Friday 26 September 2008

Top 300 still lagging in green disclosure: survey

Thursday 11/9/2008 Page: 4

HALF of Australia's biggest companies are failing to provide public information about their environmental or greenhouse policies, according to research on company disclosure. The lack of disclosure is denying shareholders information that will become vital when an emissions trading scheme is introduced, and is also limiting the commercial opportunities available to companies among today's environmentally aware public. A survey of the largest 300 companies listed on the ASX found that only 28% provided any information on "policies or practices that have been undertaken to reduce greenhouse gases".

Conducted by consultancy Grant Thornton, the survey examined the 2007-08 annual reports and websites of companies in the S&P/ASX 300. It found that only 52% publicly disclosed their environmental practices, and only 36% provided information on their human resource policies, including information on maternity and carer's leave.

The director of business risk services at Grant Thornton, Peter Moloney, said the results surprised him and he thought companies had failed to understand the commercial value of good environmental policies. If you are bidding for work with major corporations, both in Australia and overseas. whether you as a supplier can demonstrate that you have sound environmental credentials is pretty important," he said.

"Not communicating that information can put you at a disadvantage commercially." Although the number of businesses reporting their greenhouse policies doubles in the top 100 companies to 48%, this still means 52% of Australia's biggest companies are failing to provide any information from "a greenhouse perspective". Disclosure improves slightly for environmental work (70%) and community work (70%).

Mr Moloney said companies needed to be demonstrating what they were doing from a corporate social responsibility perspective because "it is high on the agenda in the public mind". While emissions disclosure will become mandatory by August next year under new reporting regulations, companies should already be demonstrating an awareness, according to the chairman of the Australian Shareholders Association, Ian Curry. "We would certainly expect to see companies giving some indication about how they see themselves in terms of being an emitter or clean operation," Mr Curry said. "We would see that as a step that they should have been looking at and have some idea about where they stand."

Tarong to host pilot for carbon capture

Courier Mail
Thursday 11/9/2008 Page: 64

Tarong Energy will work with CSIRO on a pilot project to capture greenhouse gases at the state's biggest power station. Mines and Energy Minister Geoff Wilson said the $5 million carbon-capture pilot was a first for Queensland with the potential to capture 1500 tonnes of CO2 emissions a year. "While we push ahead with renewable energy solutions and gas-tired power, coal will continue to play an important role in providing our power," Mr Wilson said, announcing plans for a post-combustion plant at Tarong, 45km south of Kingaroy.

"The pilot project is expected to demonstrate how to capture carbon dioxide at a large plant," he said. "It's part of a broader research program to find ways to reduce dangerous greenhouse- gas emissions from the energy sector." The two-year project will start immediately. The pilot plant is expected to begin working early next year and research associated with the technology completed in 2011.

Director of CSIRO's Energy Transformed National Research Flagship, Dr John Wright, said low-emission energy generation was a key research area for the Flagship. "About 80 per cent of the energy consumed in Australia is generated from large, coal-tired power stations," he said. Queensland Resources Council chief executive Michael Roche said the project confirmed the state's reputation for low-emission power technology development. Alongside the Callide oxyfuel and ZeroGen projects in central Queensland, the Tarong project would add to Australia's pool of knowledge and experience in the field. Mr Roche said.

Green wash emissions on the nose

Herald Sun
Thursday 11/9/2008 Page: 74

Aluminium titan Alcoa may pump more carbon into the state's lungs than most companies, but it would have Victorians believe they can start breathing easy again after yesterday's announcement that it has been recognised as a sustainability leader in its home country, the United States. The opening of its first new smelter in 20 years, in Iceland and powered by hydro-electricity, has cemented Alcoa's position in the Dow Jones Sustainability Index, it seems.

The index tracks the financial prowess of "leading sustainability-driven" companies, and this year is the seventh in a row that the highly energy-intensive Alcoa has been included. The news might be a relief to those who were considering investing in portable oxygen tanks after the Worldwide Fund for Nature (WWF) last week named and shamed Alcoa as one of 11 power generation owners doing "zero to reduce their emissions". After all, with Alcoa hogging nearly a quarter of the electricity produced in Victoria for its own purposes, its carbon footprint had many worried.

But a cocky Alcoa hit back at WWF, saying its claims were absurd and inaccurate. No doubt it was emboldened at the support emerging from the latest Garnaut report for a "do nothing" approach to cutting Australia's emissions if a global climate change deal fails next year. The company countered WWF's criticism by saying alumina produced by Alcoa in Australia used just over half the energy and produced less than half the greenhouse emissions compared to alumina produced in China.

With coal-guzzling, smoggy China used as a benchmark, why didn't Alcoa think to advise WWF to use more energy to protect its icon pandas rather than wasting it on bagging a pint-sized power station? Perhaps it thought environmentalists don't do irony. WWF took issue with Alcoa's Anglesea Power Station, used to supplement electricity at its Point Henry smelter, but the aluminium "dinosaur" retorted that the plant had the lowest greenhouse gas emissions per megawatt hour for brown coal generators in Victoria.

And this other lofty benchmark, brown coal-fired electricity, takes your breath away - probably literally if you are downwind of a plant generating it. Alcoa's sustainable development chief Tim McAuliffe was too busy to answer BNW's questions yesterday because he was finishing the company's submission to Senator Penny Wong's climate change green paper.

Given the challenges Alcoa faced in meeting yesterday's deadline for submissions, BNW will offer its questions on notice:
  1. How much will it cost Alcoa to shut down its Australian operation and move offshore, as it has suggested it will do if it doesn't like Senator Wong's final emissions trading policy?
  2. Is moving its operation offshore more cost effective than selling it to an organisation better able to navigate an Australian emissions trading scheme?
  3. Which emissions trading-exempt regions has Alcoa identified as better for business than Australia that have no foreign ownership limits and low sovereign risk?
  4. Why does Alcoa prefer using renewable energy in regions where emissions trading exists, but seek to avoid it in Australia?
  5. Does Alcoa really expect to be taken seriously about its claim that it is helping develop wind energy at its Portland smelter, when in fact it has merely made a switchyard available to another company for turbines that will not be used to power its operations?
  6. What does it say to analysts who accuse it of rent-seeking and double standards?

Garnaut responds to vocal scientist critics

Thursday 11/9/2008 Page: 2

Ross Garnaut has written to senior Australian scientists and environmental leaders rejecting their claims that his latest report on climate change is weak. The heads of WWF, the Australian Conservation Foundation and the Climate Institute Australia, as well as key UN scientific advisers, confirmed Professor Garnaut - the Rudd Government's adviser on climate change - had written to them on Tuesday, arguing that his advice that the world is not ready to sign a climate agreement that will avoid the risk of catastrophic climate change is accurate and realistic.

