The Domgas Alliance, which represents the state's biggest gas consumers, says that while the whole process is flawed, the report at least continues to confirm the value of the reservation policy.
Gas producer lobby group the Australian Petroleum Production and Exploration Association argues that Western Australia's gas reservation policy stifles the increased energy security, investment, jobs and royalties that will come with a growing onshore gas industry.
Smaller gas resource owners, however, believe the reservation policy will see the big oilers elect to invest in onshore fields to offset their offshore gas and meet their reservation targets.
"Domestic reservations have been essential to ensuring Western Australian industry has a chance to bid for Western Australian gas," Domgas Alliance executive director Matt Brown said.
"Even using the GSOO's optimistic predictions on supply levels, around half of the gas which could come into market will only do so because of the gas reservation requirements for the Gorgon, Wheatstone and North West Shelf projects."
However, APPEA's chief operating officer - Western region Stedman Ellis complained that the state government was penalising investment in offshore gas, and said it should do more to facilitate investment in the onshore sector, encouraging new domestic supply options.
"With the recent collapse in private sector investment in Australia, removing the reservation policy would send a strong signal to investors that WA is open for business," Ellis said.
Both camps agreed upon the independent umpire's recognition of increased demand for natural gas as a lower-cost, cleaner fuel for the state's energy-hungry industries.
The GSOO forecasts that WA will be well supplied out to 2024 on the back of significant investment in gas processing capacity, with domgas producers having the processing capacity in place to supply around 95% of WA's domestic gas needs, and significant discoveries of natural gas onshore in the Mid-West in 2014 and 2015 that are trying to find a way to market.
But the Domgas Alliance has concerns over the GSOO's forward forecasts, as the alliance believes forecasts of a surplus are misleading and unrealistic in its assessment of gas supply or demand growth, and do not reflect what is happening in the market.
"There is a big difference between producers having sufficient production capacity to supply gas and those same producers being willing to actually supply gas to the market at competitive prices," Brown said.
"The Alliance believes that after four GSOOs, now is the time for an independent review of how the statement is compiled."
He wants the Independent Market Operator's powers to be tested, to make sure it is able to secure the best possible information from producers
"We have already seen the interim results of the ACCC effectively using its powers on the east coast to get to the truth about gas supply. We need to be confident that the IMO through its GSOO process is hitting the same level of effectiveness."
The annual GSOO looks forward to 2025 and says that the potential gas supply for the forecast period remains significantly higher than forecast demand.
Potential gas supply is at least 107 terajoules per day greater than demand over the next four years in the base forecast scenario, rising to an oversupply of more than 400TJpd by 2025, however it has fallen since the 2015 GSOO because of lower investment caused by depressed out prices.
It says gas producers will likely be less willing to supply the domestic market in the short-term, at least until prices increase or stabilise, or additional production capacity comes online.
On the demand side, the IMO expects domestic gas consumption to increase by less than 1% per annum over the forecast period, remaining almost flat in the base scenario forecast, with an expected decrease in gas-fired electricity generation in the South West Interconnected System, only partially offset by several new mining related developments.
Also of note is the end of joint marketing authorisation for the NWS and Gorgon JVs on December 31, a significant change to the dynamics of the WA domestic gas market, increasing the number of individual gas suppliers, which is likely to increase competition.
Greater competition should provide opportunities for customers to renegotiate their gas requirements, or secure a more competitive price.
It means the Karratha Gas Plant will likely continue to operate beyond 2020.
