The state opposition lashed the politicisation of the state’s energy future, ahead of Premier Roger Cook’s new domestic gas policy for onshore producers announced today.
Mr Cook announced changes which will allow producers to export 20 per cent of produced gas as LNG from new and expanded onshore developments like those in the Perth Basin.
The export allowance is temporary, reverting to a 100 per cent domestic supply arrangement from 2030 – when the state plans to retire coal-fuel generation in the electricity grid.
The changes will ease tension on one side a politically charged debate around the state’s gas settings, with several of the state’s most prominent billionaires and businesspeople plying their trade as gas developers in the state’s pre-eminent onshore development basin near Dongara.
Among them are Chris Ellison’s Mineral Resources, Gina Rinehart’s Hancock Energy, John Poynton-chaired Strike Energy and Kerry Stokes-backed Beach Energy as part of the Waitsia joint venture.
Waitsia has been a sticking point, with the project a recipient of an LNG export exemption from former premier Mark McGowan in 2020 before the rules were changed on the region’s other developers in mid-2023.
Some, like Mr Ellison’s MinRes, have held off final investment decisions pending regulatory clarity – something the Premier will hope today’s imminent decision delivers.
Speaking ahead of the announcement, opposition energy spokesperson Steve Thomas suggested the decision had been made in the interests of short-term political gain.
“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,” he said.
“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.”
Domestic gas users have been represented in the debate by the DomGas Alliance, which has fought hard for the right to access full supply of onshore produced gas as a feedstock for industrial uses and for energy supply.
The alliance appeared to have the support of the recently completed parliamentary inquiry into the state’s domestic gas settings, which recommended to government that the state allow onshore projects to export LNG only when the domestic market is adequately supplied.
The Australian Energy Market Operator forecast a gas shortfall as soon as 2026 in its market projection released in the final weeks of 2023.
Some developers have countered the shortfall argument by suggesting international market access will allow them to develop larger projects which will ultimately supply more gas into the local market.
Gas industry lobby group Australian Energy Producers issued a statement this morning hailing the premier’s decision.
“The Cook government has listened to the concerns of industry about ensuring reliable and affordable energy for the state and pulled the levers to bring on more new gas supply to serve rising demand for gas in coming years,” AEP WA director Caroline Cherry said.
“More gas will be needed to serve rising demand supporting renewables in electricity generation as coal is phased out while underpinning the economic benefits produced by the mining sector as a key power source.
“Exports deliver important economic benefits for WA and also support the domestic energy security the state has enjoyed for decades because of the industry’s commitment to providing energy for this region.
“The government has again shown it understands the importance of new gas development and how to extract the economic benefits of this cleaner fuel on the journey to net zero.”
