Labor backs coal despite climate fears

Summaries - Australian Financial Review
Thursday 22/10/2009 Page: 1

Federal Resources Minister Martin Ferguson has defended the domestic and export coal industries, saying Australia needs to take advantage of its rich resource industry to feed the world's growing appetite for energy. Dismissing recent attacks on initiatives to boost coal exports, Mr Ferguson warned that coal was 'a fundamental source of energy' and would remain so for some time. 'There is no way we are walking away from the export of coal, contrary to what some non-government organisations might demand,' he said.

Mr Ferguson spoke to the Australian Financial Review as part of its Future of Energy series, and defended the viability of carbon capture and storage (CCS), the centrepiece of the Rudd government's $2.8 billion investment in clean coal. The International Energy Agency (IEA) believes that growth in global coal demand will be between 60% and minus 22% by 2030, depending on how strong international agreements are in reducing greenhouse gas emissions. Santos chief executive David Knox expects Australia's production of liquefied natural gas (LNG) may double within a decade, and that Australia is a significant supplier of 'carbon light' energy to Asia.

Mr Ferguson wants the east coast's emerging coal seam gas industry to fast-track moves to rationalise the sprawling sector to assist in reaching Australia's energy goals, and expects many more billions of dollars to be invested in the LNG industry in Western Australia and the Northern Territory. Mr Ferguson says he has discussed issues with major companies in the sector and pointed to the $43 billion Gorgon project in WA.

According to the Australian Petroleum Production & Exploration Association (APPEA), there are eight rival LNG projects proposed in Queensland. In a move the Queensland government says may create up to 18,000 jobs, Australian companies including Origin Energy, Santos and Arrow, are looking at moves to export LNG in partnership with ConocoPhillips, Petronas and Royal Dutch Shell. While there are currently only two operating LNG plants, the Woodside Petroleum-operated North West Shelf in WA and ConocoPhillips' Darwin LNG, there are around one dozen proposed around the country.

According to Origin Energy chief executive Grant King, the potential to grow Australia's exports is huge. Woodside Petroleum chief executive Don Voelte says Australia's export prospects are very bright. The IEA believes that world energy demand will grow by 45% between 2006 and 2030. The managing director of coal company Felix Resources Brian Flannery says coal will still be required for existing electricity production and that renewables and gas will 'fill the gap and be expensive'.