gas shortage

An article in the west web page

Perth businesses and homeowners face decades of gas shortages and big mining projects are likely to be put off because not enough gas supply was being developed, some of WA's biggest businesses have warned.

Based on a new report, the DomGas Alliance said thousands of jobs could go and projects worth up to $25 billion a year put at risk unless the market was opened to competition and more projects were developed.

The alliance, which included Fortescue Metals, Alinta and Alcoa, is fighting to break up the domestic gas selling arrangements on the North-West Shelf and to ensure gas is available for domestic users.

The report, compiled by Perth-based Economics Consulting Services, said there was already a shortage based on current and expected gas production and demand from existing businesses and planned projects.

By 2020, if production fell and demand increased as expected, WA faced a shortage of up to 600 terajoules of gas a day or half WA's current gas consumption.

The problem is falling North-West Shelf production, new fields failing to supply enough gas to the domestic market and expected big demand increases, especially from Mid-West mining projects.

DomGas chairman Tony Petersen said it was clear the State economy would suffer if nothing was done to boost gas supplies.

The biggest shortfall could be from next year until 2015 when the massive Gorgon LNG project is expected to start supplying the market.

The report says projects worth $46 billion in construction costs with up to 20,000 ongoing jobs will need natural gas access. Those projects, worth $25 billion a year in output, were at risk unless more gas was supplied to the domestic market.

The report found the Varanus Island explosion, which cut supplies to WA for two months, cost the State economy about $2 billion.

Mr Petersen said the State and Federal governments needed to improve domestic gas reservation policies, impose supply obligations and dump joint marketing.