Government Domestic Gas review welcomed but needs to have transparency

The Government’s update to its domestic gas policy released today provides a modest and temporary easing of restrictions for onshore gas producers that must be accompanied by transparency according to the Shadow Minister for Energy Dr Steve Thomas.

“A recent Parliamentary Committee recommendation that the 15% offshore reservation policy be retained was one I supported, and it has now also been supported by the Government, and I think by most of the state” Dr Thomas said.

“The Committee left open the question on whether onshore gas producers should be given access to the LNG export market so that they can achieve higher prices for their product, recommending that “the State Government allow onshore gas projects to export LNG only if the domestic market is adequately supplied and is expected to be well supplied for a period of time.”

“The State Government has provided a greater level of certainty today by defining the allowance for new and expanded projects to export into the LNG market at up to 20% for the next six years, before taking it back to a complete ban from 2030.

“In doing so the Government has delivered a degree of flexibility and certainty that onshore producers will welcome for the next six years, but the onshore gas industry may hit exactly the same problems after that.

“I am not sure what measure the Government used to determine that new onshore gas projects would need access to the more lucrative export market from 2025 to 2030 but would not need the same access from 2030 onwards. It looks like a short term political fix.

“At the same time domestic gas users need the same level of certainty that they will be able to access the gas they need. It is essential that those industries that use gas in Western Australia can access adequate supplies.

“This was highlighted by the Gas Statement of Opportunities released  by the  Australian Energy Market Operator last December that suggested we will be short 105 Petajoules of gas up until 2026.

“Today’s response allowing onshore export needs to stimulate projects that will fill that projected shortfall.

“Critically the Government will have to ensure that there is transparency for both the Parliament and the public that domestic supply will be “adequately supplied” into the future.

“Given the lack of transparency generally displayed by the Government generally, and in places like the coalfields in particular, it will not be sufficient to keep the details secret and ask us to take them on trust.”