A new report has raised concerns over Western Australia’s domestic gas supply and energy costs, citing excess liquefied natural gas (LNG) export capacity at Woodside’s Burrup Hub and a lack of timely renewable energy development as major threats.
The report, titled From Provider to Parasite: Excess LNG export capacity and state energy policies as emerging threats to WA’s domestic gas market, environment, and economy, was released by energy analysts Sustainable Energy Now and Climate Safe Solutions.
Its findings come as a Parliamentary Inquiry into WA’s domestic gas policy unexpectedly postponed the release of its Final Report, which had been due to be tabled in Parliament this morning, to allow more time to consider submissions, including this report.
According to the report’s modelling, Woodside’s massive North West Shelf facility will increasingly rely on large volumes of gas from WA’s onshore domestic reserves to meet its export demand, as the dwindling yield from offshore gas fields proves insufficient.
“Contrary to Woodside’s PR campaign, Burrup Hub is already becoming a parasite on WA’s domestic gas reserves and will increasingly compete directly with domestic gas users in the state,” said Piers Verstegen of Climate Safe Solutions, the report’s author.
Verstegen warned that without urgent action from the state government, the WA gas market could follow the same pattern as the East Coast, with higher prices for consumers as LNG exporters make huge profits by diverting gas from the domestic market for overseas sale.
The report calls on the state government to deny Woodside approval to extend the North West Shelf facility to export WA’s domestic gas and to place a permanent ban on any further export of the state’s domestic gas reserves.
Sustainable Energy Now Acting Chair Dr Rob Phillips emphasised the need for a strategy to dramatically scale up the production of low-cost renewable energy to replace gas use in WA.
He cited examples where renewable electricity can replace gas in household, commercial, and industrial settings at a lower cost, but noted that the lack of support for renewable energy development is currently holding these opportunities back.
Phillips also highlighted the growing demand for gas from LNG exporters and the lack of renewable energy as factors driving up carbon pollution, making the state less competitive and less attractive for investors seeking access to cheap, clean energy.
The analysis identifies exporting LNG as the lowest value use for WA’s gas resources, delivering fewer jobs and less revenue per unit of gas used than any other industry.
“Every tonne of gas that is exported from our domestic reserves comes at a cost to WA consumers and a cost to the WA economy,” Phillips said.
In addition to denying Woodside’s request for unlimited approvals to export domestic gas and banning further exports, the report calls for scaling up renewable energy generation in WA to replace gas demand and developing a plan to phase out the use of gas in the WA domestic market in the medium-term.