Earlier this month, WA Premier Alan Carpenter confirmed the Government would ask gas producers in the state to reserve 15% of their gas for domestic use, rather than be exported as liquefied natural gas to markets in Asia and North America.

In a policy statement released last week, the State Government said the 15% amount was determined by comparing projected WA gas consumption to 2055 (32 trillion cubic feet) to estimates of the state’s ultimately recoverable gas reserves (200Tcf).

But the Australian Petroleum Production and Exploration Association has criticised the estimate, saying it equates production capacity to reserves and fails to give a “compelling” reason as to why the year 2055 was chosen.

“For the government to determine such an important policy parameter (15%) on the basis of 50-year projections when, say, a 35-year timeframe would imply a significantly lower figure (around 10%) and a 15-year timeframe would suggest that no further reservation at all is required, is not a particularly robust approach to policy-making,” APPEA said.

“Rather than demonstrating a long-term gas shortage, the reserves and production figures quoted in the policy suggest that in 2055, WA will still have 55Tcf of gas in onshore and adjacent offshore areas.

“The provision for the gas reservation target (of 15%) to be subject to periodic review greatly increases uncertainty and risk for LNG project proponent.”

The government’s gas reserve announcement followed six months of heated public clashes between Carpenter, Federal Minister for Resources Ian Macfarlane and Woodside chief executive Don Voelte.

Macfarlane has argued that the plan would deter investment and exploration, while Carpenter has said reserving a portion of gas from LNG projects for the domestic market was not a new concept.