New research from energy analysts Sustainable Energy Now and Climate Safe Solutions shows that excess LNG export capacity at Woodside's Burrup Hub, and a lack of timely renewable energy development, are shaping up as major threats to WA's domestic gas supply and local energy consumers.
The report's release comes as a Parliamentary Inquiry into WA's domestic gas policy announced the last minute shelving of its Final Report, which had been due to be tabled in Parliament this morning, to allow the Economics and Industry Committee more time to consider submissions, including this report from Sustainable Energy Now.
The Sustainable Energy Now report (attached), From Provider to Parasite: Excess LNG export capacity and state energy policies as emerging threats to WA's domestic gas market, environment, and economy, finds that Woodside's Burrup Hub is beginning to transition from a modest provider to a huge net taker of gas from the WA domestic gas market.
The modeling reveals that Woodside's massive North West Shelf facility will increasingly rely on large volumes of gas from WA's onshore domestic reserves to meet its export demand, which dwindling yield from offshore gas fields will be unable to meet.
Report author Piers Verstegen of Climate Safe Solutions said:
"Contrary to Woodside's PR campaign, Burrup Hub is already becoming a parasite on WA's domestic gas reserves and will increasingly compete directly with domestic gas users in the state.
"Without urgent action from the Cook Government, the WA gas market will follow the same pattern as in the East, with higher prices for consumers as LNG exporters make huge profits by sucking gas out of the domestic market for sale in spot markets overseas."
"The Cook Government must take urgent action to protect WA's domestic gas reserves from LNG exporters. This must start with denying Woodside approval to extend the North West Shelf facility to export WA's domestic gas."
"At the same time, we need a strategy to dramatically scale up the production of low cost renewable energy to replace the use of gas in WA."
Sustainable Energy Now Acting Chair Dr Rob Phillips said:
"There are many examples where renewable electricity can replace gas use in household, commercial and industrial settings at a lower cost, however the lack of support for renewable energy development is currently holding these opportunities back.
"The growing demand for gas from LNG exporters and lack of renewable energy is not just hurting consumers in WA. It is also driving up carbon pollution, making the state less competitive and less attractive for investors wanting to access cheap, clean energy."
"Most policies to date have been focused on the supply of gas to the domestic market, but the reality is we are facing very large excess demand - especially from gas exporters, who are already exporting 90% of the gas produced in WA.
"Exporting LNG is the lowest value use for our state's gas resources. Per unit of gas used, the LNG export industry delivers less jobs and less revenue than any other industry. This means that every tonne of gas that is exported from our domestic reserves comes at a cost to WA consumers and a cost to the WA economy."
The analysis identifies a number of critical actions that are necessary to protect WA businesses and consumers from higher energy bills and address the growing pollution from gas use in WA. These actions include:
- Deny Woodside's request for unlimited approvals to export WA domestic gas through the North West Shelf extension.
- Place a permanent ban on any further export of WA's domestic gas reserves.
- Scale up renewable energy generation in WA to replace gas demand.
- Develop a plan to phase out the use of gas in the WA domestic market in the medium-term.
