In short:
A parliamentary committee has been investigating the efficiency of Western Australia's domestic gas supply policy, after warnings of a looming supply shortage.
In an interim report, the committee found major procurers, including Woodside, have not been meeting the requirement to supply 15 per cent of gas to WA.
The final report released on Thursdayfound Woodside has since increased its local supply, but that broader policy changes were needed to improve transparency and accountability.
A parliamentary inquiry has put the WA Labor government on a collision course with some of the country's wealthiest businesspeople after discounting the idea they should be allowed to export onshore gas.
In a report tabled on Thursday, the inquiry, headed by Labor MP Peter Tinley, found WA was likely to face worsening gas shortages, particularly from 2030 when historic fields start to run dry.
And it cast doubt over the bullish outlook for onshore gas projects in the Perth basin, where billionaires including media magnate Kerry Stokes, mining mogul Chris Ellison and Australia's richest person, Gina Rinehart, have stakes in projects.
According to the inquiry, there were "indications that the discovery and size of future resources from the Perth basin may be underwhelming" and there was a "likelihood of future reserves downgrades".
"The Committee also addresses a topic which has been the subject of much public comment and speculation over the past six months," the inquiry noted in the report.
"That is, whether the State should allow onshore gas projects to export LNG via the existing pipeline infrastructure.
"Ultimately, the Committee has determined that until the domestic gas market is well-supplied, no onshore gas should be exported using this infrastructure."
Supply fears remain
The inquiry, which looked at the adequacy of the state's flagship domestic gas reservation policy, found there was a chance the market could stay "tightly balanced" until the end of the decade.
But it warned the state was likely headed for a crunch unless more gas was brought on stream, arguing such a scenario should not be allowed to happen given WA's heavy reliance on the fuel.
Under WA's domestic reservation policy, 15 per cent of a gas field is supposed to be set aside for the local market.
However, the application of the policy varies between projects.
While some developments including the giant Gorgon LNG facility operated by US oil and gas giant Chevron have been supplying big volumes of gas under their agreements with the state, others have not.
Chief among them has been Woodside Energy's Pluto project, which critics argued had been supplying at a tiny fraction of its required rate for years.
The Economics and Industry Standing Committee indicated in its report Woodside had increased supply from Pluto.
Despite this, the inquiry found structural problems with the design of the policy and with the domestic gas market, recommending they be fixed.
"WA cannot rely on sporadic appeals for more gas when the market appears to be tightly balanced," the report said.
Fixes recommended by the inquiry include "modernising" the state government's agreement with Woodside over Pluto, and making the market and gas producers' positions more transparent.
Gas exports could leave WA short
Perhaps more controversially, the inquiry poured cold water on the call from onshore gas producers to be allowed to export supplies to overseas markets.
In 2021, during the COVID pandemic, former WA Premier Mark McGowan banned the export of onshore gas but carved out one exemption.
That exemption applied to the Waitsia project in the state's mid-west region, where Japanese firm Mitsui and ASX-listed company Beach Energy developed a gas field.
Beach Energy's biggest shareholder is Mr Stokes' Seven Group Holdings.
Following the decision, other onshore gas players including Mr Ellison have pushed hard to be given similar treatment.
Last November, Mr Ellison used the annual general meeting for his company Mineral Resources to call for a five-year exemption to the onshore gas export ban for a project in the Perth basin.
Failure by the government to grant an exemption, he said, would result in the company building a much smaller gas plant fit only for meeting its own needs.
"We've had some good talks with the government," Mr Ellison told investors at the time.
"I'd like to think we're going to get approval to export for the first five years when it comes online."
On Thursday, the inquiry appeared to give short shrift to such demands, saying they could leave WA short of gas at a time when supply was already tight and prices were high.
It recommended the state "allow onshore gas projects to export LNG only if the domestic market is adequately supplied and is expected to be well supplied for a period of time".
Several of the onshore gas projects in the Perth basin have had to write down their known and expected reserves in recent years.
'We still need natural gas'
State Labor MP Bill Johnston, a former energy minister and current committee member, said the inquiry seemed to leave little doubt WA would need gas for decades to come.
Mr Johnston said supply may even increase as the state move away from coal-fired power for much of its electricity and clean tech industries such as lithium processing used the fuel.
But he said there were concerns about new supply.
"The amount of gas demand is driven by industry… decisions on their pathway to net zero," Mr Johnston said.
"Some of those companies will be still using natural gas in 30 years' time, and so whatever the pathway to net zero is, we still need natural gas."
Shadow energy minister Steve Thomas said the report left unanswered questions.
"[The report said] it should only allow onshore gas if there is adequate supply. The report does not define what adequate supply is," Dr Thomas said.
"These projects are multi-decade projects. They need certainty."
Dr Thomas did not say what the Opposition would do about the onshore policy if elected.
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