The Australian Petroleum Production & Exploration Association (APPEA) has criticized the Federal Government’s carbon policy  for failing to protect Australia’s gas export industry.

 

Chief Executive of APPEA, Belinda Robinson, said the export gas industry rejects the label of ‘big polluter’ when for every tonne of emissions produced in liquefying natural gas, up to nine and a half tonnes are removed from the atmosphere when substituted for coal in customer countries.

 

“Whether used in Australia or exported, gas has a big part to play in reducing global emissions and there is no rational reason for a policy that sees Australian gas use increase but exports constrained.

 

“It is a policy that risks driving emission reductions in Australia at the expense of greater emission increases elsewhere in the world.

 

The Government’s policy will initially see LNG producers receive up to 66 per cent of their permits, with this allocation falling to 50 per cent. It will be reviewed in 2014-15.

 

APPEA said that the policy  defines LNG  too narrowly (it only considers emissions from the LNG plant itself rather than the whole production process) and significantly reduces the degree to which producers can access free permits.

 

A recent Macquarie Equities report found nine of the world’s 10 most expensive (new and proposed) LNG projects are in Australia. The same report said: “Australian projects are not well placed if cost pressures continue to build”.

 

Ms Robinson said that fiscal and labour cost pressures already make Australian LNG projects the most expensive in the world.  

 

“The announced fuel tax credit reductions of between five and six cents per litre will also affect every oil and gas operation in Australia and cost tens of millions every year.

 

“Importantly, today’s announcements make no mention of the Government’s intentions regarding the 237 other climate change policies and programs already in existence and identified by a range of reviews as the barrier to reducing emissions at the lowest possible costs.

 

“Unless these programs and policies are withdrawn, the schemes announced today will simply add to these costly and inefficient programs.”