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A 'Refined Bogan'
8,695 Posts
Discussion Starter · #1 ·
Last week in the north west of WA one of the major suppliers of natural gas for energy had an explosion in one of their pipelines, and it seems we are now feeling the effects, in the economy.

Gas blast forces Alcoa to declare 'force majeure'
* June 11, 2008 - 2:18PM

Aluminum producer Alcoa declared force majeure because of gas supply disruptions from an explosion in Australia, and said its second-quarter profit would be 2 to 3 cents a share lower as a result.

Alcoa of Australia, which is 60% owned by US based Alcoa and 40% owned by Alumina, said in New York on Tuesday it was declaring force majeure on its supply contracts for alumina, the raw material it uses in its smelters to produce aluminum.

Under force majeure clauses, certain conditions of a contract may be suspended without the supplier incurring a financial penalty.

The action follows an explosion on June 3 at Apache Energy's Varanus Island facility in Western Australia state. The explosion shut the Apache's gas production operations, disrupting power supplies to Australia's key mining region.

Western Australia supplies about a third of the world's iron ore, 20% of the gold and tens of thousands of tonnes of copper, nickel, zinc, lead and other industrial staples.

The gas outage has forced miners to cut production while scrambling for alternative fuel sources.

Alumina shares closed down 1.7%, or 9 cents, at $5.29.

Alcoa of Australia is still receiving gas from another supplier, but the full extent to which alumina production will be affected is uncertain, the company said.

The financial impact on Alcoa second-quarter results is expected to be between 2 cents and 3 cents per share, it said.

BHP Billiton, which produces nearly 3 million tonnes of alumina from its Worsley refinery in Western Australia, as well nickel, iron ore and other minerals from other sites using gas from Apache, said the shortage was hitting production but predicted little impact on earnings.

"We view the gas situation in WA (Western Australia) with some concern,'' chief executive Marius Kloppers said in an interview on Sky Business Chanel. "There's no doubt there's been an impact.''

About a quarter of BHP's profits are generated in Western Australia.

Other miners in the region were bracing for declines in productivity, industry and local government officials warned, after Apache said it would be two months or more before gas supply was restored.

After finding other sources of gas, Minara Resources, Australia's second largest nickel miner after BHP, cut its forecast output this year to between 31,000 tonnes and 35,000 tonnes from 34,000 to 38,000 previously.

Gas supplier Woodside Petroleum has said it is capable of making up only a fraction of the lost Apache output, which accounts for about a third of Western Australia state's overall requirements.


Gas plant explosion puts BBP on hold
* Scott Rochfort
* June 10, 2008

BABCOCK & Brown Power has again rattled investors' nerves after placing its shares in a trading halt pending the release of a profit downgrade.

The cash-strapped power company called for the trading halt before the market opened yesterday, warning it was "still in the process of assessing the impact" of gas supply disruptions from a recent explosion in Western Australia.

Despite playing down the impact of the explosion of an Apache Energy gas processing plant last week, BBP said yesterday it expected "some short-term reduction in earnings through the period of gas supply reduction".

BBP distributes gas to West Australian homes via its Alinta retail business.

"The impact on the industry and on BBP in particular will be subject to a range of factors, but not limited to: alternative supply options, statewide energy demand management, the duration of gas supply disruption and insurance recoveries," the company told the ASX.

The warning comes at a bad time for BBP, whose shares have fallen 64 per cent in the past year.

Last week, it said it had appointed UBS to help sell several power stations in a bid to raise cash. Despite refinancing a $2.7 billion debt last week, BBP is yet to roll over a $360 million debt facility due to expire in August. The company has also warned of a $300 million funding shortfall in its capital expenditure program, which it is expected to fix through several asset sales. Shares in the company plunged last month when BBP suggested a capital raising could fix the hole in its balance sheet.

Another worry is that analysts predict BBP could suffer another $230 million to $270 million funding shortfall when two power plants open later this year.

A BBP spokesman denied there was anything untoward in the company calling for a share halt pending the profit update.

The company was awaiting feedback from Apache on the impact of the gas explosion, which has affected 30 per cent of Western Australia's gas supplies.

