Carpenter said in a statement today the Government’s existing domestic gas policy, in place since the North West Shelf project was established, needed to be maintained as new fields were developed.
“If there is uncertainty over our long-term natural gas supplies, then that would adversely affect electricity prices and investment in key economic projects,” he said.
“I totally support and promote the liquefied natural gas export industry, but I also have to ensure WA’s own energy supplies are guaranteed well into the future.”
Originally the North West Shelf Joint Venture had to reserve 4.6 trillion cubic feet of gas for domestic use. There is about 2.6Tcf remaining and WA’s annual gas consumption is 270 billion cubic feet.
The Government is still seeking feedback on a discussion paper released in February that, among other things, suggested between 10-20% of all WA offshore gas reserves be set aside for the state’s households and businesses.
Carpenter hit back at some comments made in response to the proposal, labelling them as “unnecessary” and “emotive”.
“This is a serious issue because under current domestic gas contracts, natural gas supplies for WA households and industry could run out within 10 to 15 years,” he warned.
“This process requires constructive dialogue with all the relevant parties. Personalised, emotive language will not help us achieve a mutually acceptable position.”
These comments follow a rejection of the idea by Woodside chief executive Don Voelte, who was quoted as saying the proposal was “crazy”.
Construction, Forestry, Mining and Energy Union energy division secretary Gary Wood released a statement today arguing the proposal “smacked of market manipulation and interference” and would result in long-term increases in gas and fuel prices.
“That is because there may be an initial lowering of fuel prices, there shall be no incentive for energy companies to invest in new production and just as importantly critical infrastructure like transmission lines and pipes,” he said.
“Inevitably that will lead to an increase in prices over the longer term. There is absolutely no way the government can legislate to keep gas prices at the levels they are now and into the future.
“For the gas industry, this is an economy wrecker by essentially placing downward pressure on forecast earnings through legislation requiring them to sell gas at a much lower domestic price, which in turn will cut exploration budgets.”
But yesterday, WA’s energy suppliers including Alinta and Synergy, issued a joint statement that supported the government’s proposal.
“We appreciate the export market for gas is very attractive for producers, but at the same time, we need to consider the importance of gas to our local economy,” the statement said.
