DomGas Chairman Tony Petersen said that the action plan should address the state’s worsening gas shortage, coupled with the highest gas prices in the country.
Proposed actions include:
- An improved exploration regime to promote domestic gas exploration
- Stringent enforcement of retention leases to maximise supply into the domestic market
- ‘Giving teeth’ to the state’s domestic reservation policy
- Removing anti-competitive joint selling arrangements
- Promoting initiatives to lower development costs, such as common-use infrastructure and open access arrangements.
Mr Petersen has urged the state Government to remove barriers to competition and supply which, according to DomGas, have distorted the market and increased domestic gas prices.
“Government endorsement of joint selling remains the single biggest barrier to competition and market development in Western Australia,” he said.
“We’ve already seen a reported 300 per cent increase in the price of gas supplied by the North West Shelf Joint Venture producers to Alinta, which supplies a wide range of industrial and residential gas users. This can only lead to higher gas and electricity costs for business and households.”
Domestic gas users also expressed alarm at a Federal Government approach giving LNG projects precedence over domestic supply in managing offshore retention leases. Mr Petersen commended the state Government for its leadership on domestic gas security.
Initiatives taken by the state in 2009 include broadening pipeline gas specification to facilitate new supply, royalty incentives for tight gas projects, and an exploration incentive program.
The Barnett Government has also endorsed the previous Carpenter Government’s 15 per cent domestic gas reservation policy.
Mr Petersen said domestic gas security was a critical challenge facing Western Australia now.
“Unless action is taken, business and households face even higher energy costs, significantly higher greenhouse emissions, and the potential for thousands of job losses.”
