The chairman of global energy giant ExxonMobil Australia Mark Nolan today labeled the state's planned gas reservation policy as counter-productive.
The chairman of global energy giant ExxonMobil Australia Mark Nolan today labeled the state's planned 15% gas reservation policy as counter-productive.
While acknowledging Premier Alan Carpenter's commitment to address the issue of energy security during a speech in Perth today at a Committee for Economic Development of Australia lunch, Mr Nolan emphasised the importance of participating in an open market.
"While we do not support a domestic gas reservation as we think it's counter-productive, in the long-term, and will not help to promote investments, we do appreciate that the Premier has been willing to consult extensively with the industry" he said.
Mr Nolan said that maintaining participation in open, global markets and investing in technology are the means to securing Australia's energy future.
"The path of energy security lies in open, international trade, diversity of supply and the strengthening of partnerships between producing and consuming nations" he said.
Technology in developing both the demand and supply side of the LNG industry were important, he said, while reinforcing the role government policy makers play in creating stable regulatory and fiscal environments.
This stability, Mr Nolan said, encouraged other nations to engage with Australia and would ensure our continued participation in international markets into the future.
"While we are situated in a fast growing region, the fastest growing region on earth, this geographical advantage, certainly as far as gas is concerned, is diminishing as technological advantages reduce the shipping costs of LNG" Mr Nolan said.
Mr Nolan also emphasised the importance of participating in an open market, using oil as an example.
"There are many who believe energy security is an important and realistic goal and that we can somehow insulate ourselves against the international energy market."
"They may be well intentioned, but their analysis of what constitutes energy security is in my view misguided."
Pasted below is the full text of today's announcement from the Premier
Premier Alan Carpenter today released the State Government's domestic gas reservation policy to help secure Western Australia's long-term energy supplies.
The centrepiece of the policy is to set aside for domestic use the equivalent of 15 per cent of gas available from any future offshore development.
Mr Carpenter said the 15 per cent figure reflected current estimates of future domestic gas needs, estimated gas reserves and forecast Liquefied Natural Gas export production.
"The State Government will apply this policy as part of the negotiating process with export gas producers," he said.
"However, there is flexibility built into the policy to allow for each project to be negotiated on a case-by-case basis.
"This may allow producers to trade gas from other fields or negotiate a suitable timetable for delivery of gas into the WA market."
The Premier said this policy was essential to the State's long-term economic future.
"Natural gas is now the power source for 60 per cent of our electricity generation but contracted gas supplies from our North West Shelf are due to expire in 10 to 15 years' time," he said.
"We need to act now to ensure we have access to gas as an energy source for many, many years ahead.
"Domestic gas reservation has underpinned our export gas industry since its inception in the early 1980s and there is no reason why it should be abandoned.
"It has been proven over the years that the LNG export industry can work
co-operatively and effectively with the domestic gas industry."
Mr Carpenter thanked Department of Industry and Resources staff, gas producers and gas user groups for their co-operation during the policy development process.
