PERTH (miningweekly.com) – Western Australia has reported its first quarter of domestic gas production growth since 2008, market analyst EnergyQuest reported on Wednesday.

However, nationally, petroleum, oil and gas production all dropped in the three months to September, with Australian petroleum production down 5.9% in the quarter, falling to 138.1-million barrels of oil equivalent.

In its ‘EnergyQuarterly’ report, EnergyQuest noted that electricity generation on the east coast also decreased - by 3% - reflecting a warmer winter and soft industrial demand. 

“The Abbott federal government has its work cut out for it - some things are within its control, such as removing duplication between state and federal environmental regulations - and they have made an early start,” EnergyQuest CEO Dr Graeme Bethune said.

“Other areas are proving, and will continue to be, harder - like getting legislation through the Senate to abolish the carbon tax, and facilitating onshore gas development in New South Wales and Victoria in the face of opposition from Coalition state governments,” he said.

Bethune noted that onshore oil and gas was essentially a state matter and recent decisions in New South Wales and Victoria were not encouraging for development in those states.

The Victorian government has outright banned fracking until 2015, while the New South Wales government has placed firm restrictions on the coal seam gas industry in the state.

“The big question is how easily or not the federal government can implement key policies that currently rely on the Senate or state government policies,” said Bethune.

The EnergyQuest report comes shortly after the Australia Energy Market Operator (AEMO) warned of possible supply shortfalls in New South Wales, and possibly Queensland.

In its '2013 Gas Statement of Opportunities' report, AEMO warned that if current gas production in Queensland and South Australia were prioritised for export, there would be flow-on effects to New South Wales, with potential shortfalls of between 50 TJ/d and 100 TJ/d over winter peak demand days from 2018.