New gas projects are weighing on the economy as part of the government’s central climate policy

“The design requires protection devices that make a proportionate contribution to the target,” she said.

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Verstegen said two Woodside projects, which contributed more than 80 percent of emissions from the WA projects, would cost other industries more than $7 billion by increasing the emissions reductions they demand.

The estimate – based on a carbon price of $40 per tonne – did not take into account any additional costs from an increase in the price of Australian carbon credits due to increased demand.

The two projects – a $17 billion expansion of the Pluto gas export facility to process gas from the Scarborough field and a proposed extension of the life of the existing North West Shelf facility to 2070 – would also reduce global emissions from the burning of the increase gas enormously.

Verstegen said the total requirement of the 10 projects in carbon allowances is equivalent to 23 times the offsets delivered in 2021 under the federal government’s emissions reduction fund.

“Australia is consuming a huge chunk of Australia’s limited supply of offsets, which deprives other parts of the economy of opportunities to reduce their emissions,” he said.

“Australia’s climate policy must support the phase-out of fossil fuels and not subsidize increased use of fossil fuels by supporting these very large new projects at the expense of other Australian companies.”

Woodside isn’t the only gas exporter looking to expand.

Santos is developing the CO2-rich Barossa field to be exported from its Darwin facility, and last week Reuters reported that Japan’s Inpex plans to expand its neighboring Ichthys gas facility by 2030.

Any company can reduce actual emissions, buy credits from other entities that have exceeded their required emission reductions, or purchase carbon offsets. Currently, Australian Carbon Credit Units are the only recognized carbon offset, but Bowen has signaled that international credits could be recognized in the future.

The Grattan Institute’s energy and climate director, Alison Reeve, said she generally supports new plants being given baselines to allow for carbon emissions because they may use newer, less polluting technology than existing plants, but the treatment of the new oil and Gas production is “a really difficult question”.

Reeve said what the high-priced international gas market looked like after the Ukraine war would have a bigger impact on new gas development than the safeguard mechanism.

“We’re seeing a steady decline in demand for gas internationally,” she said, and some countries will become increasingly cautious about relying on imported gas.

Woodside and oil and gas producer lobby group APPEA were both asked about the higher cost of cutting emissions that new gas projects are imposing on existing industry, but did not respond.

APPEA chief executive Samantha McCulloch said access to international carbon credits is important.

“Inappropriate restrictions on the availability of offsets in the market will ultimately increase costs and slow the pace of reaching net zero across the economy,” she said.

https://www.smh.com.au/environment/climate-change/new-gas-projects-burden-economy-under-government-s-key-climate-policy-20230112-p5cc46.html?ref=rss&utm_medium=rss&utm_source=rss_environment New gas projects are weighing on the economy as part of the government’s central climate policy

Brian Lowry

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