IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v95y2019i308p90-113.html
   My bibliography  Save this article

Western Australia's Domestic Gas Reservation Policy: Modelling the Economic Impact with a Computable General Equilibrium Approach

Author

Listed:
  • Kelly Neill
  • Peter Hartley
  • Rod Tyers
  • Philip Adams

Abstract

The gas reservation policy of Western Australia (WA) diverts 15 per cent of liquefied natural gas exports to the local market, suppressing domestic gas prices. To examine the policy's effects, this paper employs a detailed model of the WA gas market that incorporates project‐by‐project supply, the very large fixed costs typical of gas supply projects, foreign ownership on both sides of the market and oligopolistic pricing power. This model is interlinked with the established Centre of Policy Studies’ Victoria University Regional Model of the Australian state and national economies and shows that the policy, as it has been applied to the Gorgon and Wheatstone projects, imposes an overall net loss to the nation of around $600 million each year. The net loss to Australian households is estimated to be $300 million. Moreover, no net long‐run advantage is seen to be conferred on WA's workers or consuming households.

Suggested Citation

  • Kelly Neill & Peter Hartley & Rod Tyers & Philip Adams, 2019. "Western Australia's Domestic Gas Reservation Policy: Modelling the Economic Impact with a Computable General Equilibrium Approach," The Economic Record, The Economic Society of Australia, vol. 95(308), pages 90-113, March.
  • Handle: RePEc:bla:ecorec:v:95:y:2019:i:308:p:90-113
    DOI: 10.1111/1475-4932.12459
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1475-4932.12459
    Download Restriction: no

    File URL: https://libkey.io/10.1111/1475-4932.12459?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:95:y:2019:i:308:p:90-113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.