â– The explosion has led nickel producer Minara Resources and goldminer Newcrest to cut their production forecasts for the full year. Minara has cut forecast production from its Murrin Murrin operation to 31,000 to 35,000 tonnes of nickel for 2008. Newcrest said gold output from its Telfer operation would be cut by about 30,000 ounces.

Federal Government offers help over gas crisis
11th June 2008, 14:00 WST

The Federal Government has offered WA help after an explosion left gas supplies in the State severely disrupted.

Acting Prime Minister Julia Gillard today said supplies had been cut by 30 per cent after last week's blast at Apache Energy's Varanus Island gas processing plant.

She said the blast would have an impact on households needing gas in winter, as well as businesses.

“This is obviously a major matter affecting Western Australia and the Western Australian economy,” she told reporters in Sydney," Ms Gillard said.

“It is not a matter that is going to be remedied overnight in terms of the return of full supplies.”

Ms Gillard said she had discussed the issue with WA Premier Alan Carpenter, offering help.

“It is a significant problem that is going to have ongoing economic and social consequences,” she said.

“We are going to be working with the West Australian government on addressing those consequences.”


Coal units to be brought on line to ease gas crisis
Posted June 11, 2008 20:31:00
Updated June 11, 2008 21:05:00

The State Government will recommission a mothballed coal fired power station to boost energy supplies in the wake of the gas shortage.

Collie's Muja A-B station was decommissioned last year.

Three of its four units will now be brought back online, the first within six weeks.

The Premier Alan Carpenter has acknowledged it is not as environmentally friendly as new generators.

"The Minister for Energy, after discussion between us in government, has instructed Verve to prepare Muja A and B power station for possible return to service," he said.

"The facility will require relicencing by the Department of Environment and Conservation and a letter to this effect has been drafted to encourage that requirement.

The Minister for Energy Francis Logan says the move will allow Verve to use more coal to generate electricity, allowing gas to be used for generators and industries that need it.

WA gas crisis poses threat to economy
George Megalogenis and Sarah-Jane Tasker | June 12, 2008

WESTERN Australia is facing a crippling gas supply crisis that could deny the nation significant export revenue from the China-led mining boom at a critical phase in the economic cycle.

Premier Alan Carpenter warned yesterday he might eventually need to invoke emergency powers to seize control over all gas and electricity supplies after an explosion at akey mining site last week cutoff one third of the state's gas supply.

The gravity of the situation was underlined yesterday when Alcoa Australia declared "force majeure" - the get-out clause resource companies invoke when they cannot meet all of their contractual obligations because of a natural disaster, riot or act of war.

Mr Carpenter said the disruption to gas supplies - caused by the explosion at Varanus Island, off the northwest West Australian coast last Tuesday afternoon - was not yet serious enough to invoke special emergency powers. But the Government could consider that option if the shortage worsened or other factors came into play. He said he had spoken to Acting Prime Minister Julia Gillard about the possibility of getting access to emergency diesel supplies stored on Defence Department land atWestern Australia's Garden Island.

Last night, West Australian Energy Minister Fran Logan said a coal-fired power station, which was decommissioned last year, would be returned to service. He said the Muja AB power station at Collie, south of Perth, would be used as a back-up, allowing 25 terajoules of gas to be used by industries that desperately needed it.

While gas and electricity supplies to domestic residential customers are protected under legislation introduced by the state Government in 2006, the shortage of gas has caused many state businesses to reduce or shut down production. Some have switched to the more expensive diesel to generate power but most have found the cost prohibitive and others warn they have only enough diesel to last a few weeks rather than the months it will take to restore full gas supplies.

Miners in the state's booming resources industry have been hardest hit, as have theconstruction and hospitality industries. The West Australian Chamber of Commerce and Industry said yesterday 14per cent of local businesses could shut down.

Alcoa's giant US parent said its second-quarter earnings were expected to be cut by between $12million and $17million to reflect the extra cost of sourcing gas and diesel.