Professor David Karoly, who worked on the UN's Intergovernmental Panel on Climate Change and savaged the Garnaut report in The Age on Tuesday, received a letter. After reading Professor Garnaut's letter, Professor Karoly was still not convinced by his arguments. "I don't think we misinterpreted him," he said. "He's giving in." Professor Karoly said on Tuesday that the 10% cut in emissions by 2020 recommended by Professor Garnaut was insufficient.

Professor Garnaut's report argued that Australia should support a new global climate agreement in 2009 that aimed to stabilise greenhouse gas concentrations in the atmosphere at the dangerous level of 550 parts per million. He acknowledged that most scientists believed these concentrations would lead to a possible rise in global temperatures of more than 3 degrees and risked catastrophic climate change.

In his letter Professor Garnaut writes: "I note your views that I have been too pessimistic and that an effective agreement around 450 parts per million is possible at Copenhagen at the end of 2009. I hope it is obvious from the various publications of the review that I would be delighted if there were a sound basis for this alternative judgement, but there is not."

The head of WWF, Greg Bourne, said yesterday he also was not convinced by Professor Garnaut's arguments, which would mean Australia accepting a "weak" target to cut its own greenhouse gas emissions only 10% by 2020 on 2000 levels, while European countries have agreed to cut 20% by 2020. John Connor, of the Climate Institute Australia, and Don Henry, of the Australian Conservation Foundation also remain critical.

Thursday 25 September 2008

`Cinderella' gas a new gold rush

Courier Mail
Tuesday 9/9/2008 Page: 18

BOB Bryan and Stephen Bizzell are a generation apart but they have both made millions from a new energy source transforming Queensland into a national leader coal seam gas. Bryan, aged 74 and Bizzell, 40, have watched the share price of their respective companies, Queensland Gas and Arrow Energy, skyrocket as investors and major international resource companies realised the potential of CSG to power the developing world as oil reserves dwindle.

News yesterday that Origin Energy had done a $9.6 billion deal with US energy giant ConocoPhillips in the coal seam sector only reinforces their beliefs. It also propels Queensland to the forefront in the new energy source, making the state potentially more significant than the North-West Shelf in terms of gas production and the CSG boom as transformational as the Bowen Basin coal rush.

Long known as the poor cousin to coal and conventional oil and gas, CSG is just as it sounds: natural gas extracted from coal seams, rather than from conventional rock formations. Naturally odourless, it is the same gas that is a hazard for coal miners and which once doomed canaries to act as an unwary warning system underground.

It is formed as a by-product during the creation of coal and when the seam is perforated it allows the gas to flow to the surface, where it is gathered and processed. The gas is later cooled and converted into liquid via a liquid natural gas plant, which usually costs about $2 billion per "train", a line of the plant which gives an indication of its total size (ie a three-train or four-train plant). It is used just like any other form of conventional gas to power water heaters, stoves and space heaters in both domestic and business settings and as a direct source of power for industry and a fuel for electricity generation.

The massive Origin Energy deal with ConocoPhillips, a company with a market capitalisation of $US125 billion, had an immediate impact on the sector yesterday with the share prices of all Queensland CSG explorers rising strongly by between 8 and 30 per cent. It also put a major floor under an industry not long ago battling for credibility and acceptance as a legitimate and viable alternative energy source.

Bryan, who is conservatively worth about $360 million although some suggest his wealth is at least double that, got into CSG via a float of his Queensland Gas group in 2000. After a long career in the resources sector, it was going to be his swan song. He first became aware of CSG in 1968 when he was drilling for other resources because "we had to drill through the stuff to get other things out".

"We scratched around in 2000 and just managed to raise enough money to get going $12 million which was enough to get us over the line," he reflected yesterday. Today the company has a market capitalisation of over $3 billion.

Bizzell entered the market around the same time, his Arrow Energy group having its fair share of sceptics but the company growing well and making him a multi-millionaire many times over as a result. His total wealth is estimated at anywhere between $30 million and $50 million depending on his other investments. Bizzell, an accountant originally who co-founded Arrow with old school mate Nick Mather, has always maintained the CSG sector is "an exciting part of the market which has great potential".

As he watched the Arrow share price rise he attributed the surge to renewed international interest. "We certainly stick out for any player looking at possibly getting a seat at the (CSG) table," he said. The beginning of this decade was a bad time for Bizzell and Bryan to raise cash for coal seam gas because, ironically, Conoco, Origin Energy's partner in the latest deal, had spent more than $100 million looking for CSG in Queensland. It lost all its money and another US group, Amoco, did exactly the same thing.

"Here we were coming along claiming to be able to extract this gas profitably and two of the world's largest oil companies had failed dismally in the exercise so it was very tough indeed and the world was full of sceptics," Bryan said. He described the latest Origin Energy- ConocoPhillips deal as a wonderful endorsement of the sector and tremendously important for Queensland.

The CSG industry has also been boosted by three other major recent deals: British Gas in June made a $13 billion takeover bid for Origin Energy. Given yesterday's news it will now likely not proceed but BG has also entered into an $8 billion agreement to build a liquefied natural gas (LNG) plant at Gladstone with Queensland Gas.

The Malaysian Petronas group has signed a $7 billion deal with Santos to build an LNG plant at Gladstone. The giant Shell group has signed a deal with Arrow Energy which also envisages building a third, smaller, LNG plant at Gladstone. "In reality we are going to have in all probability as much LNG production and export out of Gladstone as they have managed to have on the North- West Shelf in the past 20 years," Bryan said.

The North West Shelf has five trains of capacity, each producing 3.5 million tonnes of LNG but with the proposed four new LNG plants for Gladstone, Queensland will have developments of greater size. Arrow managing director Nick Davies has said that over the medium to long term there was so much CSG in Queensland it could satisfy the state's gas production for the next 300 or 400 years.

Fellow explorer and Sunshine Gas managing director Tony Gilby shares his enthusiasm, pointing out that increased pipeline infrastructure over the past 10 years along with increased demand for gas in general and better technology had put a rocket under the sector.

The news has not been lost on Gladstone. The Gladstone Economic and Industry Development Board (GEIDB) and local council are bracing for the expected flurry of economic activity. "In reality we are not going to see four LNG plants in Gladstone but it is likely we will see one or two plants," one analyst said yesterday.

Local Mayor George Creed yesterday said the council was very "supportive and receptive" in relation to the huge development planned for the region, which must also comply with relevant environmental and social guidelines. The Bligh Government has also established a special State Development Area in the city with an estimated $17 billion worth of potential LNG projects on the table for Gladstone and likely long-term benefits to the Queensland economy estimated at $9 billion.

Coal seam gas has been extracted in the US for more than 25 years with production levels now around 1.9 trillion cubic feet a year and on the rise. That is equivalent to more than two years of production at the North West Shelf LNG joint venture now that its fifth production train has come on line ahead of schedule. As early as the 1970s it was clear Australia had the potential to host a large amount of CSG.

