❓ Question raises concerns about a potential gas shortfall and the government's response. The Premier acknowledges the issue, defends past actions, and commits to ensuring gas security for WA.
AnsweredQoN 89Legislative Assembly
QuestionView source ↗
ECONOMICS AND INDUSTRY STANDING COMMITTEE —
INQUIRY INTO THE WA DOMESTIC GAS POLICY: INTERIM REPORT
89. Mr R.S. LOVE to the Premier:
I refer to the interim
report into domestic gas tabled by the Economics and Industry Standing
Committee that states —
The Australian Energy Market
Operator (AEMO) has forecast that Western Australia will experience a shortfall and there is no indication that AEMO
is incorrect. Thus, there is a credible risk that the State will face a substantial
gas supply shortfall starting in the near term and continuing for most of the
next decade.
I note that former Minister for Energy, the member for
Cannington, repeatedly ignored warnings of such a shortfall from AEMO writing
them off as simply a prediction.
(1) Does the
Premier accept responsibility for this potentially severe shortfall, noting
that he allowed his former minister to continually reject concern and make no
effort to address the looming shortfall that could cripple industry and put our
energy security at risk?
(2) Noting
that the report canvasses retrospectively amending state agreements and price
caps on gas, are those suggestions he will be seriously considering?
INQUIRY INTO THE WA DOMESTIC GAS POLICY: INTERIM REPORT
89. Mr R.S. LOVE to the Premier:
I refer to the interim
report into domestic gas tabled by the Economics and Industry Standing
Committee that states —
The Australian Energy Market
Operator (AEMO) has forecast that Western Australia will experience a shortfall and there is no indication that AEMO
is incorrect. Thus, there is a credible risk that the State will face a substantial
gas supply shortfall starting in the near term and continuing for most of the
next decade.
I note that former Minister for Energy, the member for
Cannington, repeatedly ignored warnings of such a shortfall from AEMO writing
them off as simply a prediction.
(1) Does the
Premier accept responsibility for this potentially severe shortfall, noting
that he allowed his former minister to continually reject concern and make no
effort to address the looming shortfall that could cripple industry and put our
energy security at risk?
(2) Noting
that the report canvasses retrospectively amending state agreements and price
caps on gas, are those suggestions he will be seriously considering?
AnswerView source ↗
(1)–(2) I think we nearly used up the entire
question time on that question! This is an important issue, so let me put some things on the record. The member for
Cannington was technically correct. AEMO makes a prediction on the basis of current available gas and
projected demand. It does not take into account projected increases of
supply. As many of my colleagues and I have observed on many occasions, the
member for Cannington is annoyingly right quite often—and on this one
he was right as well. That does not mean that we do not have a serious
situation with regard to ensuring that Western Australians have available gas
that is both reliable and affordable, and to make sure that we can secure our
energy supplies into the future.
I
commend the parliamentary committee for making some important observations
about the delicate balance with which
our domestic gas arrangements continually play. As I have emphasised on dozens
of occasions, firstly, this is quintessentially WA Labor policy. It was
first crafted by former Premier Alan Carpenter when he demanded that all
offshore oil and gas projects have an obligation to reserve 15 per cent of
their offtake for the domestic gas market.
The second iteration was under former Premier McGowan, which was then to
say that 100 per cent of domestic gas plays should be set aside for the
domestic market. These are incredibly important policies that have put Western Australia
in great stead, and, combined with the fact that we have stopped the opposition
privatising Western Power, it means that Western Australians are not exposed to
the crazy situation they have on the east coast. There, privately owned
transmission companies combined with
privately owned generation companies are royally screwing the people of New
South Wales , Victoria and Queensland, which is the reason they are
seeing such large increases in their electricity bills—in some cases,
increases of 25 per cent. In Western Australia, our energy tariff increases are
less than the rate of inflation. In real terms, that is a reduction in the cost
of electricity to Western Australians. This is off the back of strong WA Labor
policies and particularly our domestic gas reservation policy. This is borne
from the principle that we hold dear; that is, Western Australia's gas
belongs to Western Australians, and they are the ones who should first and
foremost benefit from the exploitation of that gas. But we know that the energy
market is changing significantly and quickly. That is a result of the energy
transition, which will see gas playing an integral role in the smooth pathway
towards a green energy future. We need to make sure that our gas reservation
policy is fit for purpose, but the oil and gas companies must understand that Western
Australians are the priority, and each and every one of them must meet their
obligations to ensure that Western Australians are the key beneficiaries.
