2008 Western Australian Gas Crisis - Political Response

Political Response

The explosion was investigated separately by Apache Energy, the National Offshore Petroleum Safety Authority (NOPSA) and other agencies. The WA State Opposition called for a Royal Commission, with Energy Spokesperson John Day saying, "It's a matter of making sure that this major disaster, which is now facing WA, does not happen again". Western Australian Premier Alan Carpenter said this was unnecessary because the National Offshore Petroleum Safety Authority was investigating and it could compromise their inquiry. Carpenter said their investigation will take 10–12 weeks to complete and its findings will be released to the public. State Opposition Leader, Troy Buswell, said that NOPSA had a conflict of interest as it helped perform safety inspections on the island, and therefore "are conducting an investigation which will in part be an investigation into themselves".

Premier Carpenter held a meeting on Sunday 8 June with key stakeholders in WA's gas industry and announced that gas would be sourced from alternative suppliers, and a coal-fired power station, which was shut down for maintenance, would be brought back online. He also asked domestic users to save energy where possible, as the saved energy could be used by industries in need.

On 11 June, Carpenter warned he might need to invoke emergency powers and take control of all of WA's gas and electricity supplies, which would result in rolling stoppages, blackouts and brownouts. He also said he had discussed accessing emergency diesel supplies stored by the Department of Defence at Garden Island with Acting Prime Minister Julia Gillard. The state's Energy Minister, Fran Logan, said the decommissioned Muja AB coal-fired power station at Collie would be returned to service to supply 25 terajoules to industry. He estimated it would take up to six weeks before the plant was operational, and said, "These units are old and not as environmentally friendly as new generators. However, the state is facing a significant gas shortage and we need to look at all avenues".

Power consumption will be reduced from 22 megawatts to four megawatts a day at the State Government's water desalination plant in Kwinana, announced Carpenter on 12 June. He said this "will save around about five to six terajoules of energy a day which can be redirected to where it's needed...The decision will not jeopardise water supplies. We are able to switch the desalination plant back on to full production within a few hours ... four to five hours."

On 17 June, two weeks after the explosion, Carpenter made an unprecedented public address on television and radio.

"Gas is not only a direct fuel source for industry, we use it in our homes and it's used to generate a large proportion of our electricity. While the State Government has the power to guarantee gas supplies to essential services and households, some industries and business have been hit hard. A number of them are being forced to scale back operations and others have temporarily closed.... We need your help. By continuing to work together we can lessen the impact of the gas shortage on our state, on our businesses and our families." – Carpenter, 17 June 2008

David Black, a political analyst, said Carpenter's address shows that the situation is serious: "Probably in terms of the total amount of gas and electricity being used, the community is a relatively small player...But politically, it is so important that they share the burden and that they be aware of the fact that they should be sharing the burden." Opposition Leader Buswell called for daily publication of a gas supply allocation for businesses. After Carpenter's address, power consumption fell 2% the next morning, on the coldest day since September 2007. Carpenter said, "The saved consumption was very, very significant, enough to power the city of Geraldton".

On 18 June, Prime Minister Kevin Rudd told Federal Parliament that Premier Carpenter had established a Gas Supply Coordination Group, involving government agencies and industry representatives. Rudd said the Royal Australian Navy was supplying six megalitres of diesel fuel to WA, and the Federal Government would consider invoking the Liquid Fuel Emergency Act if necessary, enabling federal Minister for Resources and Energy, Martin Ferguson, to control production, transfer and stock levels of crude oil and other liquid fuel.

"This is a serious matter for Western Australia therefore it is a serious matter for all Australians... We believe that is an appropriate level of coordination between the two governments... I think people in the east have not quite caught up with the severity of the impact which this is having across the WA economy. It is huge... If there is a significant impact on WA economic activity and growth and on exports from that state, given the significance to the overall Australian economy, there will be wash through from us all on this over time." – Rudd, 18 June 2008

On 21 June, it was revealed that the state-owned electricity generator Verve Energy continued to use hundreds of terajoules of gas each week, despite having access to diesel fuel. A spokesperson said the company had not been instructed to cut back its gas usage, and there was "no intention to use very expensive diesel instead of gas, especially when supplies and deliveries of diesel are stretched and Verve Energy continues to receive its supplies of gas from the North West Shelf". Opposition Leader Troy Buswell said, "This is arrogance and hypocrisy of the highest order... They should be substituting gas for diesel, given the fact their plants can run on diesel. Gas could be re-directed to businesses which don't have choice about using gas or diesel." The State Government had also delayed approval of a new gas processing plant for Apache Energy by over six months, only allowing Apache to proceed after the gas crisis commenced and worsened.

The lack of a State Government contingency plan was criticised by Robert Amin, Curtin University's chair of Petroleum Engineering and chair of the Woodside Research Foundation, who said the Government should have stored enough gas in underground reservoirs to power the state for at least one month, to mitigate a potential crisis. Amin said gas could be stored in parts of the Perth Basin depleted of gas, like Dongara, and companies could be offered tax incentives. Federal Opposition spokesperson for trade, Ian Macfarlane, called for a national audit of all gas pipelines, and highlighted the vulnerability of the single pipeline that carries WA's gas from the North West Shelf. Macfarlane said, "At the very least this event comes as a wake-up call for the construction of a second pipeline from the North West shelf to supply gas to industry especially in the south-western part of Western Australia." Professor Dong-ke Zhang, Director of the Centre for Petroleum, Fuels and Energy at the University of Western Australia, said, "I would have thought it was quite silly for a very advanced state like WA that we are not able to cope with an incident like this by not having the ability to divert gas from an LNG plant to the domestic pipeline. At a policy level, the infrastructure needs to be longer term and the Government should encourage major players like Woodside and Chevron to invest in the infrastructure and give the incentives for the industry to come to the party because they get much bigger margins by selling LNG overseas."