Support for domgas review

Liberal Leader Libby Mettam calls for review of ban on export of onshore gasJosh ZimmermanThe West Australian11 January 2024 Liberal Leader Libby Mettam wants a review of the blanket ban on the export of onshore gas, suggesting there is bipartisan support for a major overhaul of WA’s flagship domestic energy policy. Amid increasingly dire warnings about imminent shortages of gas – which will be critical to replace coal in the State’s primary power grid – Ms Mettam said WA needed “policies to support investment in supply”. Her comments come after Premier Roger Cook late last year flagged he was considering lifting the prohibition on exporting gas extracted onshore. “Gas producers need overseas investment to develop our gas fields and without export opportunities those investment dollars dry up,” Ms Mettam said. “This has also been exacerbated by Federal and State Labor’s approvals process which has held up future projects with excessive red tape. “A mandated review of the policy, for example every five years, could be undertaken to ensure it is best serving the state’s needs. “The success of policies such as this lies in their ability to adapt to changing global and domestic conditions.” WA’s signature domestic gas reservation policy requires 15 per cent of all LNG produced offshore to be supplied to the local market. However, onshore projects – such as those under consideration in the Perth Basin – are not permitted to export at all. In submissions to an ongoing parliamentary inquiry examining the effectiveness of the reservation scheme, multiple major gas players – including Woodside and Mineral Resources – advocated for onshore developments to be permitted to also sell some of their product overseas. They argue export rights would improve the commercial viability of new projects currently under consideration, which are required to safeguard local supply. “The Liberal Party supports a review of the State’s onshore reservation policy to ensure it is working in WA’s best interests,” Ms Mettam said.“Our priority will always be ensuring there is adequate supply for our domestic market, however we also need policies to support investment in gas supply.” Shadow energy minister Steve Thomas said predicted shortfalls were a “problem of the Government’s own making” after the 2020 decision “to formalise what was already a standing practice to prevent onshore gas being exported”. “The McGowan Government was good at deluding itself that the energy system in this state was perfect until a number of reports came in dispelling this myth,” Dr Thomas said. “The (parliamentary inquiry) is likely to find that some export of onshore gas is needed to underwrite the business cases of new projects, but meeting the needs of domestic gas users is also critical.” In an end-of-year interview, Mr Cook said WA’s domestic gas settings were a “live issue” and he wanted to have a “conversation with industry” about potential changes – including lifting the onshore export ban. “What some (companies) are telling us is that in order to make sure that their facilities are commercial, they need early cash flows, which can be brought on by early exports to the international market where they enjoy a higher price,” the Premier said. “And so we need to obviously have a conversation with them about what those dynamics look like. “At the end of the day, the fundamental principle is it’s Western Australian gas so Western Australians should benefit from it. “But it’s no use having a domestic gas reservation policy if it means that domestic gas does not come to the market – and if that means that we have to continue to review that policy, we will.”