Alcoa, which operates a number of bauxite mines and alumina refineries with joint-venture partner Alumina, gets 25per cent of its energy from Apache Energy's gas plant on Varanus Island.

A spokesman for Alcoa said the force majeure was a precautionary measure: "We are continuing production, which is down a bit, and we are fuelling our energy needs with diesel supply." But the disruption to gas supply is expected to last at least two months, when Apache expects only partial gas deliveries to resume. Alcoa conceded "we have enough diesel to last us for weeks, but not months".

The Rudd Government is banking on the mining sector to return the nation's trade account to surplus for the first time in six years. Last month's federal budget forecast a return to surplus in 2008-09, with the trade deficit in May showing the biggest monthly contraction on record as it fell to $957 million from $2.55billion in April.

But the disruption to gas supplies from the explosion at Varanus Island, off the northwest West Australian coast last Tuesday afternoon, could have knock-on effects for the export and domestic economies.

Mr Carpenter yesterday admitted the state was in "a very, very serious situation and we have to confront that". "We're not at the point yet of invoking emergency powers so we shut down with rolling stoppages, blackouts, brownouts, which is what's happened in other jurisdictions around the world when these sort of circumstances arise," he said. "If everybody co-operates, we can manage."

BHP Billiton said yesterday that it was still in a strong position regarding energy supplies for its Nickel West division in the West Australian goldfields. BHP chief executive Marius Kloppers told Sky News he had "some concern" about the gas supply, but that it should not have a major impact on the company's operations.

Minara Resources, a large nickel producer, said on Tuesday its full-year production would be cut by about 8 per cent because it could not get access to alternative sources of gas.
Mr Carpenter, who admitted the state's energy network was "running flat-out", said he had spoken to Ms Gillard about the possibility of emergency access to military diesel supplies.

Although the extra diesel supplies were not needed yet, Mr Carpenter said he had to raise the prospect with Canberra.

Ms Gillard said her Government recognised the seriousness of the matter. "It is not a matter that is going to be remedied overnight in terms of the return of full supplies," she said.

Mr Logan said while there were hurdles in restarting the old power generators, which may take up to six weeks, the Government had little choice.

"These units are old and not as environmentally friendly as new generators. However, the state is facing a significant gas shortage and we need to look at all avenues," he said.

Additional reporting: Elizabeth Gosch, Tony Barrass


i was actually suprised there wasn't a thread about this already

A 'Refined Bogan'
8,695 Posts
Discussion Starter · #5 ·
All businesses and buildings in the cbd have been forced to turn off power during the night, soi that means no signage, no lights on any building in the cbd, as evidence some of us will have pics tommorow night.

A 'Refined Bogan'
8,695 Posts
Discussion Starter · #6 ·

Premier appeals for public to conserve power
17th June 2008, 17:00 WST

Premier Alan Carpenter has appealed on prime-time TV and radio for West Australians to conserve power during the state's gas crisis.

Mr Carpenter recorded the announcement today to reinforce the message that householders and businesses must limit their electricity and gas use following the Varanus Island gas plant explosion and fire on June 3.

VIDEO: Premiers announcement on the gas crisis. Click here

The accident cut off 30 per cent of WA's domestic gas supply, leading to thousands of workers being either laid off or asked to take annual leave until supplies are resumed.

Up to 15 per cent of West Australian companies could be forced into a temporary shutdown, the WA Chamber of Commerce and Industry (CCI) says.

Several WA mining and industrial companies, including exporters, have been forced to scale back production because of cuts to gas supplies.

Others using diesel to generate power, such as the alumina giant Alcoa, warn they will run out of diesel before normal gas supply is restored.

Mr Carpenter today sought to reassure West Australians that his government was working with the federal government to deal with economic hardship facing families as a result of the shortage.

“This is a serious situation which affects us all,” he said in his address to the state's residents.

“Gas is not only a direct fuel source for industry, we use it in our homes and it's used to generate a large proportion of our electricity.

“While the state government has the power to guarantee gas supplies to essential services and households, some industries and businesses have been hit hard.

“A number of them are being forced to scale back operations and others have temporarily closed.

