A parliamentary inquiry into WA's limits on gas exports has found it is no longer fit for purpose, and has suggested government intervention may be necessary to prevent gas shortfalls.
Introduced in 2006, the WA domestic gas reservation policy requires 15 per cent of offshore gas to be quarantined for the local market, and prevents onshore gas from being exported.
During the energy crisis in the eastern states last year, the policy was hailed as a masterstroke.
But there have been warnings of parallels between WA and the eastern states, where there have been high prices and a shortage of gas for the domestic market, prompting calls for a rethink.
The inquiry's interim report, to be tabled in state parliament this morning, says the current policy is unlikely to mitigate gas shortfalls, which it warns could threaten thousands of jobs and jeopardise billions of dollars of economic activity.
Chair of the committee conducting the inquiry, Peter Tinley, said gas producers were providing, on average, 8 per cent of their gas reserves to the domestic market – about half of what they were required to.
He said there was no evidence there would not be enough gas to keep the lights on in coming years, but that shortages could affect industries like fertiliser production that relied on natural gas.
"There is a choice here. The industry can lead itself out of this and help the people of Western Australia, or the government can step in and use a range of things, which include potentially legislation," Mr Tinley told ABC Radio Perth.
"There are other methods that they can use and it’s not up to me to say which one’s better over another."
He suggested part of the current issue was that the policy was enshrined in state agreements with individual projects, rather than in law, and that each project's terms looked slightly different.
"It started in 2006 with the Pluto project which was the first cab off the rank and so everybody was sort of making it up … it was quite new ground in public policy," Mr Tinley said.
"Now, you roll forward to Scarborough which is the latest one [and] is probably the industry-standard, which has things like compliance and breaching [terms] and all those sorts of things you might expect."
Mr Tinley said it was not right to name which projects were not complying with the policy currently, but that they likely would be identified in a final report currently slated to be published in May.
In a statement, Woodside said it "always has and will" support the needs of the WA market.
"Woodside is engaging constructively with the Cook government to ensure the WA domestic gas reservation policy continues to support energy security and confidence to invest in new supply," a spokesperson said.
"Pluto is delivering gas to WA customers today and has plans to increase this.
"This is in addition to the contribution made from the North West Shelf, Wheatstone and Macedon projects."
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