Gas crisis hits West Australian businesses

Businesses in Western Australia are being told to use less power as the state’s gas crisis enters its third week.

WA Premier Alan Carpenter says the crisis, caused by an explosion at Apache Energy’s Varanus Island plant two weeks ago, which wiped out 30% of the state’s supplies, will likely last up to 12 weeks, but it is unlikely the Federal Government would invoke emergency control over supplies as long as voluntary restrictions were followed by businesses and the general public.

Calls for energy cuts have come from both energy companies and the WA Government, with energy use at Parliament House cut by 17.5%.

In a crisis meeting yesterday organised by the Property Council of Australia, Carpenter also said the economic consequences of the shortage will not be felt until businesses decide whether they can afford to use expensive diesel-powered generators, despite the Australian Navy’s offer of 16 million litres of diesel fuel.

Businesses are growing increasingly frustrated, as they are not being told until the afternoon how much energy they are able to use during the following day’s trade.

Joe Lenzo, executive director of the Property Council of Australian’s WA division, says: “This gas crisis has slowed the economy down, there’s no doubt about that.

“We’ve had to do certain things to try to alleviate the problem to try to alleviate electrical load. There are concerns among retailers that people will no longer come and shop because they’re less inviting, etc. The state is going to suffer for the next three months; it’s not a short term problem,” Lenzo says.

“Nevertheless, the property industry has decided to play they’re part,” he says. “Generally, the owners have been receptive and they’re going to do what they can. Industry is starting to play the game.”

But Peter Pike, state manager for Centro Properties Group, says any negative consequences on the retail industries are yet to be felt. “In retailing at the moment, it doesn’t seem to have had any effect. We’ve looked at what means we can to reduce consumption, but from our perspective, it’s fine,” he says.

The crisis continues to trickle into other industries. The Kwinana desalination plant has had its power consumption cut from 22 megawatts to four megawatts a day, in an attempt to shift energy into other areas.

The shortage has dealt a blow to expectations for higher national economic growth. Federal Resources Minister Martin Ferguson told Federal Parliament that the “disruption to economic activity is likely to flow on to reduced exports”.

Meanwhile, alumina company Alcoa has issued a force majeure clause to its customers, which excludes the company from liability, arguing the explosion crippling supplies was not under its control.