“The company that owns the facility, Apache, has told us it'll take two to three months to restore partial gas supplies and even longer for full restoration.”

“Every effort is being made to provide additional supplies of energy.

“We've had great cooperation from industry and business who are also looking at ways to reduce their energy demand.”

Mr Carpenter appealed to residents and businesses to free up supplies for industry by minimising the use of heaters, turning off lights and reducing shower times.

“Just turning off appliances at the wall can save up to ten per cent of household electricity use,” he said.

“We've set up hotlines for any advice you may need. Please use them.

“Saving gas, saving electricity, saves you money and can save someone's job. We need your help.”

The Property Council of WA says offices and shops will turn off or reduce lighting, electric signs, heating and power from computers, as well as shutting down some lifts.

The council's executive director Joe Lenzo said today a letter co-signed by the government was going out to tenants of office buildings and shopping centres asking them to “join the party” on energy conservation.

“We're going to have to get used to cold offices and dimly lit shopping centres,” he said.

Meanwhile, industry groups today called for greater exploration incentives to bring more oil and gas on line and for Apache Energy to separate its two sales pipelines from Varanus Island to the mainland.

This would help WA diversify its energy supplies, the Association of Mining and Exploration Companies said.


Power use drops as crisis bites
* Chalpat Sonti
* June 17, 2008 - 4:31PM

The first figures on electricity consumption following the gas crisis are out, and they show WA households have started to take up the call to reduce power use.

As Premier Alan Carpenter makes this plea to households to cut down on electricity and gas use, Western Power said there had been a reduction of about 2 per cent this morning.

The 40-50 MW drop in usage was "moderate" and "while we can see a reduction, people can do more", a spokeswoman said.

That was echoed by Alinta, which said it did not differntiate between domestic and industrial use, so did not know if the public was actually cutting down on gas use.

However, a spokesman said energy use varied with the weather, and with the two coldest nights of the year so far - with minimums of 4 degC - expected tomorrow and Thursday, "if residents increase their use, there's less available for business".

Alinta has been allocating gas to businesses about 3pm each day for the next day.

"We've got to keep pushing that message, how critical it is that residents limit use to what is necessary," he said.

6,728 Posts
As far as I'm aware, all of QLD to Tas to SA are all connected. I'm not sure about the NT, but if Perth isn't then I wouldn't be surprised if it wasn't either. An interesting fact is the undersea cable to Tassie is wholly owned by the Singapore government.

266 Posts
As far as I'm aware, all of QLD to Tas to SA are all connected. I'm not sure about the NT, but if Perth isn't then I wouldn't be surprised if it wasn't either. An interesting fact is the undersea cable to Tassie is wholly owned by the Singapore government.
I was in Tas last month and they were saying how they don't have gas over there yet? Came up as there was a blackout at the house i was staying at and had cold water due to electric powered hot water.


40 Posts
I was in Tas last month and they were saying how they don't have gas over there yet? Came up as there was a blackout at the house i was staying at and had cold water due to electric powered hot water.

I think he was talking about the National Electricity Market, not the Gas Market. The NEM is the world's largest (geographically) regulated electricity market (North America and Europe are all split up into lots of pieces). It includes QLD, NSW, Snowy (until the end of this month), Vic, SA, and Tasmania.

The reason the electricity market has been pulled into this conversation is because they use gas to produce power. Without gas WA has a limited available electricity supply and because it is not connected to the other states it can't pull power from them.

(BTW, as far as I am aware there are actually two electricity markets in WA. One in the south and one in the north. The two aren't connected even within the same state!)

4,167 Posts
WA has the South West Interconnected System (SWIS) and then all the rest of the state has stand alone systems for each town. Many of the towns are connected to nearby mines etc.

The SWIS gets most of it's household power from gas and coal power generation while most of the heavy industries have their own co-generating capacity on-site. The heavy industries are still connected to the system and they have contracts to supply power to the grid in periods of high demand. Basically how it works is the government pays the industries a certain amount of money per year on the condition that the businesses shut down and sell all of their power to the grid during periods of exceptional demand (usually extreme heat days in summer). This is a necessity because unlike the NEM in the eastern states, WA doesn't have the option of buying power from interstate to meet demand. It also saves the government huge amounts of money because they do not need to build power generation capacity which is needed only a few days of the year.

