Australian Prime Minister Tony Abbott has flexed his muscles in Canberra, honoring his pre-election promise to repeal the carbon tax in a move immediately seen as the country tightening its belt and rising to meet the challenge of competitive global headwinds.

On a day of high drama in the Australian parliament, however, the opposition Labor Party and the Greens succeeded in shutting down the relaxation of several categories of foreign work visa restrictions that directly impact offshore vessels and rigs operating in the oil and gas industry.

The federal government subsequently moved to restore stability in the offshore sector by issuing a Legislative Instrument enabling overseas workers engaged in vital activities to continue working legally.

The move was embraced by the Australia Petroleum Producing and Exploration Association (APPEA), which said the Senate’s decision on Wednesday had threatened to shut down operations and harm Australia’s international investment reputation.

“The actions of the Senate this week placed at risk an industry that is currently building $200 billion worth of new projects in this country and has helped deliver 100,000 new jobs across the economy. Australia’s oil and gas industry is too important to be held ransom by the militant Maritime Union of Australia,” APPEA said in a statement.

APPEA was similarly buoyant over the repeal of the carbon tax that was passed in the House of Representatives, that was also opposed by Labor and the Greens but still has to be passed in the Senate, where the coalition will require six additional votes to its 33 seats.

Australia effectively became the first country in the world to repeal a carbon tax and Environment Minister Greg Hunt was upbeat: “The Australian people voted in the most express, clear and absolute way to ensure that they did not have and would not have a carbon tax, and they would have a government that would take real measures to reduce emissions without a carbon tax.

“The carbon tax increased the price of everything it touched; it punishes households, businesses, schools, hospitals, nursing homes, charities, churches, council swimming pools and community centers.

“It hits each and every group and individual who uses energy. And that was always its goal, to make electricity and gas more expensive.

“It is now up to this parliament to show that it has listened to the Australian people,” Hunt said.

“Today’s repeal of the carbon pricing mechanism is significant as it removes a cost facing Australian LNG exporters competing in global markets; one that does not exist for our international competitors,” said APPEA Chief Executive David Byers.

“Wood Mackenzie forecasts that by 2025, LNG demand within the Pacific Basin alone, will outstrip supply from existing or committed LNG projects by 160 million tonnes.

“Surging LNG demand in Asia presents an enormous opportunity for Australia. However rising development costs raise doubts about the attractiveness of continued investment in Australian projects. While initiatives are being taken within the industry to address cost competitiveness, it is good to see policy action that removes costs for trade-exposed producers.

“APPEA supports a national climate change policy that delivers emissions reduction at least cost while recognizing the greenhouse benefits that flow from a prosperous and vibrant natural gas industry.

“Exporting LNG to the world is one of the most meaningful contributions Australia can make to reduce global greenhouse emissions as natural gas is a much cleaner burning fuel than traditional energy sources.”

Dale Granger can be reached at dgranger@hartenergy.com.