2008 Western Australian gas crisis
The plant, operated by Apache Energy, which normally supplied a third of the state's gas, was shut down for almost two months while a detailed engineering investigation and major repairs were carried out.
The incident raised significant public and political issues related to energy security, adequacy of existing infrastructure, contingency planning, and the role of regulatory agencies.
NOPSA's report was published on 10 October 2008, and confirmed early suggestions that the explosion was caused by structural failure of the export pipeline due to significant corrosion.
[5] Apache's managing director, Tim Wall, said, "It's pretty easy to say there is a lot of damage here and we are looking at alternatives to try to get gas to market as soon as possible but it will be at least several months before we have partial sales.
[7] Approximately 80-90% of the island's gas is used by industrial customers, with small amounts provided to Synergy, the state's largest electricity retailer.
[9] Western Australian Premier Alan Carpenter said this was unnecessary because the National Offshore Petroleum Safety Authority was investigating and it could compromise their inquiry.
[11] 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.
[12] 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.
[12] 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.
[16] 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.
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.
"[20] 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.
[28] While household gas supplies were largely unaffected, some businesses faced higher energy prices, most notably in the manufacturing and mining sectors.
[34] On 13 June, BHP Billiton brought forward the closure of its nickel smelter in Kalgoorlie by four months, which increased its gas supplies for its Worsley Alumina refinery.
[34] Oxiana Limited, soon to be the world's second-largest zinc producer, used standby diesel power at its Golden Grove mine until 6 June, when they obtained an alternative source.
[12] Woodside Petroleum's North West Shelf Venture increased production of natural gas to meet Apache Energy's shortfall.
Apache's managing director Tim Wall said it was a small quantity of relief;[7] Premier Carpenter said Woodside was providing an extra 50 terajoules of gas per day for the domestic energy grid.
Wesfarmers managing director, Richard Goyder, said, "At this stage, our best estimate is that the pre-tax impact on group profit will be up to $20 million per month at the current level of gas supply.
The subsidiaries affected are CSBP, which can no longer produce ammonium nitrate, Wesfarmers LPG, which has delayed commissioning of a new liquid natural gas plant in WA, and Premier Coal, whose sales have been reduced due to the closure of some of its customers, such as Iluka Resources.
[39] Western Australian Trotting Association chief executive, Rob Bovell, said if they were forced to move races at Gloucester Park from night to day, they would "probably lose half a million dollars in turnover and our customers would drop by 70 percent.
[40] Perth's tallest building, Central Park, turned off its heating on 17 June, with General Manager Tim Ward saying, "We're not expecting anyone to be anything but compliant".
Phase 2, a further 20% decrease, would result in "reductions in elective surgical procedures", "prioritisation of equipment for sterilisation", sourcing oxygen supplies from interstate and restricting patients' showers to "four minutes, second daily".
The state's other major carbon dioxide supplier, Air Liquide, also shut down production, leading to fears that WA's largest pork abattoir would close.
Apache produced a comprehensive "corporate response" to a set of written questions provided by NOPSA, seven weeks after receiving the request.
The report notes that "these matters directly impacted on the ability of the investigation team to develop its findings within the agreed time period and resulted in aspects of some lines of inquiry not being fully settled".
[46] Written submissions were made by numerous business and industry bodies, and six days of public hearings in Perth, Bunbury and Canberra were held during October.
[47] Written submissions to the inquiry included claims of unfair allocations of gas,[48] inadequate communication of important information during the crisis,[49] and the scale of the impact on individual businesses and industries.
In terms of the macroeconomic impact of the gas crisis, the Committee relied heavily upon State Treasury forecasts provided during its inquiry, including that "the June 2008 disruption in gas supplies... is expected to cost the Western Australian economy around $2 billion in Gross State Product (GSP) terms, with roughly half of this impact in each of the June and September quarters of 2008.
According to the committee, the protocols were appropriate, and the residential supply "was crucial to ensure that negative health impacts were minimised, particularly as the incident occurred in winter.
[51] On 24 May 2012, the Western Australian government's minister for Mines and Petroleum Norman Moore tabled in parliament the Bills-Agostini Report, and further public comment has come from lawyers representing Apache in response.
