WA gas users warn Labor not to repeat flaws in state reservation scheme

Gas users in Western Australia are sounding a clear warning to the Albanese government: do not replicate the mistakes made with the state's domestic gas reserve policy. As the federal government prepares to unveil details of its proposed national scheme, which includes a 20 percent domestic gas reserve, WA consumers are adamant that transparency and enforcement must be paramount. This perspective is rooted in the state's own experience, where the policy, introduced in 2006, has faced significant criticism for failing to deliver on its promise of adequate domestic supply.

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take the rose-coloured glasses off

The core of the concern lies in the lack of public disclosure and robust compliance mechanisms within the WA model. Commitments made by gas companies are often buried in private state agreements, making it difficult to verify if the required 15 percent of export volumes are truly being set aside for local consumption. A recent parliamentary inquiry highlighted that, on average, only about eight percent of domestic gas has been supplied relative to exports, revealing a significant gap between the policy's intent and its actual delivery. Lobby groups representing major WA gas consumers, such as Alcoa and Wesfarmers, point to specific projects where domestic supply has fallen drastically short of obligations.

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historic and ongoing shortcomings

From a Western Australian viewpoint, the federal government's eagerness to build upon the "success" of the WA model, as stated by Prime Minister Anthony Albanese, is met with skepticism. While the principle of a domestic reserve is sound, the implementation in WA has been plagued by issues of transparency and enforcement. The warning is clear: a national scheme must learn from these "historic and ongoing shortcomings" to avoid similar pitfalls. The potential for an oversupply of gas, as feared by major LNG exporters, also adds another layer of complexity, with concerns that lower prices could stifle investment in crucial new projects needed to meet future demand. This debate underscores the delicate balance required between ensuring domestic energy security and maintaining a competitive and attractive investment environment for the energy sector.

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There are many pointing at us to say we are the model of success, but a 2024 parliamentary inquiry found while WA got the principle right, it was falling short on delivery, transparency and enforcement.