Barnett told the opening session of LNG18 that gas reservation had been in place in Western Australia since the 1980s, and had more recently been defined as an equivalent of 15% of LNG exports to be made available to the domestic market.

"The philosophy is simple in that the gas belongs to the people and, therefore, the local economy should have fair access to some of the gas produced by LNG export projects. A more subtle variation is that public support for LNG projects is in part dependent on tangible benefits to the local economy.

"Tax revenue alone is not enough," Barnett said.

The Premier noted that with the gas reservation policy in place, LNG in WA enjoyed strong public support.

"This is not the case for the CSG projects on the east coast. Perhaps the environmental protest there would be more tempered if these projects also supplied gas to the local economy rather than being fully exported.

"In fact, public opposition has been exacerbated by the projects having to purchase additional gas to meet export contracts, thereby causing local supply shortages and higher domestic prices.

"The industry needs supporters, not opponents," Barnett said.

Without support, governments in New South Wales and Victoria have imposed restrictions on exploration, and the same appears to be happening in the Northern Territory, where the Labor opposition has pledged to ban fraccing.

Western Australia's Department of State Development Director General Stephen Wood backed the policy.

"I am a servant of the public, and it is a policy that my department is there to implement, so you would expect me to say it is overwhelmingly positive," Wood said.

"My question to industry is: do you think you would have provided gas into the (WA) market if you weren't required to do so? Do you think also, that you would have public support if you weren't supplying gas domestically?

"I think the answer to those questions is ‘No'.

"Is it a policy that is in its early phases seems to be working, and I would say ‘yes'."

WA hosts about 90% of Australia's conventional gas discoveries, mostly in the Browse and Carnarvon Basin, and in terms of production around 75% of gas produced is exported.

The state has become dependent on gas, which from a low base in the 1960s and 1970s, now provides more than half of WA's needs.

All of the major gas companies in production or moving towards onshore production have signed up to deliver the 15% share of gas from their fields into the market, or have agreed to provide offset gas.

Wood said there was no evidence the policy has been deleterious to their investment, and it has secured gas for the state's needs.

The NWS started as a domgas project on a take-or-pay arrangement in the 1980s, and Wood said that could be considered the start of the reservation policy in some respects.

But outside WA, gas reservation found little support at the conference.

By breakfast time yesterday, Total CEO Patrick Pouyanne was on the record with his opposition.

With substantial equity in Santos' Gladstone LNG and Inpex's Ichthys project, he opposed any diversion of gas to the domestic market.

He cautioned that there were other countries where Total could invest, saying the French super-major provided billions of dollars in taxes, adding that retrospective policy changes "could be very detrimental to investors."

"Foreign investors, if we come to Australia, it is to invest in LNG, it is an export business," he told the Australian Financial Review at LNG18.

He said future investments by Total in Australia would be weighed up against its projects in the North Sea, Papua New Guinea and Russia.

APPEA and gas producers are firmly against the policy, and the response from AGL Energy's head of wholesale gas Phaedra Deckart was typical.

"We favour gas-on-gas competition as the best way to drive down prices across Eastern Australia," she said.

"Moratoriums and the prevention of new exploration and development in particular areas doesn't encourage that.

"AGL doesn't support a domestic gas reservation policy. We support regulation and policy for new exploration and development that allows new gas to come into the east coast gas market."

Dr Ross Lambie, general manager, resources and energy economics for the Office of Chief Economist, pointed out the tightness of reserves in the east, and said the Commonwealth had little say on onshore gas, so it was an issue for the states to manage.

He said that identified aggregate 2P reserves held by the Gladstone operators can cover 20 years of production, but only with Arrow Energy's undeveloped reserves. Without these, Curtis Island will have to rely on 3P and contingent reserves.

Lambie's perspective may explain the industry's concern with the prospect of allocating 15% of their reserves to the domestic market, as is the case in the west.

Former Santos vice president strategy and corporate development Peter Cleary, who is now an industry consultant, disputed the WA experience, saying he does not see any evidence that domgas reservation works.

Last year the Australian Workers Union tried to push the Australian Labor Party to adopt a domgas reservation policy.

The AWU warned that one in five heavy manufacturers will close by 2019 if Australia doesn't start reserving a portion of Australia's gas.

The Australian Petroleum Production and Exploration Association's position is that gas reservation would increase sovereign risk and project costs

It says the best policy response to concerns about domestic gas supply and rising prices lies in bringing more gas to market rather than discouraging investment and raising project costs.

Toowoomba weighs in

Shane Charles, who chairs the Toowoomba and Surat Basin Enterprise and is a commissioner of Queensland's GasFields Commission, brought a very different perspective to the challenges facing the gas industry.

Charles reflected on the early opposition to CSG in his region and the challenge of turning that around.

"It has left a tremendous legacy through the region," he said.

Similar to Barnett's call for more than trinkets, Charles told the industry that social license was subjective and not objective.

"It is not for me, it is not for you, it is not for the industry to say what regional communities should feel. It is up to them how they feel," he said.

"It is something the industry should bear in mind and put in the forefront of decisions going forward."

Elements of Barnett's view found support at LNG18. Gas is the vital fuel to help transition to a lower carbon economy. Consultation is key. Community support for access to land requires consultation and tangible value to the community, on their terms.

Implementation of domgas reservation in the eastern states faces many more hurdles than the west.

In WA there is bipartisan support, a single jurisdiction, most activity is in sparsely populated areas, and the reservation obligation came before sanction of the LNG projects.

However, Barnett is clearly right in one respect - the gas situation in the east is at a stalemate.

- Additional reporting by Peter Milne