Parliamentary inquiry finds that WA’s domestic gas supply is ‘no longer fit-for-purpose’

WA’s domestic gas settings are “no longer fit-for-purpose”, according to a Parliamentary inquiry that is preparing to hand down its interim report into the flagship policy. In a statement released ahead of the tabling of the document — expected to happen about 10am on Thursday — the economics and industry standing committee wrote that it “believes there is now a case for government intervention”. The inquiry, which has been running since mid-2023, is examining the continued effectiveness of WA’s domestic gas policy that requires LNG exporters to provide 15 per cent of the total volume of their projects to the local market. However, the committee has heard testimony from companies heavily reliant on gas about difficulties securing long-term supply contracts from the likes of Woodside and Chevron, and a lack of information about the amount of gas available. The interim report will not make any recommendations but flags that the committee has formed a view that serious government action is required. “Application of the policy in its current form is unlikely to mitigate an imminent and potentially severe gas supply shortfall,” the committee said. “This shortfall is likely to threaten thousands of WA jobs, jeopardise billions of dollars’ worth of economic activity and derail the State’s decarbonisation agenda. “Although the policy’s principles are intended to protect Western Australians from situations like these, it is clear to the committee that the policy is not robust enough to ensure that an adequate supply of gas will be delivered to the domestic market. “The committee is also aware that there is considerable variation in the amounts of domestic gas delivered by LNG producers relative to their LNG exports. “The State has relied on LNG producers to do right by Western Australians in adhering to the principles and spirit of the policy. “However, the committee believes there is now a case for government intervention.” One of the avenues open to the Cook Government is to amend the domestic gas policy so that LNG exporters are required to provide 15 per cent of their annual production to the local market. It would address the current situation that results in some projects withholding gas from the domestic market when international LNG prices are high. The committee statement makes no mention of changes to the blanket ban on exporting gas produced onshore. Premier Roger Cook has previously flagged that he was considering amending that approach in the face of arguments from industry that it is acting as a handbrake on the development of new projects in the Perth Basin.