But it was early disappointments like ConocoPhillips, Amoco and Enron, which lost about $200 million drilling for CSG in Queensland, that made it a slow rise for the sector. The big boom did not come until 2000 when Bob Bryan and Stephen Bizzell were setting out and, ironically, as a result of the collapse of the $4 billion PNG gas pipeline.

In 2000, to the astonishment of the state's power coal industry, the then Beattie government released an energy policy that mandated 13 per cent of the state's electricity be sourced from gas by 2005. Analysts and observers at the time suggested that policy was a subsidy for the PNG pipeline, which was finally cancelled last year after years of delays and cost blow-outs.

As the PNG project was continually delayed, CSG explorers kept working to prove up reserves in the Bowen and Surat Basins, signing agreements to supply gas-fired power stations. Some analysts, such as UBS's Gordon Ramsay, are now predicting eastern Australian gas demand could more than double in the next decade. But it is not all good news for consumers. While the rise of CSG has proved a boom, prices to the consumer are likely to rise as a result.

Origin Energy managing director Grant King has long said the sector was operating in what he described as a "new world", predicting much higher gas prices than the industry had ever thought of before. Also boosting the industry and Queensland junior CSG explorers has been a gradual recognition that existing sources of gas supply, such as Bass Strait, have plateaued.

Santos also recently warned that its Cooper Basin production was declining about 8 to 10 per cent a year, making coal seam gas production considerably more attractive. The sector has grown dramatically in just two years and the growth will flow through to Queensland industry, jobs and economic prosperity. As Bob Bryan says: This industry has come a long way from small beginnings and has a long way to go yet."

Energy nirvana' will cost $70 a tonne

Tuesday 9/9/2008 Page: 2

AUSTRALIA will have to reach a carbon price of about $70 a tonne by 2020 if "clean coal" is to be a viable option, says an international energy expert. Mark Lewis, Deutsche Bank's director of global carbon research, said Australia should strive for a minimum price of $25 a tonne when its emissions trading scheme started in 2010 to give it global credibility and put it above international standards.

On Friday, Professor Ross Garnaut recommended a 10% cut in emissions on 2000 levels by 2020, resulting in a carbon price of about $34.50. Mr Lewis said Australia's large coal deposits meant it should be investing heavily in carbon capture and storage technology (CCS).

"Australia is sitting on a black goldmine which is abundant and cheap but carbon intensive," he said. "carbon capture and storage is really energy nirvana for Australia; $65-$70 a tonne is the price where CCS becomes viable, assuming that the technology has improved by 2020 to the point where efficiency rates are much better.

And if you don't get those efficiency rates, then it will be much higher." Mr Lewis said Australia's carbon price needed to be above the price of primary Kyoto credits, now valued at about 13 ($A22).

"I would have said anywhere above $25 would be meaningful initially, but by 2020 you would want to be up at a price that is above the international credit price even on a secondary basis," he said. "The long-term cost of carbon will be set by the price required to make gas-fired power station the new entrant over coal." Mr Lewis said Mandarin speaking Prime Minister Kevin Rudd had a distinct advantage in encouraging China to sign up to a global climate change agreement.

"He personally - not just as Australian Prime Minister, but with the set of skills he has - there is great potential for him to smooth the wheels between the developed economies and the larger developing economies, in terms of getting a global agreement in Copenhagen next December," he said.


Europe votes for binding renewable energy targets
Paris, 11 September

European parliamentarians today voted overwhelmingly in favour of introducing binding national renewable energy targets to enable the EU to reach its target of producing 20% of its energy from renewable sources by 2020. The Parliament's influential committee on industry, research and energy backed the compromise report by Green member of Parliament (MEP) Claude Turmes, which included binding interim renewable targets and provisions to ease the access of renewable sources to electricity and gas networks.

The committee also agreed that targets to increase the use of biofuels in transport fuel should be slashed. MEPs also voted to allow member states to cooperate to achieve their national targets by, for example, operating joint projects. "Member states which find it difficult to reach their national targets will be able to count investments in renewable production in other member states to help them achieve their target," said Turmes. They likewise backed the proposal to safeguard successful national support policies for renewable energy, such as Germany's feed-in tariff incentive.

Oliver Schäfer, policy director of the European Renewable Energy Council (EREC) said: "The efforts made by all political groups to find compromises on the most important issues have lead to significantly positive results on most issues." He particularly welcomed the broad agreement reached on a flexibility mechanism to enable member states to reach their renewable energy targets in the most cost effective way.

"This is crucial to ensure investors' security," said Schäfer. "Governments – with this proposal – will also be able to maintain control over their targets and policies to achieve them." Greenpeace likewise welcomed today's vote. "We are moving closer to the energy revolution in the fight against climate change," said Frauke Thies, Greenpeace EU renewable energy campaigner.

"It's now up to member states to seal the deal." MEPs backed the European Commission's proposal that 10% of transport fuel in the EU should come from renewable sources by 2015, but said that at least 40% of this target should be met with electricity and hydrogen from renewable sources or second generation biofuels – hence no more than 6% of transport fuel would come from grain-based biofuels.

The Parliament will now hold negotiations with national ministers and hopes to achieve a first reading agreement in Parliament by mid-December this year.

Latrobe power future in doubt

Herald Sun
Monday 8/9/2008 Page: 23

ENERGY minister Peter Batchelor has refused to deny speculation the Latrobe Valley's Yallourn and Hazelwood power stations may close in the next 18 months. Asked by BusinessDaily if the rumors circulating among employees at Yallourn and Hazelwood were true, Mr Batchelor responded: "That is a question you have to direct to the power stations". "We want them to keep operating but we don't know," he said in an exclusive interview.

In July, the Energy Supply Association of Australia released a report warning three of the four Latrobe Valley's power stations could close by 2020 because of the heavy cost of running brown-coal fired plants under a carbon emissions trading scheme. But there are fears Yallourn and Hazelwood could shut their doors before the end of calendar 2009, because the ageing power stations are already relatively expensive to run and could find the added cost of a carbon tax too much to bear.

Together, the two operations produce about half of the state's electricity supply, yet parts of them are more than 40 years old. Last month, a BusinessDaily investigation uncovered maintenance problems at both power plants that industry insiders have linked to uncertainty over their future under a carbon emissions trading scheme. Commenting on recent maintenance cutbacks at Yallourn, Mr Batchelor said it was up to the plant's owner to decide their own budget.

Latrobe Valley's is owned by TRUEnergy, a subsidiary of Hong Kong-based energy group CLP Power. "We're not making that decision - that is a decision the owners will make," Mr Batchelor said. "At the moment, our biggest concern is the emissions trading scheme." He added he was not concerned about the security of Victoria's electricity supply, because power stations were required to report all maintenance issues to NEMMCO, the body responsible for the nation's wholesale electricity market.

