Oil and gas sector to weigh in on emissions bill debate

A pipeline of new fossil fuel projects risks blowing the carbon budget and imposing a heavier burden on other heavy industries to cut overall emissions, critics warn.

But day two of a federal inquiry on Tuesday will feature a defence of expansion by Australia’s oil and gas industry, along with testimony from farmers, the mining industry and big business.

Many big producers have already committed to net zero emissions by 2050, and are determined to achieve it at the lowest cost to jobs and profits.

Australian Petroleum Production and Exploration Association CEO Samantha McCulloch said Labor must keep its pledge to protect trade-exposed sectors, including liquefied natural gas exports.

“The value of our LNG exports is shown in the $9 billion of extra government revenues forecast this financial year,” she said.

“That’s around $14 billion this year alone helping fund state and federal public services and infrastructure like roads, schools and hospitals.”

Ms McCulloch said the industry has already announced billions of dollars of investment in decarbonisation.

“It is imperative that Australia retains its competitive global position and that gas can continue to power Australia’s and our region’s economy in a cleaner energy future,” she said.

The Australian Conservation Foundation said the pipeline of new fossil fuel projects risked blowing out the emissions cap this decade, which would impose a higher cost on all other plants.

Under the scheme, overall emissions must reduce by 4.9 per cent per year through to 2030 by using cleaner production methods and carbon credits to offset pollution.

New safeguard credits would be issued to companies that achieve deeper cuts than required.

Critics told the inquiry on Monday that relying on unlimited carbon credits, some of them “junk”, risks making climate change worse.

But APPEA said access to sufficient, credible and affordable offsets, including international ones, is essential.

The federal government has also warned against a one-size-fits-all approach.

The safeguard mechanism set up under the coalition government covers 215 industrial facilities with more than 100,000 tonnes of annual greenhouse gas emissions, including carbon and methane-rich coal and gas production.

A lithium or copper mine needs to be treated differently to coal and gas or genuinely hard-to-abate industries such as steelmaking, said Barry Traill, director of the Solutions for Climate Australia network.

Labor intends to pass the bill by late March for implementation on July 1, but is yet to garner enough support in parliament.

The Greens have pledged to block it without a ban on new coal and gas, which Labor rejects.

Federal officials and the Clean Energy Regulator will also give evidence on Tuesday.