Energy white paper flawed: DomGas

WA's peak energy user group, DomGas Alliance, says the federal government's white paper into energy security is "flawed" as it focuses on maximising exports rather than domestic energy use.

The announcement is below:

Western Australia's peak energy user group has expressed grave fears over the Federal Government's Energy Security White Paper process.

DomGas Alliance Chairman Stuart Hohnen said that while the original intent of the White Paper was energy security for Australian industry and households, the thrust of the whole initiative has been diverted to promoting the export of energy.

"The Federal Government's own definition of energy security is about meeting the energy needs of the Australian community and industry - both in the short and long term," Mr Hohnen said.

"But when you look at the White Paper's Terms of Reference, its major focus has changed to maximising Australia's energy exports to the rest of the world."

Mr Hohnen said this lack of balance in the paper was due to the membership of the Consultative Committee established by the Federal Government to oversee the White Paper.

Major energy exporters make up eight out of the ten industry representatives. Australian industry and households, for whom energy security is a matter of vital importance, only account for two positions on the Committee.

"Developing a long term energy security strategy for Australia requires difficult policy choices," Mr Hohnen said.

"These choices include balancing the commercial interests of energy exporters with the long term needs of the local economy."

"It is alarming that the process that was intended to secure Australia's energy resources for the next 30 years has focused on meeting the energy security needs of other countries to the detriment of the domestic market."

Mr Hohnen was strongly critical of the National Gas Security Assessment released by the Department of Resources, Energy and Tourism. The Assessment had found that while natural gas prices had risen, they were still low by international standards.

"This finding is completely at odds with market reality in Western Australia," Mr Hohnen said.

"At recent prices, consumers are paying more for natural gas than in most other gas producing countries in the world."

"The flawed assessment underlines the extent to which big energy exporters have captured government thinking on energy security."

According to press reports of recent contracts, WA wholesale gas prices have risen four to five-fold over the past 18-24 months. This has seen wholesale gas priced at around A$14-16 per gigajoule before transport costs. Current domestic gas prices in the United States are around $US 4 per gigajoule.

Mr Hohnen said the DomGas Alliance was finalising a major report on Western Australia's gas security.

The report will identify key challenges to gas security and propose a plan of action for the Federal and State governments to ensure the Western Australia's future gas needs.