DomGas and The Australian Petroleum Production & Exploration Association remain at odds over domestic gas reservation policy, having made opposing statements in their submissions to the WA Strategic Energy Initiative directions paper.
DomGas and The Australian Petroleum Production & Exploration Association remain at odds over domestic gas reservation policy, having made opposing statements in their submissions to the WA Strategic Energy Initiative directions paper.
APPEA is disappointed that mandatory domestic gas reservation will remain as part of the directions paper, a view contrasted by DomGas, which is in support of the policy.
"The domestic gas reservation policy is not only unnecessary, it is counterproductive. Imposing a large economic cost on gas producers by requiring one industry to subsidise the input costs of others can only lead to less investment, less supply and higher gas costs in the longer-term," APPEA's WA director Stedman Ellis said.
"Contrary to the claims of some large industrial users, mandated gas reservation is not required to secure domestic gas supply. SEI projections show forecast supply is sufficient to meet the demand.
"The gas industry welcomes the policy principles in the Directions Paper that recognise that an efficiently operating market - rather than government intervention that masks price signals - is the key to ensuring that West Australians have access to long-term, secure supplies of competitively priced energy."
Meanwhile, DomGas said "domestic gas reservation remains, by far, the single most effective policy available to the Government to promote supply and reduce prices."
DomGas suggested a 15 per cent commitment should be applied on all existing and potential LNG reserves, including the North West Shelf Project remaining reserves, the Gorgon expanded reserves, Browse, Wheatstone and Scarborough.
"The commitment should be made unconditional and enforced as part of producers' licence to operate in Western Australia," the organisation said.
The organisation also said a Gas Market Monitor should be established to oversee the domestic gas market and to ensure rigorous enforcement of the State's reservation policy.
DomGas broadly supports the key initiatives proposed by the paper, and is keen to see the North West Shelf Joint Venture maintain domestic gas supply at the current levels until 2025.
The state's peak energy user group also supports the elimination of joint marketing arrangements by 2015, which would see the abolition of collective selling arrangement of the six joint venture partners of the North West Shelf including Shell and Chevron.
WA's Chamber for Commerce and Industry was largely supportive of the paper in its submission, and highlighted the need for more holistic government approach to achieving efficient, cost competitive and clean energy supply.
"Planning for our future energy infrastructure is also important, but this needs to form part of a wider strategic plan for the economic development of the state," CCI said.
"Long term strategic policy goals are all too often created in isolation - or not considered at all. Energy, being such an important part of our economic development, should form the basis for longer term planning around issues such as water, project approvals, taxation, and labour and skills shortages."
CCI said continuity, security and emergency planning aspects of energy infrastructure are also vital and that there is a particular need to review and strengthen the security aspects of WA's energy assets especially in the North West of the state.
"Meanwhile, our reliance on a small number of major infrastructure assets to supply our domestic energy needs also underscores the need for more investment in large scale energy storage in the state," CCI said.
