Call her Priya. She has worked eleven years on the process floor at Kwinana's ammonium plant, twenty minutes south of Fremantle, where natural gas is not just fuel but feedstock — the raw ingredient turned into the fertiliser and industrial chemicals that leave the wharf next door. Twice a week her shuttle bus passes the padlocked gates of the alumina refinery two kilometres up the strip, silent since Alcoa permanently closed it in September 2025 after nearly six decades of operation, citing the plant's age, scale, bauxite quality and operating costs (Alcoa Corporation, media statement, 29-Sep-2025). Priya's plant survives partly because of a rule most West Australians have never heard of: since 2006, any company building a new gas export project in this state has had to set aside gas equivalent to 15% of what it ships overseas for buyers like her employer, at prices insulated from the wild swings of the international market. It is a big part of why, through the worst of the 2022 global gas crisis that sent bills soaring on the east coast, the lights at Kwinana mostly stayed on at a price the plant could still afford. It is also why, when Alcoa shut its neighbour anyway, the question of whether that 2006 rule is still doing its job — and whether it will keep doing so as the fields behind it run down — sits over every remaining job on the strip.
What the government did
Western Australia's gas market runs on a different logic to the rest of the country. On the east coast, LNG exporters ship the great majority of what they produce, and the federal government only intervenes after the fact, through the Australian Domestic Gas Security Mechanism — a 2017 "trigger" that can restrict exports if a shortfall is forecast. WA instead built a reservation into the deal from the start. In 2006, the state government formalised a Domestic Gas Policy requiring new LNG projects to make gas available to the WA market; a 2011 update fixed the benchmark still used today — 15% of each project's LNG exports, reserved over the life of the project rather than year by year (Government of Western Australia, WA Domestic Gas Policy: Development and Application, current). Every major offshore LNG venture built in WA since — the North West Shelf's later trains, Gorgon, Wheatstone, Prelude and Woodside's Pluto, including its Scarborough-fed second train — has operated under that condition, attached through state agreements and project approvals rather than a single piece of legislation.
Onshore gas, mostly from the Perth Basin fields north of the city, was treated differently again. In August 2020, the McGowan Government banned exporting gas produced onshore and connected to WA's local pipeline network, other than in "exceptional circumstances" — a near-total domestic-only rule, tighter than the 15% offshore benchmark. Ten months later the government granted the first such exception to Waitsia, a Perth Basin field part-owned by Mitsui and interests linked to media proprietor Kerry Stokes, allowing some of its gas to be processed into LNG through the North West Shelf's Karratha plant; by 2023 the government said no further onshore export exemptions would be granted. Roger Cook, who became Premier in June 2023, inherited a policy under active parliamentary scrutiny: the Legislative Assembly's Economics and Industry Standing Committee had opened an inquiry that ran 59 weeks, tabling an interim report in February 2024 and a final report, Domestic Gas Security in a Changing World, on 15 August 2024, with 77 findings and 30 recommendations, and concluding the Policy was "no longer fit for purpose" against forecasts of shortfalls in almost every year to 2033 (WA Legislative Assembly, Economics and Industry Standing Committee, Final Report, 15-Aug-2024). Five weeks later, on 19 September 2024, the Cook Government released its response: onshore gas projects would now be allowed to reserve only 80% of production for the WA market — down from the near-total requirement — until the end of 2030, moving to a full 100% domestic reservation from 2031, alongside new "use it or lose it" powers under the Petroleum and Geothermal Energy Resources Act 1967 to stop companies sitting on undeveloped gas tenements. The Committee's central recommendation — revisiting the 15% offshore benchmark itself — was not adopted; the government held that figure unchanged, citing the need for market and investment certainty (WA Government, "Updated domestic gas policy to secure WA's energy future," media statement, 19-Sep-2024).
