, which is not a clean energy. If households switch to LP Gas just to heat water, that will cut CO2 emissions by 70%. Hybrid technology which combines solar or wind power with LP Gas is also becoming more easily available and the government is already providing incentives to make these options more affordable. Autogas too is a clean option for vehicles, and is available right now. It emits 12% less CO2 than petrol, 20% less oxides of nitrogen and half the particulates. LPG plays an important role in improving urban air quality. **
This security of supply means the Australian government looks favourably on the industry. Autogas has been tax-free since it first became available, more than 40 years ago. There was an attempt some time ago to introduce a tax, but we led a campaign against it and the government decided to delay and minimise any such tax. The government also introduced conversion grants for motorists to convert their engines to LP Gas. They pay AU$2,000, more than half the conversion cost, towards converting a used car, or grant AU$1,000 off the price of a new autogas car. Autogas also costs less than half the price of petrol at the pump, so it's a very attractive option for motorists. As a result, 7% of all motorists use autogas in Australia and 120,000 cars in 2007 were converted to autogas. While that's not an insignificant number, we have a lot of work to do to encourage more people to make the switch. Does the Australian LP Gas market have any distinguishing features? We produce twice as much LP Gas as we consume, so we have good security of supply - a definite positive in the eyes of the government. Much of our gas is produced in Western Australia, where there is low population density, so we find it easier to export that to countries such as China, Korea and Japan. We also import gas for the East coast from Saudi Arabia, Algeria and other sources.
There will be a strong focus on the climate change issue. One way we can help lower CO2 emissions is to develop more small cars which run on autogas. Korea is the largest autogas market in the world and the Korean car manufacturer Hyundai has a great reputation for developing small autogas cars. So we can look forward to learning from their experience. It will be very exciting to hold the World Forum in Seoul as it is such a vibrant market for LP Gas. I'm looking forward to learning about many new technologies and developments which will help us compete effectively with other energies. Why is Elgas such a loyal member of the WLPGA? Unlike many large multi-national petroleum companies, LP Gas operations tend to be small regional businesses. We don't have the economies of scale which bigger organisations can leverage. As a result, we need to work together to share new technologies and developments in the global industry. By combining our efforts, we can develop several new markets, without incurring all the associated R&D expense. The WLPGA is a great way for us in Elgas to learn from and share with our peers across the world. Another reason for our involvement is the global dimension of the Association. Our industry is active in all corners of the world and events which take place in one country can sometimes have repercussions in another. For example, if there is an accident in Australia, that may result in increased regulations in Canada, which may add considerably to the cost of doing business. So, I believe it is important that we encourage the industry to speak with one voice and to ensure consistency in safety standards across the world.
I would like to encourage more LP Gas players to become involved in the WLPGA. By not getting involved, you are at a definite disadvantage. The more you contribute to an association like the WLPGA, the bigger rewards you reap. In the end, active involvement in the association means you learn more, make great contacts and your organisation becomes more profitable, which means you can offer better security to employees and shareholders alike.
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