A new report indicates Western Australia’s urgent need for new gas supply, warning the state and federal governments to unlock abundant reserves or face blackouts and higher prices.
The Australian Energy Market Operator (AEMO) revealed a decade-long surge in gas demand, highlighting its crucial role in supplying WA’s energy needs and facilitating the transition to net zero.
However, supply constraints might occur as early as next year, putting WA residents and companies in danger of energy shortages and price increases.
The 2023 Western Australian Gas Statement of Opportunities (GSOO) predicts domestic supply to exceed demand from next year to 2029, with shortfalls expected to return in 2030 and worsen.
Australian Energy Producers WA Director Caroline Cherry said governments are urged to introduce new gas to prevent blackouts and increase prices.
“WA has an abundance of gas reserves but the state needs the political will to help unlock more of it — and quickly,” Cherry stated.
According to her, the increasing severity of the warnings underscores the necessity for urgent policies to facilitate new supply development.
She urged the WA Government to rethink its ban on onshore projects from accessing export markets.
“As Rystad Energy recently found, allowing onshore gas projects to export expands the number of viable projects — unlocking new domestic supply and reducing the domestic price,” she added.
Cherry said the Australian Government must swiftly rectify the malfunctioning offshore approvals system, which is causing significant disruptions to major energy supply projects and jeopardising the country’s economic stability.
“It is simply bewildering that WA could potentially be relying on diverting LNG exports when there is so much untapped gas and so many economic benefits from developing new supply.”
WA’s gas demand is projected to increase by 2.2% each year over the next decade, up from 1.7% predicted last year, outpacing a 0.9% annual reduction in supply.
“Today’s report underscores the importance of new gas supply to power WA’s growing resources industry and support the South West electricity system as coal-fired power is phased out,” Cherry said.
She stated that the industry welcomes the State’s recent pledge to streamline environmental approvals.
“This spirit must also inform its response to the WA Domestic Gas Inquiry — new supply must be the outcome.”
