Speaking at the AustralAsian Oil & Gas conference in Perth, Hohnen said the state’s gas supply shortfall could be as high as 400-500 terajoules per day in the next five years.

“Reservations may be part of the equation but can’t be seen to be the only solution,” Hohnen said.

In a controversial move last October, the WA Government confirmed it would ask gas producers in the state to reserve 15% of their gas for domestic use.

Hohnen said not having a competitive gas supply for domestic purposes “could have a huge economic and environmental impact” – including the potential for future baseload power stations to be coal-fired rather than gas-fired.

He suggested the following upstream interventions:

· A review of retention license arrangements so that companies use licenses or lose them,

· A review of the joint selling dispensation enjoyed by the NW Shelf producers to encourage competition,

· Differential royalties or taxes to stimulate production for the domestic market,

· Active promotion of smaller field exploration and development, and

· Alternative approaches to offshore gas gathering systems to lower small company production costs.