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Carbon Plan Puts Unfair Burden on LNG, Woodside Says

Bloomberg.com

By Ben Sharples

June 2 (Bloomberg) — Woodside Petroleum Ltd., Australia’s second-largest gas producer, said the country’s proposed carbon pollution reduction system places an unfair burden on liquefied natural gas producers and may constrain exports of the fuel.

“We remain concerned with the planned cap and trade scheme in its current form,” Woodside Chief Executive Officer Don Voelte said at the Australian Petroleum Production & Exploration Association conference in Darwin today.

The government delayed the proposed start of emissions trading last month a year to mid-2011, citing the global recession. Producers of LNG, which is cleaner burning than coal, said last year the proposed carbon pollution reduction scheme may cut Australia’s output of the fuel by half of what it would otherwise be in 2030.

Woodside, 34 percent held by Royal Dutch Shell Plc, operates and owns one-sixth of the North West Shelf Venture, Australia’s biggest LNG producer, and is building the A$12 billion ($9.7 billion) Pluto LNG project. It’s among companies proposing some 10 LNG developments in Australia and Papua New Guinea targeting a forecast gain in demand in north Asia for cleaner-burning fuel.

Natural gas can reduce Australia’s output of carbon and shouldn’t be penalized when the country introduces a system placing a cost on emissions blamed for climate change, Santos Ltd. Chief Executive David Knox said yesterday.

‘Impost’ on LNG

Australia should avoid “adding a large impost” on LNG exports or giving large amounts of free emissions permits to coal-burning power stations, he said.

Climate-treaty talks take place in Copenhagen in December, where about 180 nations are due to negotiate an accord to replace the Kyoto Protocol, which expires in 2012.

Australia plans to cut its emissions by between 5 percent and 15 percent from 2000 levels in 2020. The nation would increase that target to 25 percent “if the world agrees to an ambitious global deal,” Prime Minister Kevin Rudd said May 4.

The government has proposed a A$10 a metric ton carbon price for a year until July 2012, from when the market will determine the cost.

To contact the reporter on this story: Ben Sharples in Melbourne[email protected]

Last Updated: June 1, 2009 20:50 EDT

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