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Bloomberg: APEC Energy Ministers to Discuss Carbon Emissions (Update2)

By Gemma Daley and Angela Macdonald-Smith

May 24 (Bloomberg) — Asia-Pacific Economic Cooperation energy ministers will next week discuss carbon emissions as they seek to improve energy security while reducing environmental effects, an Australian minister said.

The talks by energy ministers from 21 APEC nations, including the U.S. and China, will feed into the leaders meeting in Sydney in September, Australian Industry Minister Ian Macfarlane said today. APEC nations, which include the U.S. and China, are responsible for 60 percent of global energy demand.

“There will be a discussion,” about emissions, Macfarlane told reporters in Canberra. “It’s a stepping stone to the leaders meeting.” No specific APEC emissions trading plan will be discussed, he said later in a telephone interview.

Australia and the U.S. have refused to sign the Kyoto Protocol aimed at reducing greenhouse gas emissions blamed for global warming. A taskforce including Xstrata Plc’s Peter Coates, Treasury Secretary Ken Henry and BHP Billiton Ltd.’s Chris Lynch will report to Australian Prime Minister John Howard on May 31 on whether to introduce an Australian carbon trading system.

“We need to ensure that if we do decide to go forward with a carbon scheme, that it is meticulously designed and based on thorough research and good economic modeling with as little politics as possible,” Macfarlane said. “Kyoto has been a spectacular failure, most member countries won’t achieve their targets and they are trading away their sins in return for a very small amount of money.”

Climate Change

A one-day APEC energy business forum to take place in Darwin on May 28 may urge ministers to agree to cooperate on climate change, said Bret Mattes, a former BHP Billiton Ltd. petroleum executive who will introduce the forum.

“We also think the APEC governments should fund an organization to do proper work on cross-boarder trade restrictions for natural gas, for example,” Mattes said.

Business wants to see a common mechanism for the pricing of carbon across the region, said Robert Pritchard, the head of Sydney-based consulting firm ResourcesLaw International, who will attend the energy ministers meeting.

“With the right policies in place, the business sector will accept the challenge and make the investments that need to be made in clean energy projects,” he said. A common carbon price would reduce “costly frustrations” that investors experience when they apply for project development approvals and are asked to implement “unworkable” conditions, and would speed up investment, he said.

Shell, Rio

Russell Caplan, chairman of Royal Dutch Shell Plc’s Australia unit, and Gerry Hueston, president of BP Plc’s Australian unit, will speak at the business forum. Rio Tinto Group’s Australia Managing Director Charlie Lenegan and ministers from Australia, the Philippines, Mexico and Thailand are due to take part.

Shell Australia, which explores for and produces oil and gas, as well as operates two refineries, takes into account a cost on carbon when it evaluates any project for investment, Caplan told reporters earlier this month in Melbourne.

“We do consider the cost of carbon in any new investment that we make,” he said.

Any rules that are developed on carbon trading or emissions limits needs to take into account investments already made in cutting or mitigating emissions, Caplan said.

The two main topics of discussion next week will be “achieving energy security and addressing environmental concerns,” Colin Heseltine, executive director of the APEC Secretariat, said in an interview.

Scientists say global warming caused by man-made emissions of carbon dioxide and other so-called greenhouse gases is causing glaciers to melt, sea levels to rise and coral reefs to die out.

Gas, Uranium

“All countries are looking at how to reduce our greenhouse gas emissions and that’s through a range of measures, such as energy efficiency, cleaner technologies on coal and gas and using uranium,” Macfarlane said.

Australia is the world’s biggest exporter of coal, and the second-biggest exporter of uranium, used in nuclear fuel generation.

India’s forecast rising consumption of uranium will have a “knock-on” effect on boosting demand for Australian uranium, although Australia’s policy is that it won’t directly sell to India unless the Asian country signs the nuclear non- proliferation treaty, Macfarlane said in the interview. South Korea may also seek to boost uranium purchases, he said.

Japan, South Korea, Taiwan and China are among nations that plan to increase liquefied natural gas purchases even as prices rise. Australian LNG ventures are set to capture almost at third of Asia’s supply capacity by 2015, taking market share form Indonesia and Malaysia, Sanford C. Bernstein estimates.

Australia has more than A$50 billion ($41 billion) of new LNG projects proposed by ventures headed by Woodside Petroleum Ltd., Inpex holdings Inc., Chevron Corp. and others.

APEC Energy Ministers will meet in Darwin From May 28-30. The 21 APEC members are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the U.S. and Vietnam.

The APEC energy ministers meeting will be followed by the two-day South East Asia Australia Offshore Conference, at which Timor-Leste Prime Minister Jose Ramos-Horta, U.S. Deputy Assistant Secretary, oil and gas, James Slutz and ConocoPhillips Australia President Joseph Marushack are due to speak.

To contact the reporter on this story: Gemma Daley in Canberra at [email protected] Angela Macdonald-Smith in Sydney at [email protected]

Last Updated: May 24, 2007 03:16 EDT and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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