An updated gas reservation policy intends to keep a lid on bills with more supply unlocked, but critics say it could turn one of Australia’s iconic landscapes into an “industrial wasteland”.
Western Australia Premier Roger Cook announced the changes on Thursday that will apply to the state’s new onshore gas projects or existing onshore projects seeking to expand production.
“The Domestic Gas Policy has been crucial to keeping WA’s gas and electricity prices among the lowest in the nation,” he said.
“This update provides certainty for gas producers and users, helping to facilitate new onshore gas projects – creating local jobs while ensuring our energy needs are met.”
Under the revised settings, new or expanding projects must reserve 80 per cent of gas produced for the domestic market, rising to 100 per cent after five years.
Mr Cook said allowing new onshore gas fields to export a “reasonable proportion” initially would convince investors to produce more gas for decades.
The state’s 15 per cent gas reservation for offshore LNG projects remains unchanged but will be strengthened by “use it or lose it” provisions, with industry to advise a review of how it will work.
An annual WA Domestic Gas Statement will require gas producers to prove they are meeting the obligations, with its effectiveness to be reviewed after two years.
An exemption will remain in place for the “first-mover” in the vast Canning Basin, to encourage long-term development and exports from the state’s north, the premier said.
But the Lock the Gate Alliance condemned the exemption for “encouraging the dangerous fracking industry” in the state’s Kimberley region.
“Parts of the Kimberley are at risk of becoming un-liveable as the climate crisis intensifies,” spokeswoman Claire McKinnon said.
“This would turn the Kimberley’s world-renowned landscapes into an industrial wasteland,” she said.
According to documents lodged for federal approval, Black Mountain Energy’s proposal is located in the heart of the Martuwarra Fitzroy River catchment, a stronghold of the bilby and critically endangered freshwater sawfish.
A recent state parliamentary inquiry recommended onshore gas producers should be given access to the lucrative LNG export market “only if the domestic market is adequately supplied and is expected to be well supplied for a period of time”.
The Conservation Council of WA said allowing exports of new and expanding onshore gas was another step towards large-scale gas fields industrialising the state’s farms and communities.
“WA’s gas industry is driving up domestic and global emissions at a time when they need to be rapidly reducing,” executive director Jess Beckerling said.
“Gas is not a transition fuel, it’s a fossil fuel that is diverting investment away from renewable energy,” Ms Beckerling said.
Opposition energy spokesman Steve Thomas said the policy update “looks like a short-term political fix”.
Dr Thomas said it was essential for WA’s heavy industries that use gas to 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,” he said.
But he conceded the state government had provided a greater level of certainty for investors by defining the allowance for new exports, before taking it back to a complete ban.
The industry peak body, Australian Energy Producers, said the decision to open up the state’s onshore production for export – as the sector called for – would make more projects commercially viable.