The strongest case
Two decades of insulation the east coast never built
The strongest argument for the policy is also the simplest: it worked, for a long time, largely as designed. Australia exports roughly four-fifths of the gas it produces, and on the east coast that exposure now sets the domestic price — when international LNG buyers will pay $15 or $20 a gigajoule (a standard unit of gas energy), local retailers can charge close to it too, because the gas could always be shipped away instead. WA's reservation broke that link at the point new projects were approved, not after a crisis forced the government's hand. Through 2022, when east coast commercial and industrial gas offers climbed past $20 a gigajoule and the Commonwealth resorted to an emergency price cap, WA's reserved-market prices stayed markedly lower — industry analysis puts WA wholesale gas around $5.50-$6 a gigajoule in 2024, against east coast contract prices around $7 a gigajoule on average and considerably higher again for commercial and industrial buyers (approx.) (IEEFA gas market commentary, citing ACCC Gas Inquiry 2017-2030 data, 2024-25). That gap has kept a genuinely large employer base afloat: alumina refining, ammonia and fertiliser production, mineral processing and gas-fired power generation, much of it concentrated on the Kwinana strip and in the Pilbara, all buying gas at prices the policy's architects deliberately kept below what an export-parity market would charge. Unlike the east coast's reactive trigger mechanism, WA's policy has never needed to be invoked in an emergency, because the reservation was written into every new project from the outset. That is a genuine, structural advantage other states do not have, and the Cook Government's decision to hold the offshore 15% benchmark rather than reopen it reflects a defensible judgment: that predictability for the next generation of LNG investors is itself part of what has kept supply, and price stability, intact this long.
The evidence
The state's own market operator no longer describes the medium term the same way. AEMO's most recent Statement of Opportunities for the WA gas market, published in December 2025, forecasts the market staying "broadly balanced" only in the near term, with consumption climbing from 2026 to peak around 2030 while new supply lags behind it — producing a forecast supply gap emerging in 2028, smaller than AEMO had projected a year earlier, but widening sharply after that: potential shortfalls of around 11 terajoules a day (approx.) by 2030, growing to as much as 478 terajoules a day (approx.) by 2045, with the market tipping into a deficit of more than 10% of demand every year from 2031 (AEMO, 2025 Western Australia Gas Statement of Opportunities, Dec-2025). A terajoule a day is roughly enough gas to run a mid-sized industrial plant; a shortfall in the hundreds of terajoules is a market that can no longer supply itself from its own reserved fields. AEMO's own explanation for why its 2025 forecast improved on 2024's is telling in a different way: it is not new supply that eased the numbers, but falling demand, including the suspension of nickel processing and the permanent closure of the Kwinana alumina refinery.
The 2024 review and the export debate
The clearest illustration of how contested this ground is sits in the Waitsia case. When the McGowan Government banned onshore gas exports in August 2020, it framed the policy as near-absolute — then carved out its first exception, for Waitsia, within ten months, letting a field part-owned by interests linked to Kerry Stokes send gas through the North West Shelf's export plant while every other onshore developer stayed locked to the domestic market. The optics did lasting damage to the policy's credibility, feeding a "gas for me but not for thee" critique of a rule meant to look uniform. The Cook Government's September 2024 response reset the terms rather than resolving the underlying tension: instead of a near-total onshore ban with case-by-case exceptions, every onshore Perth Basin developer can now export up to a fifth of production until the end of 2030, with the domestic share only reaching 100% from 2031. That is, on its face, a loosening of the export restriction, sold as a way to attract the new supply the market needs — but it also means the years AEMO expects the shortfall to widen most sharply, from 2030 onward, are exactly the years the state is still allowing new onshore production to leave the domestic pool.
