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Eastern states should reserve natural gas for domestic use, Barnett says

Tuesday, 28 Feb 2017 15:00:52 | Eliza Borrello

Colin Barnett says the east coast is in a failed position. (ABC News: Jacob Kagi)

West Australian Premier Colin Barnett says the eastern states should follow WA's lead and reserve some of their natural gas for domestic use to curb energy shortages.

In Western Australia, 15 per cent of the gas produced by each liquefied natural gas project must be kept for domestic use.

"The situation on the east coast is there is no reservation and indeed successive federal governments have argued against a reservation policy," Mr Barnett said.

"I've got to say it's a failed position.

"The reservation of gas plays a big part in our economy and it's often said, still being said by the various commentators on the east coast, that Western Australia's just a mining state.

"The irony is that you're actually seeing more growth in manufacturing industry in this state than you're probably seeing on the east coast."

Aluminium producer Alcoa is one of the country's biggest energy users and operates on both the east and west coasts.

It has refineries in Wagerup, Kwinana and Pinjarra in Western Australia and a smelter in Portland in Victoria.

Alcoa Australia's managing director and chairman Michael Parker said Western Australia's policy makes local production easier.

"We've been fortunate that there's been a bipartisan policy here in Western Australia around domestic gas reservation and that's enabled us to continue to invest in our Western Australian assets," he said.

"If you look at Victoria, clearly Victoria does not have a reservation policy and we've found it increasingly difficult to contract for energy in Victoria in recent years.

"The key for me and Alcoa ... is to make sure you can get as much energy into the marketplace as possible.

"There's a variety of ways of doing it ... and a reservation policy would be one of those mechanisms."

Australian Petroleum Production & Exploration Association chief executive Malcolm Roberts is opposed to other states adopting Western Australia's policy.

"People concerned by the impact of higher gas prices on local customers should be arguing for the removal of unnecessary restrictions on developing new resources, not more heavy-handed regulation," he said.

"We have the bizarre situation of state governments banning new gas projects and then complaining about higher gas prices."

AustraliaPlus


 

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