On Friday, Professor Ross Garnaut recommended Australia target a 10 per cent reduction in carbon emissions by 2020. The lower-than-anticipated figure has been welcomed by the business community but slammed by environmentalists. The Latrobe Valley's brown-coal fired power plants would likely receive more transitional assistance under the new regime than the cleaner-burning black-coal fired power plants in Queensland and NSW, Mr Batchelor said.

The Victorian government is currently conducting trials of geosequestration, also known as carbon capture and storage, in the Otway Basin. Geosequestration is the injection and storage of carbon dioxide into underground geological formations.

Climate guru says we need to show the way

Courier Mail
Saturday 6/9/2008 Page: 4

CLIMATE change guru Ross Garnaut has rejected the Rudd Government's compensation plan for a radical credit system. But Professor Garnaut's supplementary draft report yesterday said Australia could afford to wear the costs of climate change and should flex its muscle to encourage an international agreement with China and Indonesia. He said the formula of an emissions trading scheme did not have to be "absolutely" right and spurned the Opposition's claim that acting too soon would be economically disastrous, saying Australia should forge ahead even without global agreement.

His report said Australia's target should be to slash emissions 10 per cent from 2000 levels by 2020 and 80 per cent by 2050. The Government has committed to only a 60 per cent reduction by 2050. But Professor Garnaut said that without an international agreement Australia should commit to 5 per cent of 2000 levels by 2020.

Described as a second-best option, the report recommended Australia should aim for an international agreement that stabilised the concentration of greenhouse gases in the atmosphere at 550 parts per million of carbon dioxide (they are currently at 455 ppm). Eventually 450 ppm should be sought.

But even at 550 ppm, Australia's landscape would forever change for the worse. The Great Barrier Reef would be consigned to the history books and half of north Queensland's rainforest would die. "The overall cost to the Australian economy from tackling climate change is very small and in the order of one-tenth of one per cent of annual economic growth," the report said.

"Australia can readily afford to make unconditional and conditional policy commitments of respectively reducing emissions. "We might not have to get it absolutely right. But if we get it wrong we will have heavily, maybe permanently, compromised our ability ever to find our way back on to a sound path." Professor Garnaut recommended the price of carbon be fixed at $20 a tonne from 2010, increasing each year by 4 per cent plus CPI.

The 49-page report detailed how household budgets and business revenue would be affected by cutting emissions. Federal Government modelling predicted that under the ETS, electricity bills would rise by 16 per cent, gas and other household fuels by 9 per cent and the consumer price index (a measure of inflation) by 0.9 per cent in 18 months' time. The largest impact would be on about 1000 major business polluters. Those who emitted 25,000 tonnes of carbon dioxide equivalent would have to access permits to pump greenhouse gases into the atmosphere.

At $20 a tonne, those which emitted 25,000 tonnes of carbon dioxide would have to pay $500,000 a year to pollute. But he disregarded the Government's plan to compensate business based on how much they polluted. After business complained the Government's compensation model was unfair, Professor Garnaut yesterday revealed a new system which would credit companies by how much the price of their products increased. They would receive credits only if there was no international emissions scheme.

Electricity system among the worst polluters in the world

Sydney Morning Herald
Friday 5/9/2008 Page: 7

DESPITE having one of the world's most advanced economies, Australia has an electricity system that is one of the worst greenhouse gas polluters. The performance of only a handful of countries, including Cuba, Botswana, Kazakhstan, Libya, Malta and Bahrain, rates more dismally. The extraordinary finding was made by Ross Garnaut, the Government's independent adviser on climate change, in his last report. Today he will deliver his long-awaited advice on how much Australia should aim to cut greenhouse gas emissions by 2020.

Professor Garnaut's latest report is expected to supercharge the lobbying by the nation's top mining, energy and industry groups, who argue that any plans by the Government to make deep cuts to emissions by 2020 will damage the economy and create the potential for power shortages The Climate Change Minister, Penny Wong, has distanced the Government from Professor Garnaut, but yesterday she would not be drawn on its preferred 2020 target until she had further advice from Treasury. "We are going to have to wait and see what Professor Garnaut comes out with and we will put our Treasury modelling out in October," she told the Herald .

But Senator Wong is warning business that Australia must set a credible target to cut greenhouse gas emissions, as the Government prepares to respond to the first formal advice from Professor Garnaut on how deep those cuts should be. Senator Wong said Australia would lose its influence in the vital United Nations negotiations on climate change if it did not set a credible target on emissions. "If we are going to get the global action we need, we will have to act at home. We cannot expect to influence the shape of a new international agreement if we cannot demonstrate that we are also taking responsibility here," she said.

But Australia's most powerful business leaders and lobbyists remain critical of the Government's plans to cut greenhouse gases. The plans were unveiled six weeks ago in the green paper on the Carbon Pollution Reduction Scheme. The head of the Australian Industry Greenhouse Network, Mike Hitchens, said it was irrelevant that Australia's electricity system ranked with the most backWard countries for its greenhouse gas emissions. "That's just a fact of history - we have a lot of coal," he said.

Australia has to negotiate its share of the international burden with an eye to what our economy looks like - one that does thrive on the development of its resources. The only reason Australia is not in recession today is because of its resources." The network represents some of the heaviest polluting companies, from the aluminium producer Alcoa to Cement Australia. The Minerals Council of Australia and the Business Council of Australia have also warned the Government it must water down its scheme, which will require big greenhouse emitters to obtain permits to pollute.

The Government promised free permits for heavy polluters, such as the aluminium producers Alcoa and Rio Tinto, who face competition from overseas. A recent report by the Business Council said several businesses would be shut if the scheme went ahead and others would have to review operations. The report had widespread media coverage even though the examples given were anonymous and a Citibank analysis found the scheme would have only a marginal impact on most companies. None of the business lobby groups will be drawn on what targets they would accept on emissions by 2020.

Wednesday 24 September 2008

Solar design a credit to home

Sunday Tasmanian
Sunday 7/9/2008 Page: 12

NESTLED in the Hobart CBD behind a historic 1850s stable is one of Tasmania's most sustainable homes. It is the work of architect and owner Robert McGregor who specialises in solar design. The Macquarie St house features solar energy for hot water, electricity and heating and has a water tank. An environmentally friendly fridge, a front-loading washing machine, a combination of a microwave and convection oven and energy-saving lamps all help to lower energy use.

Mr McGregor recently received a bill from Aurora informing him he was in credit. "That's the greatest feeling." he said. "I really put my money where my mouth is in doing this and seeing the 'no payment is necessary' note on the bill is a great feeling." The hone and office will feature in Saturday's Sustainable Homes Open Day. Visitors are invited into houses across the state for a taste of the best in environmental practices.