A second contested claim sits alongside the government's own numbers. The Australia Institute, a public-interest think tank, argues in a December 2024 report that WA wholesale gas and electricity prices roughly tripled after the 2020 decision to permit onshore gas exports, on the reasoning that even a partial link to the international LNG market is enough to drag the domestic price toward it. That period also coincided with the largest global gas price shock in decades, triggered by Russia's 2022 invasion of Ukraine, which the government and gas producers would point to as the more obvious driver — the Institute's own analysis does not fully separate the two effects. What is not contested is the direction: WA prices have risen since 2020, even inside a market designed to be insulated from exactly that kind of shock, and by how much is a live argument rather than a settled fact.
The critique
Put the government's own two decisions from September 2024 side by side and a pattern appears. Where the parliamentary inquiry's findings were most inconvenient for existing LNG exporters — reopening the 15% offshore benchmark that has stood since 2011 — the government held the line, citing investment certainty. Where the findings applied to onshore developers still seeking approval, largely smaller and newer companies, it changed the rule, and in the direction of allowing more exports, not fewer. That is not evidence of bad faith; the offshore projects genuinely are the backbone of both the reservation policy and the state's LNG industry, and reopening the 15% figure retrospectively for ventures like the North West Shelf, Gorgon or Scarborough would unsettle contracts signed years or decades ago. But it does mean the Committee's central conclusion — that the Policy as a whole was "no longer fit for purpose" — was not really tested against its biggest lever. The large majority of WA's LNG production runs through offshore projects governed by a number the government chose not to touch.
The mechanism itself carries a structural weakness the 2024 review did not fix. Because the 15% offshore reservation is calculated over the life of a project rather than year by year, a company can meet its overall obligation while supplying comparatively little gas in any single year — including, potentially, the years closest to a field's decommissioning, which is precisely when AEMO's own modelling shows the market needs it most. The North West Shelf's original venture, the anchor of WA's LNG industry since the 1980s, is approaching the back end of its productive life through the late 2020s and 2030s on natural depletion alone; a 15%-of-lifetime commitment struck years ago offers no guarantee that gas arrives on schedule as that decline accelerates.
A reservation policy built for the day a project opens offers no guarantee about the years it starts to close.
Nor has the policy proven able to hold the industrial base together on its own. Priya's employer survived; Alcoa's did not, even inside a state with some of the cheapest reserved gas in the country. The company's own statements pointed to the refinery's age, scale, bauxite quality and general operating costs rather than gas prices specifically — but AEMO's analysts treated the closure as significant enough to revise the entire state's demand forecast downward. That is a genuine complication for the policy's central promise: reserved gas can keep prices below export parity, but it cannot, on its own, offset every other cost pressure bearing down on energy-intensive industry, and a shrinking industrial gas market changes the arithmetic behind every future supply projection, including the government's own.
The risk to the future
The fix arrives in 2031 — the same year AEMO says the shortfall turns structural
Three things are true at once, and none of them are hypothetical. First, AEMO's own December 2025 forecast has the domestic market moving from broadly balanced to a supply gap emerging in 2028, then to a deficit exceeding 10% of demand every year from 2031 onward, driven mainly by production declining faster than consumption falls (AEMO, 2025 WA GSOO, Dec-2025). Second, the Cook Government's own fix for onshore gas — 100% domestic reservation — does not take effect until 1 January 2031, the same year AEMO's modelling shows the deficit turning structural rather than occasional; until then, up to a fifth of new onshore production can still leave the state. Third, the much larger offshore side of the market, left untouched by the 2024 review, is reserved only at a life-of-project 15% with no requirement that supply be smoothed to match the years demand is highest — precisely the gap the Legislative Assembly's own committee flagged when it called the Policy "no longer fit for purpose" in August 2024, and precisely the recommendation the government did not adopt. None of this means WA is about to see east coast-style price shocks tomorrow; the reserved-gas advantage that has kept two decades of industry running is real, and on the government's own account, still intact today. But a policy is only as strong as its weakest years, and on the state's own market operator's numbers, WA's weakest years for gas are still ahead of it — arriving just as the industries the policy was built to protect, from Kwinana's refineries to the Pilbara's processors, are already showing they can close for other reasons entirely.