A 'Refined Bogan'
8,695 Posts
Discussion Starter · #14 ·
here are the pics of the city with the lights off similar to earth hour thanks to the gas shortage

sorry i didn't have a tri-pod

A 'Refined Bogan'
8,695 Posts
Discussion Starter · #15 ·
perhaps this could be an incentive to go for more renewable energy sources.


Eagles Saturday night game likely to go ahead
19th June 2008, 15:30 WST

West Coast’s game against Geelong at Subiaco Oval on Saturday night is likely to go ahead as scheduled after Western Power today quashed rumours that using the lights at the ground would put a strain on the State’s power supply.

Western Power system operations general manager Ken Brown this afternoon confirmed that Western Power had recommended the game go ahead as planned.

There had been speculation the game could be rescheduled to a daytime fixture to avoid placing extra burden on the State’s crippled power supply in the wake of the Varanus Island gas explosion.

Earlier today, WA Football Commission director of facilities Geoff Glass said this Saturday’s evening football game between the West Coast Eagles and Geelong would go ahead despite calls from WA Premier Alan Carpenter for businesses and households to switch off the lights and reduce power.

Subiaco Oval’s four light towers are powered to reach 1500 lux, a measurement that allows television cameras to capture clear images.

In one night, over four hours, the stadium can emit enough energy to power more than 1300 homes, according to Western Power.

Mr Glass said while air conditioning, heating units and lights in corporate boxes could be reduced, there were no plans to reschedule Saturday night’s game and switch off the oval’s outdoor lighting.

“We spoke about it earlier in the week, but it’s only on game day that we use a lot of power,” he said.

“The extra costs and inconvenience caused by re scheduling games including flights and venue uses could outweigh any savings that we might be able to make in terms of electricity costs.”

While yesterday the Eagles bought their scheduled night-time training forward to save lighting power, spokesman Gary Stocks said changing night games was a decision for the AFL to consider.

AFL spokesman Patrick Keane said there would not be any time changes to the 2008 football season.

“The West Australian Government has kept us updated with what’s happening with the gas crisis,” he said.

“They understand it’s an extremely complex matter for us to change a game particularly on short notice and at this point they haven’t asked us to.”

Yesterday AFL chief executive Andrew Demetriou said last night that he could not rule out a change to the game’s start time.

"We haven't been asked by the WA Government to move the game, but if that occurred, obviously we would do the right thing," Demetriou said.

"The state is in the middle of a horrific crisis so we'll just wait and see."

A spokeswoman from the Office of Energy, the group responsible for deciding which services can cut back on power, said they would not call for an end to night games.

“Effectively the amount of energy used to light a game at night is less that what would be used if those thousands of people were at home with lights and other services operating,” the spokeswoman said.

Late last week WA Sports Minister John Kobelke said he didn’t think the State was at a critical point where AFL night games should be rearranged.

“We are conscious of all power use given the serious situation confronting the State,” Mr Kobelke said.

“We are not yet at the point where a major shift in scheduled events such as the AFL is required.

“We will raise the issue with the AFL should the situation become such that we would need to make alternative arrangements to drastically reduce power use.”

WA Trotting Association chief executive Rob Bovell said he had been assured there would be continued power supply to Gloucester Park this weekend, but he was still planning for the worst.

“If they are going to tell us they don’t want us to turn our lights on we have to reorganise our business to suit that,” he said.

“We are given time slots on our TAB and television coverage and so if we were suddenly told we could no longer racing at night we would probably lose half a million dollars in turnover and our customers would drop by 70 per cent.

“Clearly this would cause major damage to us financially because our business is set up to race at night time.

However if we are using energy that is affecting emergency services we will close down tomorrow.”

Heated public swimming pools across Perth including Fremantle Leisure Centre and Belmont Oasis have turned down the heaters to reduce power while some suburban sporting centres are switching off air conditioning units and lights on unused courts.

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