Greater competition in Western Australia's natural gas industry will lead to lower energy prices and increased industrial development, according to the State's Fuel and Energy Minister Geoff Gallop.
Dr Gallop, who is also WA's Minister for Microeconomic Reform, was speaking today at the National Gas Conference in Sydney.
He said the Government's move to separate the Dampier-Bunbury pipeline from the State Energy Commission (SECWA) was central to its plan to reduce energy prices by 25 per cent in real terms by the year 2000.
Premier Carmen Lawrence announced in her economic development statement last week that an independent authority would be established to own and operate the 1,400-kilometre pipeline.
Until now, SECWA has dominated energy supply in the West with responsibility for generation, transmission, distribution and sale of electricity, as well as the purchase, transmission, distribution and sale of gas.
"The new Dampier-Perth Pipeline Authority will be charged with the job of transporting gas on a fair and equitable basis for all suppliers and users," Dr Gallop said.
"It will be required to recover its costs - though we will probably require transitional arrangements for that - and it will have no involvement in gas contracts as such, either buying or selling.
"In this way, we intend to avoid the commercial temptation of using ownership and control of the pipeline as a means of monopolising the market."
The Minister said the WA Government was generally supportive of the Industry Commission's recommendations for greater competition in the energy industry.
Significant competition for SECWA in energy supply would be one of the keys to achieving reform in Western Australia's energy industry.
"It is the WA Government's policy to ensure that barriers are not placed in the way of new and competing private ventures," Dr Gallop said.
"Availability of gas from a range of sources and open access to the pipeline will enable companies to generate their own electricity and install efficient co-generation equipment.
"Our aim is to achieve a deregulated market where private production companies are free to develop and market gas to any customer.
"The decision to separate the pipeline from SECWA also provides the potential for alternative and cheaper gas supplies to enter the Pilbara market.
"While State Government approval is a prerequisite for entry into the energy generation and distribution market, it is the Government's intention that approval should not be withheld."
Dr Gallop said deregulation of WA's gas market to encourage exploration and competition in supply had begun in 1988. The Harriet gas gathering scheme and the Tubridgi and Beharra Springs developments resulted from this.
The new Pipeline Authority would give a major boost to the availability of low-cost energy and the Western Australian economy would reap the benefit.