Mr McGregor said sustainable housing was finally being taken seriously. "These ideas have been lying around for 30 years but no one bothered with then." he said. He says it took changes to building regulations regarding insulation for sustainable designs to become mainstream. His own home has been a labour of love - albeit an expensive one. "I won't be going on holiday or buying a car for a long time but it's worth it," he said.

"I'm very proud of it, the solar features in particular." Mr McGregor bought the 1850s stable 10 years ago to use as an office. He then decided to create a sustainable home. The first step was trapping the sun. All the main windows in the house collect the heat. "It's a very restricted site, only 10m wide, and we have three neighbours on three sides so it was a challenge," he said. Mr McGregor's interest in solar energy started in the 1970s when he moved from Sydney to Tasmania. "I was fortunate enough to design a solar-heated house for the Housing Department that was open to the public," he said. "I was so impressed I got deeply interested in energy saving."

Geodynamics to get Tata cash boost

Herald Sun
Friday 5/9/2008 Page: 81

INDIA'S largest private company Tata Group will pump at least $44.1 million into geothermal energy company GeoDynamics. Brisbane-based GeoDynamics yesterday announced a deal to issue 29.4 million shares, equivalent to 11.4 per cent of the company, to Tata Power for $1.50 per share. This compares to yesterday's closing price of $1.40, up 4c.

Tata will also be eligible for 14.7 million options, exercisable at $2.25 per share by the end of February next year, subject to shareholder approval. GeoDynamics said Tata Power was India's largest private utility, with generation capacity of more than 2300 megawatts (MW) and a presence in thermal, hydro, solar and wind energy, as well as transmission and distribution.

It is also developing the $US4.2 billion 4000MW ultra mega power project" in the state of Gujarat. Tata Power is a subsidiary of the Tata Group, which had revenues or $US62.5 billion in 2007-08 and turned a $US5.4 billion profit. GeoDynamics managing director Gerry Grove-White was chief operating officer for Tata Power before taking on his current role.

He said yesterday the relationship with Tata would place the company in a strong financial position to make an investment decision, along with joint venture partner Origin Energy, to build a 50MW power station next year. The companies would also be looking to share technical knowledge and look at opportunities outside of Australia. Within the group they have many areas which could support our activities," Mr Grove-White said.

"They have a very large engineering consultancy business and they also have significant power engineering expertise themselves." GeoDynamics is currently drilling its third deep geothermal energy well near Innamincka in the Cooper Basin in far north South Australia. The company has conducted flow tests between its first two wells, in a step in proving the concept of engineered geothermal energy production.

Australia can lead way on climate

Canberra Times
Friday 5/9/2008 Page: 23

Professor Garnaut's original review released in early July was clear that Australia's interests lay in the most ambitious targets for reducing global pollution levels.

When the Garnaut Review recommends targets to davit is important to bear in mind the political realities of the global negotiations which are walking on eggshells toward the deadline for an agreement at the end of next year. At the 2007 Bali climate talks, Australia shrugged off a reputation as a climate laggard and agreed to include the scientific guidance that said developed countries, as a group, needed to reduce carbon pollution by 25 per cent to 40 per cent of 1990 levels by 2020.

In the real world of the climate negotiations our credibility will rest on how hitch we can help to achieve this range. Less ambitious targets will largely deal us out of the chance to be a positive player. Embedded in the negotiations are principles of historical responsibility for current pollution levels and the capacity to act.

These are all principles relevant when countries negotiate their "differentiated responsibilities". Engaging developing countries in agreeing to take on the commitments, the world also needs a global riff on the concept of mutual responsibility defined by these principles.

The most recent talks in Ghana last week ended on a surprisingly positive note, with signs from some developed and developing countries of movement on key issues, including the challenging issue of dealing with genuinely trade exposed industries facing carbon prices. But the talks face their biggest test when countries gather in Poznan, Poland, at the end of the year and developed countries start to put their "target cards" on the table.

Much rests on the targets Australia sets for carbon pollution reduction. Will they be strong enough to help our economy tap into emerging trillion-dollar markets for clean technology? Will they be strong enough to ensure Australia is a credible player in effective global action? Will they help build the trust needed for all countries to take on their fair share of responsibilities in a comprehensive global agreement? Strong action is needed to avoid intensifying droughts, declining water supplies, more extreme bushfires and other climate impacts.

The scope for energy-efficiency improvement and access to low emission energy sources are among the many factors that will influence a nation's ability to reduce emissions. Thankfully, Australia is blessed with massive energy efficiency potential and low-emission-technology sources. Australia can cut at least a quarter off its 1990 pollution levels by 2020, more if a comprehensive global agreement can be agreed at the end of next year.

Climate Institute Australia modelling has shown that, with smart investments, half the emissions reduction can be achieved at a net saving to the economy. The bulk of this lies in untapped opportunities to improve energy efficiency in the residential, commercial and industrial sectors. This includes solar hot water on our roofs, better insulation in our homes and world's-best-practice appliances.

Significant reductions in our energy sector can be achieved with investments over the next decade of around half of 1 per cent of this year's GDP - $46.6 billion. This would unlock billions of dollars of savings through improved efficiency and ensure we are developing the clean technologies hungrily sought by global markets. Stuart investments also need smart policies. A credible carbon pollution-reduction target for 2020, energy-efficiency policies, renewable energy targets and an emissions trading scheme are pieces of the jigsaw.

Some of our biggest polluters want a watered-down emissions trading scheme, others advocate scrapping it in favour of a carbon tax. A simple carbon tax, however, offers no guarantee that pollution would be reduced. It relies on politicians taking a punt on a price that would be sufficient to alter behaviour. Under a cap-and-trade system the cap, or pollution target, is set and the market decides the price of carbon. At the end of the day the target is the key and it is best to have that clear for all to see.

There is no doubt that some businesses will need assistance as we shift our economy to a cleaner, low-carbon footing, but it is in all our interests that this is done, conditional on cleaning tip their operations and being competitive in a world with carbon prices.

With a target of at least a 25 per cent cut in carbon pollution, Australia can be a positive player in negotiations to help achieve global targets and the clean economy so clearly in our national interest. Anything less would return Australia to the climate laggard role we have just shrugged off and leave our kids with a legacy of dangerous climate change.

John Connor is CEO of the Climate Institute Australia.

Indian wind turbine maker buys German firm

Friday 5/9/2008 Page: 22

Suzlon Energy, the world's fifth-largest wind turbine manufacturer by sales, is moving ahead of schedule to consolidate its takeover of Germany's REpower Systems, a move that will speed the transfer of technology between the two companies. Suzlon, based in Pune, India, has faced concerns about its technology after blades on 2.1-megawatt turbines sold in the US to Deere and Co, and Edison Mission Energy, began splitting last year. Customers in India also have complained their turbines did not generate as much power as expected.

In a bid to improve its technology, Suzlon agreed last year to take over Hamburg-based REpower in a deal that valued the German company at $US1.7 billion. Analysts applauded the tie up, which will give Suzlon access to REpower's cutting-edge technology, including blueprints for large offshore wind turbines.

