Rapid growth in liquefied natural gas (LNG) production and export capacity in WA has already outstripped the capacity of current and proposed offshore gas fields in Commonwealth waters to supply. This will inevitably place an increasing reliance on the state’s domestic reserves and see a growing proportion of these reserves allocated to their lowest-value use as exported LNG.

Emerging excess LNG export capacity, combined with a lack of renewable energy generation to displace gas in the domestic market will place unsustainable levels of demand on the state’s domestic gas supplies in the future.

The perceived shortage of gas in the WA domestic market is better understood as unsustainable growth in demand. Decisions to allow further extensions or expansions of LNG export capacity and associated onshore projects will further exacerbate this situation by locking in even higher levels of demand on the state’s domestic gas reserves.

Analysis of Woodside’s Burrup Hub and North West Shelf LNG facility presented in this report shows that these developments will transition from a modest provider, to a net taker of gas from the WA domestic market in the near future. This is despite recent commitments by Woodside to increase domestic gas supplies.

Key policy recommendations:

• Develop a proactive gas substitution and demand management strategy for the WA domestic market. This should set out a plan for the orderly phase-out of gas from the domestic energy market in line with the decarbonisation goals of the Paris Agreement.
• Develop a domestic gas protection strategy to reserve WA’s domestic gas for high priority and high value uses consistent with supporting rapid electrification and decarbonisation.
• Implement a moratorium on further growth, and an orderly phase out of excess LNG export capacity.