Addressing the Australian Institute of Energy conference in Sydney, director of the Australian Petroleum Production & Exploration Association Mr Barry Jones said current national energy policy was too fixated on attempts to lower electricity prices for eastern state consumers by promoting competition in the East Coast energy markets. He said this was doomed to failure.

"The cost of this failure will be much greater than under-investment in electricity generation and transmission infrastructure and associated risk of supply disruption," Mr Jones said. "The bigger cost will arise as a result of ignoring the problems associated with Australia's projected increased reliance on imported supplies of oil and petrol and the opportunities for developing an alternative fuels industry based on gas."

Mr Jones said it was important that a West Australian with a lot of experience in the upstream oil and gas industry be appointed to the proposed three member panel reviewing strategic directions in national energy policy for the Council of Australian Governments.

Mr Jones added a strategic national review would go beyond energy market reform and include a drive to enhance oil exploration and development, establishment of a gas-to-liquids industry, more gas transmission lines as well as development of public transport infrastructure.

For a national energy policy to deliver a broader approach it must contain more efficient approval processes, an international competitive taxation system, major R&D effort with a focus on energy efficiency and development of new transport fuels, Mr Jones said.