Suzlon has been unable to draw on REpower's technology because of a strict German corporate law aimed at protecting minority shareholders. The law requires that foreign investors taking over German companies reach a so-called domination agreement before they can transfer technology or profits out of a target company. Such an agreement involves getting 75 per cent of shareholders on board and offering by tender to buy out minority shareholders.

Suzlon said this week it planned to push for a domination agreement to be concluded in "due course" according to German law. It is setting up the agreement to be in place faster than originally planned. Under last year's deal, Suzlon was to increase its initial 34 per cent stake in REpower in stages until May next year.

The company also said this week that it has reached a deal to pay Portugal's Martifer SGPS 270 million for Martifer's 22 per cent stake in REpower, five months ahead of schedule. That purchase will take Suzlon's overall holding in REpower to about 90 per cent. Analysts said Suzlon's move was a positive one aimed at assuaging concerns over its technology.

A spokesman for Suzlon, Vivek Kher, said the REpower takeover was driven by a desire to penetrate the European market and get access to large offshore wind turbines, not for other technology. "Transferring technology or manufacturing REpower products in India were never the objectives of the takeover," Mr Kher said. "The domination agreement however, will ease all round co-operation between the two companies for the mutual benefit of all stakeholders in both companies."

Tata says hello to Aussie hot rocks

Friday 5/9/2008 Page: 3

INDIAN industrial conglomerate Tata is to gain a foothold in the Australian renewable energy market by taking an 11% stake in GeoDynamics. GeoDynamics wants to produce electricity from steam heated by hot rocks deep underground in South Australia. Tata offshoot Tata Power expects to gain a board seat, and GeoDynamics and Tata Power have agreed to review the potential of geothermal prospects outside Australia.

Tata Power will take an 11.4% stake in GeoDynamics for $44.1 million through a placement of 29.4 million fully paid ordinary shares at $1.50 a share. GeoDynamics managing director Gerry Grove-White said the funds raised from Tata Power's placement would strengthen GeoDynamics' balance sheet. "There are great synergistic opportunities for both the groups," Mr Grove-White said. The Tata group has about 100 companies and generates annual revenue of about $US80 billion ($A95.82 billion). GeoDynamics shares closed 44 higher at $1.40.

Poor ratings fire up operators

Sydney Morning Herald
Thursday 4/9/2008 Page: 2

ENVIRONMENT group WWF has launched an attack on Australia's power generators, accusing leading energy companies of being "dinosaurs" and "horribly unprepared" for a future in which greenhouse gas emissions must be reduced. Releasing its Carbon Future Scorecard, WWF accused the companies of lobbying for compensation for their plants under the Rudd Government's Carbon Pollution Reduction Scheme but failing to invest in technology to cut emissions at their most polluting power plants.

"Despite knowing for 20 years that carbon emissions would have to be cut, the carbon footprints of the worst performing companies from power generation and mining interests remain enormous and extremely damaging", WWF's sustainability manager, Paul Toni, said yesterday.

"It's remarkable how these dinosaur companies can complain about their future and ask for handouts but do zero to reduce their emissions." Two highly profitable global companies, Rio Tinto and Alcoa, were named as owning the worst performing power plants. Both are linked to aluminium smelters, one in Queensland and one in Victoria. The global energy company Intergen, which has two Queensland coal-fired generators, was also labelled a poor performer. On a five-star rating, the three companies scored "nil".

The three NSW power companies received two stars. The three, which the Government is trying to privatise, were saved from the lowest rating because of their research and investment in cleaner power sources and "clean coal" experimental plants. The survey judged the generators on whether they had invested in alternative power sources and whether they set greenhouse gas reduction targets. But it also took into account whether they were investing in research for renewable energy and "clean coal" demonstration plants.

The three named as the worst performers yesterday strongly disputed the ranking. Rio Tinto was stung by its "nil" score because of its majority ownership of the Gladstone power generator. A Rio spokesman, Ian Head, said the company operating the power plant on its behalf failed to answer the survey and highlight the company's investment in clean coal technology including contributing to the Coal2l Fund.

Rio Tinto also pointed to its power plants in WA and Tasmania which use gas and hydro and produce less greenhouse gas. Alcoa also reacted angrily. A spokeswoman, Michaela Southby, said it was "absurd and inaccurate" to say it was unprepared for a low-carbon future. Alcoa globally had reduced its direct greenhouse gas emissions from its smelting and other operations by 33 per cent compared with 1990 levels.

The WWF survey specifically relates to Alcoa's brown coal power plant at Anglesea in Victoria. Ms Southby said that plant "runs at benchmark efficiency for a plant of its age" and had the lowest greenhouse gas emissions per megawatt hour compared with the state's other brown coal plants. The head of Intergen, Brent Gunther, defended his company's plants in Queensland saying they used "supercritical" black coal technology making their generators Australia's most advanced coal-fired power stations.

Wind factor: the passion and the promise

Summaries - Australian Financial Review
Thursday 4/9/2008 Page: 68

Pete Ferrell drives a Toyota Tundra, owns the land hosting half the wind turbines included in the Elk River Wind Project, is an active proponent of wind energy who advises potential wind farmers across Kansas and is described by Horizon Wind Energy as 'a great spokesman for wind in Kansas.'

Wind is now a viable energy source rather than an unattainable goal of people who wear Birkenstocks, however the lack of infrastructure to transmit electricity around the state and the country undermines the industry's efficacy, as does the lengthy application and approval process, which can take up to four years, according to ITC Holdings. When Kansas Republicans overturned the state's regulator's refusal to allow Sunflower Electric Power to build two coal-fired plants Governor Kathleen Sebelius vetoed their actions.

Sebelius was then targeted by Sunflower print advertisements associating her with Iranian President Mahmoud Ahmadinejad. The US Energy Department-funded National Renewable Energy Laboratory says the of electricity from new wind farms is equivalent to the cost of electricity from new coal-fired power stations, if capital costs are taken into consideration.

Hydro rules out power rations fear

Hobart Mercury
Thursday 4/9/2008 Page: 3

Hydro Tasmania has ruled out power rationing despite the state's record dry. Chief executive Vince Hawksworth said rationing would only damage investor confidence in the industry's ability to meet demands. Hydro is in the grip of a record dry spell with water storages at just 22.4 per cent of capacity. It has been forced to buy 38 per cent of its power source from Basslink, gas and wind energy suppliers to compensate for its energy downfall.

The increased spending on outsourced power, which cost $100 million last financial year, is fuelling concern that power bills are poised to increase. Outsourcing power has also had a significant impact on the financial footing of Hydro and has renewed concern for its financial stability. Hydro used power rationing in the 1950s and 60s to overcome drought-related power shortages. Despite a $900 million debt, Mr Hawksworth said Hydro Tasmania was not in financial crisis.

