By the end of 2018, 11% of our planet will get their gas from Western Australia.
As WA has such a hold on the global supply of gas, we can confidently say that WA's decisions have a global impact.
WA holds over 90% of the gas found in Australia.
The state also has the biggest appetite for gas in the country, with demand mainly from large industrial customers.
Back in 2008, a plant explosion off WA's coast wiped out total gas production by 35%.
The disaster had a severe impact on the bottom-line of companies in WA, as many had to shut down temporarily.
With nearly half of the electricity in WA coming from gas, rolling blackouts wreaked havoc for months.
It was WA’s first real taste of how bitterly the state would suffer if gas became too scarce or too expensive.
Let's take a quick look at how precisely the market in Western Australia is shaping up today!
Gas Crisis in Western Australia
With a quarter of Australia's energy needs coming from gas, the gas crisis our country faces today is worrying.
The cause of the crisis in Australia? Greed.
As exporting gas became increasingly profitable, the Australian market was ignored.
This negligence made wholesale prices triple in barely a few years.
The supply is so thin that our country is now constructing four import hubs to bring some gas back home!
It is a laughable state of affairs that Australia is looking to import from the same nations we were selling to firstly.
The entire situation is as ironic as Russia importing Vodka or New Zealand shopping around for sheep wool!
The crisis is worsening a lousy situation for Australians, already facing energy poverty from high electricity prices.
Greed has left Western Australia residents with a raw deal.
The Future of WA Gas
Gas can help in the transition away from dirty coal, as countries look to cut pollution.
Additionally, it is a source of energy that can be turned on and off quickly.
With Paris Climate Agreements being imposed on countries, the global transition to gas is necessary.
Because of this, research agency WoodMac is estimating a 75% increase in global demand by 2035.
Although our country is set to gain financially, more production can also mean bad news.
Rising gas production has led to an increase in emissions in Australia over the last three years.
More pollution is terrible news for Australia, which pledges to have lower emission levels by 2030.
What do WA residents expect?
Gas in Perth is the cheapest for any state capital while the average wholesale price in WA is 40% lower than East Coast prices.
Why is gas cheaper in Western Australia?
Plenty of supply, as well as laws insisting an amount be set aside for the public before exporting.
However, this favourable situation will end soon according to the Australian Energy Market Operator (AEMO). AEMO expect supply in WA to go lower after 2020, as large contracts renew. There is a chance during renewal that companies may ignore the domestic market and focus on foreign profits.
Regardless of this, reserves of gas in WA will fall after 2022.
Current projects in WA are facing some severe hiccups as well.
U.S.-based Chevron’s mega project in WA has seen costs spiral out of control, creating the most expensive exploration project ever. Another project that's building a rig platform, that’s the most massive floating structure on the planet, is also facing raging costs. In such a costly climate for investing, companies have cut drilling wells considerably.
Drilling in 2017 was comparable to exploration levels in 1990, a 27-year low.
Additionally, the operator of WA gas mains is expecting over 80,0001 new customers in the coming years.
This increase in demand, falling reserves and a lack of drilling can mean only one thing.
WA residents may have to struggle soon with exploding prices.
Read More: Why Is My Electricity Bill So High?
How can Electricity Monster help?
With supply problems fast approaching, prices may go up.
Despite being open to competition since 2004, new retailers are only recently entering the WA market.
To land customers, retailers are dangling promotions and hefty discounts for homeowners in WA.
Electricity Monster understands better than anybody else that every home in WA has different demands.
Our expert team is aware of what is more suitable for low and high usage properties.
Comparing providers is the 100% Free Service we provide, allowing WA homes to start questioning their bills finally.
Call us on 1300 232 848 or submit your details below and get your home on a sharper rate!
If you still find it all a little hard to believe, go ahead and ask the 35,000 Australians happy with Electricity Monster!
1 ATCO Gas Australia Press Release Dated August 17, 2018 (2020-24 Plan Factsheet)
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Benjamin Tom covers the retail energy market, with a focus on electricity, solar, and Internet. His interests include helping people navigate the complexities of the energy market while saving money on their power bills.