A parliamentary inquiry into Western Australia’s domestic gas policy has concluded that the state’s gas industry has successfully provided domestic supply at largely stable prices.
However, the Economics and Industry Standing Committee’s final report highlights the need for new gas sources to meet rising demand in the coming years.
Australian Energy Producers (AEP) has committed to collaborating with the WA government in response to the inquiry’s findings, aiming to achieve the best outcome for the state.
The report’s key recommendation suggests allowing onshore gas projects to export liquefied natural gas (LNG), but only if the domestic market is adequately supplied and expected to remain so for a period of time.
The inquiry found that Western Australia has consistently avoided substantial domestic gas shortfalls and has largely been spared from the price and supply volatilities experienced on Australia’s east coast.
This stability is attributed to the industry’s compliance with domestic gas commitment agreements.
Caroline Cherry, AEP WA Director, emphasised the gas companies’ dedication to providing a reliable and affordable energy supply.
“The report confirms that the industry has delivered on its commitments to Western Australia’s economy,” she stated.
Cherry also noted that several companies have recently ensured additional supply to the domestic market, further demonstrating their commitment.
The committee’s report acknowledges the industry’s preference for market-led responses, which aligns with AEP’s stance.
However, some recommended government interventions are viewed by the industry as potentially counterproductive.
Cherry argued that allowing onshore projects access to export markets could enhance domestic gas security by making more projects commercially viable.
She cautioned against recommendations to renegotiate existing domestic gas commitment agreements and implement a ‘use it or lose it’ measure for retention leases, warning that such actions could lead to instability and uncertainty.
As Western Australia faces the prospect of needing substantial new gas sources, the industry and government will need to work together to balance domestic supply with export opportunities.
The inquiry’s findings provide a foundation for future policy discussions aimed at ensuring the state’s energy security while maintaining its competitive edge in the global gas market.