He said the Government's recent transfer of $220 million of Hydro's debt to Transend had strengthened the balance sheet. "Consequently we have the financial reserves to manage the impact of the low inflows on our revenues," he said. Opposition energy spokesman Peter Gutwein said the Hydro's position was of grave concern. He called on the State Government to take a more proactive stance on energy conservation. "The Government must take a more strategic approach to power conservation and seriously consider energy conservation," he said.

Mr Hawksworth said while the situation was concerning, Hydro was making moves to ensure a stable future. "Low storage levels and drought are concerning, but we also have to think about the long-tern competitive future of Hydro," he said. "Sure we have short-tern issues to deal with but this is a long-term business that's been around for decades now and will be around for decades to come." The fears over power supply came as the Hydro announced yesterday it had invested $17.1 million in Victorian electricity retailer Momentum Energy.

Momentum sells accredited GreenPower sourced from wind generation to small to medium sized businesses throughout Victoria, New South Wales. Queensland and South Australia. Hydro has bought 51 per cent and the remaining 49 per cent will be bought in 2010. The investment is expected to secure financial gains for Hydro by tapping into the trend for businesses to turn green.

Tuesday 23 September 2008

Smart energy is the cheapest ticket says industry

Clean Energy Council
12 September 2008

NATIONAL: The Clean Energy Council today released their submission to the federal government's Green Paper, which highlighted the inclusion of energy efficiency as the cheapest path to a low carbon economy. "Implementing energy efficiency measures in homes and businesses will not only achieve dramatic emissions reductions, but will also save the nation from wasting extra energy and money" said Rob Jackson, GM Policy at the Clean Energy Council.

The Clean Energy Council estimates that the average household can save up to 15-20% off their electricity bills by making smart energy adjustments, such as upgrading insulation or installing solar water heaters. While the Council's submission highlighted the need for an emissions trading scheme over a carbon tax system, it warned that a carbon price alone would not achieve sufficient greenhouse gas abatement.

"We urgently need complementary measures like energy efficiency and renewable energy targets to ensure that emissions reductions are achieved quickly, safely and with minimal disruption to the economy and quality of life of everyday Australians" Mr Jackson stressed.

Also included in the submission was the definitive need for a price cap set well above the expected maximum carbon permit price. The Council indicated that the ramifications of a price cap set too low would be costly. "If we succumb to a price cap that isn't set high enough to encourage compliance, the government's Carbon Pollution Reduction Scheme (CPRS) will be rendered ineffective and the nation's emissions will continue to rise" said Mr Jackson.

For more information download a full copy of the Clean Energy Council's submission by visiting

Drilling rig deal key to SA geothermal plant

Courier Mail
Thursday 4/9/2008 Page: 63

ANOTHER large drilling rig will be in operation in Australia early next year attempting to help commercialise a geothermal energy play. Petratherm and partners Beach Petroleum and TRUEnergy will source the LeTourneau Lightning rig being built in Dubai from Waterford Drilling International Australia to sink two 4km holes on its Paralana project in South Australia. Petratherm hopes to have a heat exchanger capable of carrying superheated water between the two wells by early 2010, to supply electricity to the Beverley Uranium Mine.

Drier `new reality' to cost nation $30 billion to hydrate

Thursday 4/9/2008 Page: 2

AUSTRALIA will spend at least $30 billion finding new sources of water over the next decade, as the nation's biggest water authorities declared yesterday there was no drought, but rather a drier "new reality". The declaration in the Water Services Association of Australia's annual performance report comes as experts predict Melbourne will need multiple desalination plants to satisfy demand by 2050.

As the Brumby Government awards further lucrative desalination contracts this morning in Wonthaggi, a panel of experts surveyed by The Age warned the policy trend towards seawater desalination could see Melbourne lapse into a cycle of consumption that would be solved only by additional desalination plants.

The WSAA's annual report card found the rush towards large-scale water infrastructure was "unprecedented" but "appropriate", given most of the projects would not be reliant on Australia's increasingly fickle rainfall. "In some way or another, all of the major challenges confronting the industry can be traced back to climate change," the report said.

"The urban water industry no longer refers to the last decade of well below average inflows as a drought; it accepts that greatly reduced inflows into water storages are the new reality." Victoria will spend at least $4.9 billion on new water infrastructure from now to 2012. Academics such as Professor Barry Hart and La Trobe University's Lin Crase warned that billions more would be spent on more plants in the decades ahead unless the Government committed to alternatives that better capture rainwater.

Microbiologist Nancy Millis -who helped shape the Bracks government's water policy in the early 2000s - said building the desalination plant as a public-private partnership would create pressure to use all the water produced to ensure the project was profitable. She said she hoped this did not lead the Government to relax its successful water-saving efforts. "We need to continue to educate people as to the fact that water is a precious commodity," Professor Millis said.

Despite concerns that desalination would undo the water-conservation habits that have emerged, the WSAA predicted that increased water security would not erode the "water conservation ethos" that has emerged in urban Australia.

It said a carbon trading scheme posed enormous challenges and opportunities for the water sector, given the industry uses large amounts of electricity but also produces environmentally neutral biogas in the treatment process. The report said "fugitive emissions" such as methane and nitrous oxide made up a significant proportion of the water sector's greenhouse gas emissions and, respectively, had a warming effect of 20 and 300 times more than carbon dioxide.

"Fugitive emissions are the 'x factor' in the greenhouse gas footprint of the urban water industry," the report said. While water recycling continues to increase, the report warned the safety of recycled water was being threatened by more concentrated waste. Utilities reported 40% reductions in waste-water flows, meaning that less water was available to dilute the chemicals and dangers in waste.

Emissions trading will hurt most, says UBS

Thursday 4/9/2008 Page: 2

Babcock and Brown Wind, Woodside Petroleum, Energy Resources of Australia and Paladin Energy have been identified as among the companies that will benefit from an emissions trading scheme, according to a "winners and losers" analysis by UBS investment research.

A 120-page risk and opportunity assessment of Australian and New Zealand stocks by investment bank UBS has found that the utilities, uranium and some agriculture companies are in a prime position to benefit from a carbon-constrained economy while the major airlines, coal and manufacturing sectors will be the hardest hit. UBS's top five stocks to own include Babcock and Brown Wind, Contact Energy, Energy Resources of Australia, Paladin Energy and Woodside, with a price target 13% to 41% above the current share price once an emissions trading scheme comes into play during 2010.

"We believe these companies have the greatest positive exposure to climate change and/or have climate change as their key driver," the report said. Air New Zealand, Virgin Blue, Brisbane's RiverCity Motorway, AWB and the coal sector are among the companies that will be most adversely affected. "With the exception of uranium, we expect most resources to be negatively impacted by climate change in the long term, generally through higher costs and lower demand," the report said.

