Australia excludes LNG from greenhouse gas measures

The Australian government has agreed to exclude LNG from the nation�s overall greenhouse gas reduction measures. It also has postponed plans to create a domestic greenhouse gas emissions-trading regime until similar trading schemes are introduced elsewhere. The decision has been welcomed by the Australian petroleum industry.


MELBOURNE�The Australian government has agreed to exclude LNG from the nation�s overall greenhouse gas reduction measures, sending a sigh of relief through the Australian petroleum industry. It also has postponed plans to create a domestic greenhouse gas emissions-trading regime until similar trading schemes are introduced elsewhere.

The decision has boosted prospects for Australia�s industry, which previously had been under a cloud that threatened to restrict its ability to compete against international LNG producers such as Indonesia, Malaysia, Oman, and Qatar, none of which are affected by greenhouse gas abatement programs.

The Australian LNG industry has lobbied for many months to protect its global position. The most immediate relief is felt by the Woodside Energy Ltd.-led North West Shelf consortium that is planning a 50% increase in capacity to its LNG project. It now seems likely that all six partners will commit to the expansion within months.

�We welcome the government�s decision as we prepare to commit to a multibillion-dollar expansion of the Australian LNG industry,� said Chris Haynes, Chief Executive Officer of the North West Shelf Venture.

�On a lifecycle basis, LNG used in electricity generation produces 30-40% less greenhouse emissions than electricity generated from coal or oil. By increasing Australia�s LNG exports we can make an even greater contribution to global greenhouse gas abatement.

�Investors can now be satisfied that Australian LNG projects will not be made uncompetitive as a result of greenhouse abatement costs incurred in Australia that are not borne by our overseas competitors,� Haynes added. �The government is therefore to be congratulated for establishing a commonsense greenhouse policy framework, one which will help Australia extract wealth from its large gas resources, and one which will deliver significant global environmental benefits.�

The decision also was welcomed by the Australian petroleum industry, and the Australian Petroleum Production & Exploration Association (APPEA) has called it a big win for global greenhouse gas abatement efforts and a major plus for investor certainty, job creation, and regional development. Executive director Barry Jones said the decision was the most significant contribution to policy certainty since Australia�s commitment to the Kyoto greenhouse negotiations. He added the decision was also good news for the minerals processing industry and a host of other sectors dependent on the resources industry.

The six equal participants in the North West Shelf Venture are: Woodside (operator); BHP Petroleum (North West Shelf) Pty. Ltd.; BP Developments Australia Pty. Ltd.; Chevron Australia Pty. Ltd.; Japan Australia LNG (MIMI) Pty. Ltd.; and Shell Development (Australia) Pty. Ltd.

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