Updates to Western Australia’s Domestic Gas Policy are intended to secure a strong economic future for the state and support affordable energy, local jobs and the economy as it transitions to a clean energy future.
Under the updated Domestic Gas Policy, onshore gas projects will be required to reserve 80 per cent of gas production for Western Australian domestic use up until 31 December 2030, after which projects will be required to reserve 100 per cent for the local market.
Allowing new gas projects to export a reasonable proportion of production over the next five years is set to help stimulate development while Western Australia’s gas market is balanced. It is also expected to ensure more gas is brought to market in decades to come – helping the state continue its transition to renewable energy, backed by gas as a firming fuel.
The revised policy will apply to new onshore gas projects or existing projects seeking to expand production. An exemption will remain in place for the ‘first-mover’ in the Canning Basin, to encourage development in the state’s north.
The Waitsia project will retain its domestic gas reservation obligations and export permit issued under the 2020 COVID-19 exemption. However, the state will consider options to facilitate other gas producers’ sharing of their infrastructure, providing faster access to the market for new projects.
Western Australia’s successful 15 per cent reservation for offshore LNG projects remains unchanged.
To further accelerate onshore gas developments, the Western Australian Government has also committed to strengthening the use of ‘use it or lose it’ provisions in the Petroleum and Geothermal Energy Resources Act 1967.
This change will help prevent the land banking of onshore petroleum tenements and ensure that more gas is brought to market over the coming decade.
The Department of Energy, Mines, Industry Regulation and Safety will conduct a review of the legislation to determine how best the strengthened ‘use it or lose it’ policy can be implemented.
The State Government will also deliver more transparency around the Domestic Gas Policy. It has worked with the industry to publish an annual Western Australian domestic gas statement showing how gas producers are meeting their domestic gas obligations.
The statement’s effectiveness will be reviewed after 24 months, with the Government to consider legislating the transparency measure if required.
The update follows a review of the policy led by the State Government over the past nine months, including detailed industry consultation. It is part of the government’s response to the Western Australia Parliament Economic and Industry Standing Committee’s Inquiry into the state’s Domestic Gas Policy.
Western Australian Premier, Roger Cook, said, “Our gas belongs to Western Australians, and I want to make sure we maximise the benefit to our state from our gas resources.
“As we phase out coal-fired power and transition to a renewable energy future, Western Australia needs a secure supply of gas as firming fuel in our system and to help us to become a global renewable energy powerhouse.
“The Western Australian Government’s Domestic Gas Policy has underpinned Western Australia’s economic success over the past decade, and under my government, the policy will set up our state for our clean energy future.”
Mr Cook said the update provides certainty for gas producers and users, helping to facilitate new onshore gas projects – creating local jobs while ensuring our energy needs are met.
“The Domestic Gas Policy has been crucial to keeping Western Australia’s gas and electricity prices among the lowest in the nation.
“Our policy supports affordable, reliable energy for Western Australian households and businesses into the future.”
Western Australian Mines and Petroleum Minister, David Michael, said the policy changes are sensible responses that balance the need for Western Australia to secure its energy future, while encouraging onshore producers to bring on more gas supply as and when needed.
“Gas has an important role to play in our economy as we transition to renewable energy sources, and the Western Australian Government’s Domestic Gas Reservation Policy will continue to guarantee a reliable supply.
“I look forward to the outcomes of DEMIRS review of the Petroleum and Geothermal Energy Resources Act 1967 to determine how best we can strengthen the ‘use it or lose it’ policy to ensure it remains fit for purpose.”
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