Other companies that UBS identifies as benefiting include WorleyParsons, due to its scope to increase liquefied natural gas development, Gunns, for its potential biofuels options and wood demand, and Asciano, as freight moves from road towards rail and shopping.

UBS expects generators to invest in carbon-reducing technology, low-emission generation and renewable energy. "Companies will also compete in the marketplace to appear 'greener than green'," the report said. UBS said it expected more stocks to be harmed than to benefit. Those to be hurt include some less obvious stocks such as Coca-Cola Amatil, Foster's Group and Lion Nathan, due to factors such as embedded carbon in transportation.

"We see the food and beverage sector suffering margin compression from the increased cost of regulatory demands, raw material inputs and capex (capital spending) for technology improvements," UBS said. Toll roads will be hit as petrol prices rise, paper producers, due to rising energy costs, metals and manufacturing, with higher raw material and production costs, and airlines as negative demand and higher prices of jet fuel start to bite.


Carnegie closer on wave power

West Australian
Wednesday 3/9/2008 Page: 58

Carnegie Corporation has moved a step closer to its Albany wave energy farm ambitions after a preliminary environmental review said it appeared unlikely to he scuttled on environmental grounds. Commissioned as part of a feasibility study being undertaken by Carnegie at the Albany site, the report said that, based on available information, "it appears unlikely there would be any 'fatal flaws' in the proposed development due to environmental considerations".

While the report means Carnegie has hurdled an early potential obstacle, it still has a long way to go to hit its aim of producing power by 2011, with the project still subject to further environmental surveys and Environmental Protection Authority approval. The company said it might also need to change some aspects of the project to incorporate environmental considerations, although the extent of alterations would not be known until further studies were done.

Carnegie managing director Michael Ottaviano said the "extremely positive" outcome was a good first step in a long environmental process. Carnegie hopes to use its so-called CETO technology to create a wave energy farm at Albany, where the State Government has granted it a five-year exclusive licence over 30,000 hectares of offshore and onshore land. The technology uses submerged buoys and seabed pumps to deliver pressurised seawater via a pipeline to drive hydro turbines onshore and generate electricity. Shares in Carnegie slipped 0.5¢ to 15.5¢.

LNG lifeline for trucks $150m bid to tackle fuel woe

Hobart Mercury
Wednesday 3/9/2008 Page: 16

TRUCKING operators in northern Tasmania are set to invest $150 million in a liquid natural gas plant to cut reliance on diesel and reduce greenhouse gases. It would be the first commercial pipeline-to-truck supply in Australia. LNG Refuellers chairman Ken Padgett said six stations would be established around Tasmania to refuel 120 trucks. "The plentiful supply of natural gas helps maintain a stable price making it an ideal fuel for heavy transport." Mr Padgett said.

He said LNG trucks released about 25 per cent less greenhouse gas compared to diesel powered trucks, as well as less particulate. In partnership with industrial gas company BOC. A micro-LNG plant is expected to be established at Westbuy, west of Launceston. "The LNG plant will have the capacity to produce 50 tonnes of LNG a day - the equivalent of 70,000 litres of diesel," BOC general manager Alex Dronoff said. "The natural gas is cooled to minus 165 degrees Celsius and it then becomes liquefied and stored and distributed." Mr Dronoff said Tasmania would have a world-leading industry when it switched to LNG.

Mr Padgett said the rise in fuel prices had prompted the consortium, whose members are mainly forestry-based, to consider alternatives. The operation would not rely on approval of the pulp mill. "We hope to be operational by the end of 2009 - initially the fuel will be taken up by group members but by 2010 we will see if there is significant take-up by other industry participants," he said. Mr Padgett said conversion of trucks to LNG would be expensive but the numbers would add up in the end.

We anticipate in terms of fuel cost there will be some significant savings but the major benefit will be the stabilisation of fuel cost so we get off the rollercoaster that is crippling the transport industry around Australia," he said. An advantage of LNG was that the trucks were quieter. He said the savings might be passed on to consumers when trucks f min other industries switched to LNG. The Economic Development Department and a $5.05 million grant via the Tasmanian Community Forest Agreement Industry Development Program aided the project.

Monday 22 September 2008

Carbon-storing mallee getting the credits

Friday 5/9/2008 Page: 4

STANDING in drought-ravaged land where water is an obsession, Martin Crevatin admires a four year-old stand of healthy trees thriving against the odds. Despite four very dry years, the young trees are growing from strength to strength, and with them is flourishing one of the nation's largest schemes for storing carbon in plants. The stand of mallees at Coolamon near Wagga is in one of the plantations run by CO2 Group, which plants mallee trees and trades the credits for the carbon they sequester.

The company mostly plants blue-leaved malice and york gum. Mr Crevatin is optimistic the trees will survive any changes the climate might throw at them. "Their capacity to deal with harsh environmental conditions and still grow and survive, that is one of the big things in ensuring their survival into the long-term to keep the captured carbon within the trees," he said. CO2 Group chief executive officer Andrew Grant said the company was the biggest biosequestration group in Australia and possibly the world.

Biosequestration uses plants to draw carbon dioxide from the atmosphere and sequester, or store, the gas in plant material. It was with some frustration that Mr Grant welcomed the news the federal Government finally seems to have learned about the scheme, with its climate change adviser Ross Garnaut this week saying Australia was uniquely placed to use biosequestration. "I have been banging on about this for five years in every forum I can so I welcome it," Mr Grant said. "I think it is as plain as the nose on your face." He said mallees were particularly suited to biosequestration schemes, being native and used to dry local conditions.

They belong in this landscape; they are long-lived, they are tough, they handle climate variation and they are not palatable to stock," he said. "They don't require watering or irrigation when they are being established, and they are just fantastic at accumulating biomass and therefore sequestering carbon." Mr Grant began his career working for a government body that paid landholders to clear mallee in Victoria but today his company has 9000 hectares of mallee plantation on its books.

Most of the plantings are done in partnership with farmers and Mr Grant said they designed the plantations to ensure they were integrated into their farming operation. He said there were many benefits for the partner farmers, who were paid for the land.

"They are often involved in the works, in establishing the trees, and they get all the fringe benefits of having the trees on the property," he said. "(The mallee planting) provides shelter belts for stock, prevents soil erosion and improves the microclimate for their cropping operation. It has biodiversity benefits and improves the liveability of the property." The company's clients, who purchase carbon credits, include Qantas, Macquarie Bank, Woodside, Origin Energy and the Big Day Out.

The CEO of the National Association of Forest Industries, Allan Hansard, said Australia's forest industries could sequester about 81 million tonnes of carbon dioxide each year by 2020, which is about 20 per cent of Australia's total carbon abatement task. "Forestry is the only industry in Australia that is carbon positive, meaning it sequesters more carbon than it emits," he said. "This puts forestry in the unique position of being able to take the burden off other industries."