The
parliamentary committee has appropriately guided us and said that our domestic
gas reservation policy should be fit for purpose. We agree, and we shall
continually monitor that policy to make sure it ensures that Western Australians
are the fundamental beneficiaries of our natural endowment of gas. It is simply not good enough that some of the companies
are not meeting this requirement. We will examine all options , including looking at legislative options, and work
with companies to ensure that they meet their obligations.
We will continue to engage with gas
users, particularly the customers of the gas producers, and we will work with
gas producers on how our domestic gas policy can continue to support affordable
and reliable energy, local jobs, and our path towards net zero. I am signalling
that, for my government, all options are on
the table. We will do what is right for Western Australia, we will do what is
right for Western Australian families and workers, and we will continue
to make sure that the domestic gas reservation policy works in the interests of
WA.
question time on that question! This is an important issue, so let me put some things on the record. The member for
Cannington was technically correct. AEMO makes a prediction on the basis of current available gas and
projected demand. It does not take into account projected increases of
supply. As many of my colleagues and I have observed on many occasions, the
member for Cannington is annoyingly right quite often—and on this one
he was right as well. That does not mean that we do not have a serious
situation with regard to ensuring that Western Australians have available gas
that is both reliable and affordable, and to make sure that we can secure our
energy supplies into the future.
I
commend the parliamentary committee for making some important observations
about the delicate balance with which
our domestic gas arrangements continually play. As I have emphasised on dozens
of occasions, firstly, this is quintessentially WA Labor policy. It was
first crafted by former Premier Alan Carpenter when he demanded that all
offshore oil and gas projects have an obligation to reserve 15 per cent of
their offtake for the domestic gas market.
The second iteration was under former Premier McGowan, which was then to
say that 100 per cent of domestic gas plays should be set aside for the
domestic market. These are incredibly important policies that have put Western Australia
in great stead, and, combined with the fact that we have stopped the opposition
privatising Western Power, it means that Western Australians are not exposed to
the crazy situation they have on the east coast. There, privately owned
transmission companies combined with
privately owned generation companies are royally screwing the people of New
South Wales , Victoria and Queensland, which is the reason they are
seeing such large increases in their electricity bills—in some cases,
increases of 25 per cent. In Western Australia, our energy tariff increases are
less than the rate of inflation. In real terms, that is a reduction in the cost
of electricity to Western Australians. This is off the back of strong WA Labor
policies and particularly our domestic gas reservation policy. This is borne
from the principle that we hold dear; that is, Western Australia's gas
belongs to Western Australians, and they are the ones who should first and
foremost benefit from the exploitation of that gas. But we know that the energy
market is changing significantly and quickly. That is a result of the energy
transition, which will see gas playing an integral role in the smooth pathway
towards a green energy future. We need to make sure that our gas reservation
policy is fit for purpose, but the oil and gas companies must understand that Western
Australians are the priority, and each and every one of them must meet their
obligations to ensure that Western Australians are the key beneficiaries.
The
parliamentary committee has appropriately guided us and said that our domestic
gas reservation policy should be fit for purpose. We agree, and we shall
continually monitor that policy to make sure it ensures that Western Australians
are the fundamental beneficiaries of our natural endowment of gas. It is simply not good enough that some of the companies
are not meeting this requirement. We will examine all options , including looking at legislative options, and work
with companies to ensure that they meet their obligations.
We will continue to engage with gas
users, particularly the customers of the gas producers, and we will work with
gas producers on how our domestic gas policy can continue to support affordable
and reliable energy, local jobs, and our path towards net zero. I am signalling
that, for my government, all options are on
the table. We will do what is right for Western Australia, we will do what is
right for Western Australian families and workers, and we will continue
to make sure that the domestic gas reservation policy works in the interests of
WA.
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