This is a modest amendment about the interaction between WA and this national domestic gas scheme. Technically, the domestic gas reservation would apply nationally, but the bill gives the minister the power to carve out facilities covered by an existing scheme. It's clear that the minister's intention is to carve out WA facilities, and I support this. WA has had its own domestic gas reservation policy since 2006, and it makes sense not to simply impose a second overlapping obligation on exporters operating under that scheme.

But the WA scheme has its problems. It generally requires LNG exporters to make the equivalent of 15 per cent of their gas exports available to the domestic market, but the obligation is measured over the life of the project rather than year by year. The terms are negotiated project by project and they're confidential, and there are questions about whether some exporters are delivering what Western Australia needs. The Institute for Energy Economics and Financial Analysis estimates that WA gas producers supplied five to 10 per cent of their production to the domestic market between 2018 and 2024—clearly below the 15 per cent target. The DomGas Alliance, which represents major gas users, including Alcoa, Wesfarmers and Yara, says that since 2017 Woodside's Pluto LNG project has supplied just 3.7 per cent of the gas it's exported to the domestic market. If the Commonwealth is going to rely on the WA scheme as the reason for exempting exporters from the national scheme, we should have some confidence that the WA scheme will be honoured. That's the issue that my amendment addresses.

As the bill currently stands, the minister can reduce an exporter's federal obligation because an existing domestic gas reservation arrangement applies. The minister doesn't have to be satisfied that the exporter has arrangements in place to supply gas under the state scheme. That creates a fairly obvious gap. An exporter could receive relief from its federal obligation because the WA scheme exists without having arrangements in place to provide the gas that the WA scheme is supposed to secure. The exporter gets the benefit of the carve-out, but Western Australians may not get the gas. My amendment adds a simple safeguard; it keeps the government's existing test but requires that the minister be satisfied of one additional thing—that arrangements are in place for the exporter to supply or to arrange to supply gas to the domestic market in accordance with the reservation arrangements that apply to it. Importantly, this does not change the WA scheme. It doesn't remove the WA carve-out and it doesn't impose new obligations on WA exporters. It simply says that, if an exporter is going to receive the benefit of the carve-out, there should be arrangements in place to meet the WA scheme.

I acknowledge that this amendment doesn't solve every problem with the WA scheme; it only tests whether those arrangements are in place. It's a very low hurdle to meet, but that should make it easier to accept. This amendment will become more important as WA's gas market tightens. The Australian Energy Market Operator projects gaps in the WA market from 2030, with those gaps growing in the years that follow. Before projected shortages are used to make the case for new gas developments like Browse, with the significant climate pollution that that would bring, we should make sure exporters are delivering the gas they have already agreed to provide to Western Australians.

This is a modest amendment. If the WA scheme is the reason an exporter receives relief from the national obligation, the minister should at least be satisfied that the arrangements are in place to honour that scheme. I'd hope that this outcome would be supported by both sides of the House as well as the people and government of WA. It tells the gas exporters who are not delivering on their state based obligation that this isn't good enough. This is an improvement that delivers for Western Australians and Western Australia, and I commend the amendment to the House.