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Greenhouse gas haunts WA industry

Greenhouse gas emission treaties could destroy WA’s chance to develop downstream processing industries, says Woodside Petroleum managing director John Akehurst.

At a recent Israeli Chamber of Commerce luncheon Mr Akehurst said developed countries – known as annexe 1 nations, including Australia – had agreed to reduce greenhouse gas emissions to 5 per cent below 1990 levels.

But non-annexe 1 nations – 132 of the world’s 166 nations – are under no such obligation.

Under the 1997 Kyoto treaty, companies looking to set up greenhouse gas emitting industries in annexe 1 nations will have to buy greenhouse gas credits.

However, there is no such requirement if the company sets up in a non-annexe 1 nation.

It makes better economic sense to set up a greenhouse gas emitting industry in a country where the purchase of greenhouse gas credits is not required.

“WA is exposed to this risk because of the structure of the economy. We rely heavily on our resources and add-ing value to them,” Mr Akehurst said.

“We need to find an international protocol that allows credit for greenhouse gas emission reductions we are making around the world.

“Under the Kyoto agreement, only the emissions we make in Australia are counted.

“But we are the only annexe 1 nation exporting Liquefied Natural Gas.

“We export LNG to Japan. If Japan used LNG in place of coal it would greatly reduce the amount of emissions that country makes.”

However, processing LNG requires burning of hydrocarbons that adds to Australia’s greenhouse gas emissions.

Yet countries using WA-made LNG in place of higher greenhouse gas emitters such as coal reduce their emissions.

Creating direct reduced iron will also add to Australia’s greenhouse gas emissions. However, Mr Akehurst argued it would globally reduce the world’s greenhouse gas emissions by cutting the energy needed to transport WA’s raw iron ore to its destination and the energy needed to refine it.

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