Friday, May 18

Gas price argument runs out of steam

Ian Macfarlane, the Federal Opposition's resources spokesman, yesterday reopened an old WA wound by claiming it was the State's domestic gas reservation policy that sufficiently spooked Inpex and Total to move their $34 billion Ichthys LNG project to the Northern Territory.

Whether the recollections of Macfarlane, who was the Howard government's resources minister, are correct, WA's loss of the Ichthys project to the NT remains a big disappointment.

The main reason that Inpex and Total walked, of course, was their inability to see eye to eye with the then-State Labor government, in contrast to the NT leadership which bent over backwards to secure Ichthys, and won.

Macfarlane's reference to Ichthys yesterday, on the final day of the Australian Petroleum Production & Exploration Association conference in Adelaide, was part of a broader theme against domestic gas reservation policies as championed by the WA Domgas alliance of gas customers, led by aluminium giant Alcoa.

Macfarlane's argument against the policy and its attempted spread to the east coast, mirrored the views of Santos chief executive David Knox and Beach Petroleum head Reg Nelson among others. They argue it is the sort of unnecessary government intervention that discourages investment in the oil and gas hunt, and thereby actually threatens domestic gas supply, rather than encouraging it.

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The West Australian

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