We'll see how much people really care about emissions when it...

We'll see how much people really care about emissions when it starts to cost jobs and hyperinflate electricity prices ...

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Carbon price ‘to cost thousands of WA jobs’

17th September 2008, 6:00 WST



Thousands of WA jobs could be lost and the size of the State economy slashed if the Rudd Government’s emissions trading scheme is not changed to protect the LNG industry, Woodside Petroleum has warned.

In its submission on the Government’s ETS Green Paper, Woodside released economic modelling suggesting a carbon price of $20-$40 a tonne would raise operating costs on a typical two-train LNG plant 120 per cent, cut after-tax cash flows 29 per cent and lift its effective tax rate to almost 55 per cent.

Chief executive Don Voelte yesterday questioned the Government’s sincerity about Woodside’s concerns about the ETS, arguing bureaucrats were easy to access for talks but appeared to be taking a “tickthe-box approach” to industry issues.

Mr Voelte said it was clear the Government was only interested in cutting Australian greenhouse emissions and did not care what happened elsewhere. This hit the LNG industry particularly hard because its greenhouse benefits over coal in international markets were ignored by the proposed structure of the ETS.

He said ultimately it appeared the Government was not sure how to treat an industry such as LNG, which was part of the climate change solution. Under the Green Paper, the Government offers free carbon permits to emissions-intensive, tradeexposed sectors such as aluminium and concrete industries but LNG producers do not qualify.

Woodside said 75 per cent of its operations, in the gas and oil sector, would have to absorb the costs of an ETS. LNG projects were particularly at risk because they were capital intensive and it could not pass the cost of the scheme to customers.

Woodside highlighted its proposed Pluto project which was almost a third complete. If it was deferred because of the costs imposed by an ETS, GDP would be cut $17.6 billion, WA’s gross State product would be $28.6 billion lower while 4000 direct and indirect jobs would be lost.

Woodside is looking for a sector to be created as part of the assistance package proposed for emissions-intensive, tradeexposed industries that would be for industries with a net benefit on greenhouse emissions.

Mr Voelte said it appeared the Government was pushing through with its ETS without taking on board industry concerns. “They’re hell-bent to get something in by 2010. That’s achievable, but I don’t know how many people will be burnt out by it,” he said.

“They’ve put some selfimposed rules on themselves, but we haven’t seen the flexibility in the rules and haven’t been offered any olive branches.”

But development and sustainability manager for WWF, Paul Toni, said the Government had to stand up to claims by industries that they faced economic disaster from an ETS.

Mr Toni produced figures which showed substantial overestimates of costs by US businesses for ditching various pollutants in recent years. He said firms had a history of claiming the worst when faced with helping the environment.

The WWF wants a geothermal power plant operating by 2020, an independent authority to allocate transition support to emissions-intensive, tradeexposed companies and auctions for all pollution permits.

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