New Australia Institute analysis shows that Woodside's North West Shelf (NWS) Extension proposal represents a major threat to WA's domestic gas market.
The proposal is seeking approval from WA Environment and Energy Minister Reece Whitby.
Today The Australia Institute is joined by two former WA premiers, Carmen Lawrence and Peter Dowding, and oil and gas industry expert Tim Forcey to highlight the threat posed by Woodside's proposed export expansion.
Woodside has not identified sufficient new gas supply to meet the export capacity of the LNG facility. The resulting shortfall could see further WA domestic gas diverted to export markets.
Key Findings:
- 90% of the gas processed in WA is either exported as LNG or used in LNG export processing.
- The NWS proposal would extend operation of Australia's largest LNG facility for 50 years.
- The NWS facility's export capacity is more than double the state's domestic demand and is seeking approval without any approved new offshore gas supply.
- All previous WA LNG projects have identified supply sufficient for their export capacity.
- This situation of un-supplied LNG export capacity gives Woodside a huge incentive to pursue domestic supply and destabilise the WA gas market for decades to come.
"We have seen this play from the gas industry before. The Queensland LNG terminals opened in 2015 and threw the east coast gas market into turmoil. You have to ask the question, why would the WA government want to replicate that mistake?" said Tim Forcey, former manager at Exxon Mobil, BHP, Jemena, gas planning principal at AEMO and energy academic at the University of Melbourne.
"This analysis raises serious concerns about the impact of the proposed extension to the North West Shelf export facility. No decision should be made until the impacts on Western Austrian domestic gas supply and prices have been thoroughly investigated," said Carmen Lawrence, former WA Premier.
"Woodside's success rests largely on enormous subsidies from Western Australian taxpayers. Now, when Western Australians need their gas, Woodside seems intent on exporting as much of it as possible and charging Western Australians as much as possible for our own gas. No decision should be made without a thorough inquiry into the impacts on Western Australia's domestic gas market," said Peter Dowding SC, former WA Premier.
"Approving the North West Shelf's 50-year gas extension will create an enormous incentive to export even more domestic gas, driving up energy bills for Western Australians," said Mark Ogge, Senior Researcher at the Australia Institute.
"Woodside's interests do not align with Western Australia's interests. Western Australians want gas at reasonable prices. Woodside wants to charge as much as possible, so will always prioritise the export market and aim to increase domestic prices.
"Governments' first priority is to the people who elect them, the people of Western Australia. They work for us, not Woodside. It is our gas, not Woodside's.
"Approving the North West Shelf extension would create a significant incentive for Woodside to hoover up Western Australia's domestic gas supply for half a century, leaving the state and our climate significantly worse off.
"The Government's recent policy announcement that it will allow 20% of new onshore gas projects to be exported by Woodside is yet another erosion protections for WA's gas market. The limit of 20% and the end date of 2030 are not legislated and can be changed any time, so provide little protection for the WA gas market."
