WA to hold back gas
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Western Australia is adjusting gas exports in an attempt to secure local energy and jobs.
The Cook Labor Government has unveiled changes to its domestic gas policy, requiring 80 per cent of onshore gas production to be reserved for domestic use until 2030, rising to 100 per cent after that.
“Our gas belongs to Western Australians,” said Premier Roger Cook, emphasising the policy's role in ensuring energy security during the state’s transition to renewables.
Limited gas exports - up to 20 per cent - will be allowed until 2030, a shift designed to spur new gas projects by giving producers access to international markets.
From 2031, the policy requires all onshore gas production to serve WA exclusively.
Cook said gas is essential for phasing out coal-fired power, and that it would “help [WA] to become a global renewable energy powerhouse”.
However, the move has sparked concerns in the industry.
Energy consultants have warned that increased exports could raise local gas prices, under the belief that domestic prices rise to meet international prices.
WA's 15 per cent reservation for offshore LNG projects remains unchanged, and the Waitsia project will keep an export permit granted under a COVID-19 exemption.
Additionally, a ‘first mover’ exemption in the Canning Basin also stays, aimed at driving northern gas development.
The government will also enforce “use it or lose it” provisions to prevent land banking and ensure more gas reaches the domestic market.
A review of the Petroleum and Geothermal Energy Resources Act 1967 will determine how best to apply these rules.
Despite some level of industry support, insiders suggest mining bosses may be displeased with export limits.
Meanwhile, transparency remains an issue, with some producers reportedly supplying only 8 per cent of their required gas to the local market.
The government says it will release an annual Domestic Gas Statement to monitor compliance and may legislate if needed.