Producers of onshore gas should not be allowed to export it unless the WA market is well supplied, according to a parliamentary committee calling for action to stem a looming shortage.
The politically contentious recommendation will rile investors in the Perth Basin, including media baron Kerry Stokes, miners Gina Rinehart and Chris Ellison and gas giant Woodside that wants to export their gas through its ageing North West Shelf gas plant near Karratha.
WA’s economy is more dependent on gas than any other state.Credit: Adobe Stock
However, WA’s crucial mining sector has much to lose if gas becomes scarce or expensive. In July Laurent Trost, who manages the Pilbara ammonia and explosive plants owned by Norway’s Yara, called for the inquiry to protect existing industry.
“If we don’t have availability of long-term gas, we will fail, and we will have to close our operations,” he said
Yara consumes about 8 per cent of WA’s gas supply, allowing it to supply about 5 per cent of the world’s traded ammonia and produce 40 per cent of the ammonium nitrate WA’s mining giants use for blasting.
The lower house Economics and Industry Standing Committee began investigating WA’s domestic gas policy in mid-2023 in response to Australian Energy Market Operator forecasts of a tight gas market for much of this decade – before a much larger shortage begins in the 2030s.
It recommended the state government only allow Perth Basin gas to be exported “if the domestic gas market is adequately supplied and is expected to be well supplied for a period of time,” leaving the vital parameters of “adequately supplied” and “period of time” undefined.
Opposition energy spokesman Steve Thomas said the decision now lay with the Cook government, but he did not expect a decision before the March 2025 state election.
“As we wait for government policy there will simply be more uncertainty for an industry that needs long-term certainty,” he said.
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