Western Australia's major energy suppliers including Alinta and Synergy have effectively come out in support of the state goverment proposal to reserve a portion of the State's gas reserves for domestic use.
Western Australia's major energy suppliers including Alinta and Synergy have effectively come out in support of the state goverment proposal to reserve a portion of the State's gas reserves for domestic use.
Their stance contrasts with gas producers like Woodside, which believe the proposal could undermine the commerciality of new projects.
The gas producers are concerned that reserving gas for the domestic market will stop them selling into export markets at higher prices.
In a joint statement, Synergy, Alinta, Energy Developments, Burns and Roe Worley and NewGen Power said the state government was to be commended for initiating debate about the future of WA's domestic gas supplies.
"We appreciate the export market for gas is very attractrive for producers, but at the same time, we need to consider the importance of gas to our local economy," the statement said.
The full statement is pasted below:
JOINT MEDIA STATEMENT FROM
Synergy
Alinta
Energy Developments Limited
Burns and Roe Worley
NewGen Power
27 July 2006
INFORMED DEBATE NEEDED ON DOMESTIC GAS SUPPLIES
The future of gas supplies for domestic use is a critical issue for Western Australia, and the state government is to be commended for initiating debate about the future of Western Australia's domestic gas supplies.
At this point in time there is not sufficient gas being offered and there is no diversity of suppliers to create some downward price pressure.
Debate about the future supply of gas for domestic use needed to take into consideration the implications for the Western Australian economy.
The Department of Industry and Resources is currently considering the issue of future gas reservations for domestic use.
The subject of gas suppliers making sufficient gas available, and from a diverse range of sources, is a crucial issue for Western Australian industry and the state's energy security.
We need to be assured of security of gas supply, otherwise with out long term gas supply contracts, gas generation, mining and process projects will not be bankable and there will be significant ramifications in a number of areas.
An assessment of the impact on the economy is imperative.
What will be the impact on the cost of energy, through failure to make sufficient gas available, and the flow on effect to other industries which require affordable and reliable energy?
Likewise, in considering this issue, the environmental cost of 'gas generation withdrawal' must be quantified. The mainstream alternatives to gas are not as clean, and we need to measure the impact this would have if we do not have secure gas supplies.
We appreciate the export market for gas is very attractive for producers, but at the same time, we need to consider the importance of gas to our local economy - from clean and economical energy, to the impact on prices and jobs.
For that reason, we are calling for a full and informed debate, looking at all issues, before any decision is made.
