Woodside Petroleum chairman Michael Chaney has joined the business backlash over the Gillard government’s plans for a carbon tax, arguing that the move could lead to customers rejecting Australia as a supplier of liquefied natural gas or turning to dirtier energy sources such as coal.
Ignoring calls by Climate Change Minister Greg Combet for business chiefs to express their concerns about the tax behind closed doors, Mr. Chaney told hundreds of Woodside shareholders yesterday that it was “extremely important” that LNG be recognised as a clean fuel that could help reduce global emissions.
His comments came as Climate Institute chief executive John Conner hit out at the industry campaign against the costs of putting a price on carbon, releasing research showing that electricity price rises were primarily being driven by the cost of network upgrades and not the decision to price carbon.
Mr. Chaney is one of the nation’s most senior corporate leaders. He is also chairman of National Australia Bank and a former president of the Business Council of Australia.
“Woodside does not support the application of a carbon price to our trade-exposed exports at a time our competitors do not face such costs,” Mr. Chaney told Woodside’s annual general meeting in Perth.
“Placing a carbon price on Australian LNG risks two outcomes: customers either look past Australia for cheaper supplies of LNG produced by countries which do not have a carbon price, or they continue to use higher-emitting energy sources such as coal.”
Mr. Chaney’s comments echo those made by other LNG producers, who want the sector to receive full compensation for any extra costs imposed by a carbon price.
The Climate Institute research shows a carbon price of $25 a tonne would add about $3.86 a week to the average Sydney household’s energy bill in 2012-13, while rising network costs - which have nothing to do with a pollution price and would happen regardless - would add $7.88 a week to the bill.
The 20 per cent renewable energy target backed by both the ALP and the Coalition accounted for $1.25 a week for the average Sydney household.
“For around the cost of one sausage sandwich a week, putting a price on pollution will help change the investment and power generation decisions necessary to help put Australia on the path to a low-pollution, clean-energy future,” Mr. Connor said.
The research also shows Australia’s power sector ranks among the world’s top 10 most polluting, along with countries such as Botswana, Bosnia-Herzegovina, Mongolia and Estonia.
In an address to the National Press Club in Canberra yesterday, Northern Territory Chief Minister Paul Henderson said Australia needed to price carbon but argued against a carbon tax that would deter investment opportunities in the nation’s LNG industry.
“It is a significant issue for LNG producers and we are waiting to see the details,” he said.
“LNG is going to become more in demand as a transitional fuel to a cleaner generating sector right across the world. We have LNG in abundance in this nation. I don’t want to see a tax that’s going to compromise investment in the development of that industry.”
He said trade-exposed industries needed to be protected.
