Western Australia's gas industry delivers domestic supply at largely stable prices, a parliamentary inquiry into the domestic gas policy has found as it called for new supply to meet rising demand.
Australian Energy Producers today pledged to work with the WA Government in its response to the Inquiry into the WA Domestic Gas Policy: Final Report to get the best outcome for the state.
Finding WA will "need substantial new sources of gas" in coming years, the Economics and Industry Standing Committee recommended the state allow onshore gas projects to export LNG only if the domestic market was adequately supplied and was expected to be for a period of time.
While the report recommended some government interventions which industry considers would be counter-productive, Australian Energy Producers welcomes the committee's view market-led responses were preferred.
Noting recent additional domestic commitments from gas companies amid tightening demand, the report found: "WA has never experienced a substantial shortfall of domestic gas and has largely avoided the price and supply volatilities which have troubled Australia's east coast."
AEP WA Director Caroline Cherry said gas companies were complying with their domestic gas commitment agreements to supply the domestic market.
"Gas companies are committed to producing reliable and affordable energy supply and the report has found they have delivered this for WA's economy," she said.
"As the committee acknowledges, industry has further demonstrated this commitment in recent months, with several companies ensuring extra supply to the domestic market."
Ms Cherry said allowing onshore projects to access export markets would help to underpin domestic gas security because it would make more projects commercially viable.
She said recommendations to renegotiate existing domestic gas commitment agreements and implement a 'use it or lose it' measure for retention leases would cause instability and uncertainty – the opposite of what is needed to ensure investment in new gas supply.
"Any changes to the DGP objectives, as proposed, should be tested with stakeholders," she said.
