Western Australia gas policy overhaul aims to prevent looming crisis, secure energy future

Western Australia’s energy future has been dramatically safeguarded with a sweeping update to the state’s domestic gas policy, announced by Premier Roger Cook. In an unprecedented move, gas producers will now be required to reserve 80% of gas for local use until 2030, with a full 100% allocation from 2031, a decision designed to stave off severe supply shortages expected over the next decade.

This policy shift is a direct response to the growing concerns of a domestic energy crisis as Western Australia continues its transition from coal to renewable energy. The new gas reservation policy aims to balance the state’s energy needs, particularly as renewable sources like wind and solar are not yet fully capable of supporting WA’s grid. Natural gas is positioned as a critical “firming” fuel to ensure energy security, particularly as coal-fired power plants are phased out.

Premier Roger Cook stated that the policy has been pivotal in maintaining affordable gas and electricity prices in the state and would ensure a reliable energy supply for households and industries. With Western Australia holding more than 60% of Australia’s recoverable conventional gas reserves in basins such as Carnarvon and Perth, this update is seen as a vital step in securing the state’s energy needs while protecting local economic interests.

Major policy changes support energy security

The centrepiece of the updated policy is the dramatic increase in the domestic gas reservation percentage. The Cook Government’s decision to reserve 80% of gas production for domestic consumption is a significant increase from previous requirements and is designed to provide long-term stability for the energy market. Mines and Petroleum Minister David Michael highlighted the importance of this policy in boosting onshore gas projects, which will play a crucial role in bridging the gap as the state transitions to cleaner energy sources.

Industry experts have welcomed the move, stating that while WA has historically maintained some of the lowest gas prices in Australia, the anticipated shortfall in supply could have sent prices skyrocketing, impacting both consumers and businesses. The policy not only mitigates this risk but also encourages investment in new gas projects, creating local jobs and enhancing the state’s energy infrastructure.

This updated policy comes as the state accelerates its plans to transition to renewable energy, with natural gas seen as a vital bridge in maintaining energy stability. As renewable energy projects continue to expand, particularly in solar and wind, natural gas will provide the necessary reliability to ensure that the energy grid remains stable, particularly during periods of intermittent renewable production.

Balancing gas supply with green transition

The updated policy does not undermine WA’s commitment to becoming a leader in renewable energy. Instead, it recognises the need for a balanced approach. While coal-fired power stations are being phased out, and renewable energy capacity is being increased, natural gas will serve as a vital backup. Roger Cook emphasised that WA’s gas resources will be used strategically to support the state’s energy transition while also delivering substantial economic benefits through local job creation and investment.

Mines and Petroleum Minister David Michael expressed confidence that this updated domestic gas policy would ensure a robust and reliable energy market for the foreseeable future. He noted that the policy strikes a balance between encouraging onshore producers to increase gas supply and securing the state’s energy future by providing certainty to both producers and consumers.

The government is also reviewing the Petroleum and Geothermal Energy Resources Act 1967 to strengthen provisions that prevent gas companies from sitting on unused gas fields. The “use it or lose it” approach is designed to further stimulate domestic production and ensure that gas is available when needed, preventing companies from holding onto reserves without utilising them.

Expert opinion: A crucial move for WA’s energy stability

Energy experts have been cautiously optimistic about the long-term impact of this policy update. While some express concerns that an over-reliance on gas could hinder the speed of the renewable transition, many agree that in the short-to-medium term, natural gas is a critical element of the energy mix.

Industry analysts argue that this policy ensures stability while giving renewable energy time to mature and expand. With the significant investments being made in solar and wind, particularly in regional areas of WA, the hope is that by the time 2030 approaches, the state will be far less reliant on gas as a “firming” energy source. However, for now, the Cook Government’s policy ensures that WA won’t face a catastrophic energy shortfall, which could otherwise derail the renewable energy push.

In summary, Western Australia’s updated domestic gas policy is a landmark decision aimed at protecting the state from future energy shortfalls. By reserving a significant percentage of gas for domestic use and encouraging new onshore gas developments, WA is positioning itself to navigate the challenges of energy transition, all while securing affordable energy for its citizens and industries.