Royal Dutch Shell Plc, BG Group Plc and Santos Ltd., among energy producers planning $185 billion of gas projects in Australia, face a new environment minister, Tony Burke, as they seek government approval to proceed.
Clean-power companies, calling for a price on carbon emissions in a country where more than 80 percent of electricity is generated from coal, must also put their proposals to a new minister, with Greg Combet replacing Penny Wong in the climate change portfolio. The appointments were announced Sept. 11.
Prime Minister Julia Gillard, who held on to power after the closest election in 70 years, assembled her cabinet as energy companies look to advance with more than a dozen liquefied natural gas projects targeting Asian demand. Gillard gained Greens Party support in exchange for setting up a climate change committee aimed at imposing a carbon price.
Burke, 40, is minister for sustainable population, communities, environment and water. Combet, 52, whose role includes energy efficiency, previously assisted Wong, who has moved to finance. Peter Garrett, who had responsibility for the environment, became schools minister.
Santos, BG and Origin Energy Ltd. intend to commit by the end of the year to ventures that will convert gas from coal seams into liquid for export. In July, Garrett, former lead singer of rock band Midnight Oil, deferred decisions on the Santos and BG projects until October.
“The risk has to be the potential for this to take a bit longer than you think,” Andrew Williams, an analyst at Credit Suisse in Melbourne who covers Santos, said by phone today. “But I don’t think it would be a disastrous delay.”
Coal Engineer
The environment department also extended a review of Shell’s proposed Prelude development until October. A decision on Shell’s plan to pioneer the use of a floating LNG plant off the nation’s northwest coast had been expected in July.
Burke previously oversaw agriculture, fisheries and forestry, in addition to population. Combet is a former coal engineer who led the Australian Council of Trade Unions from 1999 to 2007, according to his website.
Companies represented by the Clean Energy Council earlier this month wrote an open letter to the country’s major political parties advocating a price on carbon to give businesses the certainty needed to invest in renewable technologies. AGL Energy Ltd., CLP Holdings Ltd.’s TRUenergy Pty and Vestas Wind Systems A/S were among companies to support the call.
Oil Spill Report
Kevin Rudd was replaced as prime minister in June after a slump in voter support to election-losing levels. Rudd shelved emissions-trading plans because of opposition in the upper house Senate and a lack of action by other countries.
Martin Ferguson, who remains Gillard’s resources and energy minister, said in August that the government would expand the powers of the National Offshore Petroleum Safety Authority if the Labor Party continued to govern the nation. Ferguson has yet to release the findings of a June report into last year’s oil spill from PTT Exploration & Production Pcl’s Montara well.
The Australian Petroleum Production & Exploration Association said Sept. 11 that it “looks forward to working with each of these ministers to help settle a credible climate change policy that enables natural gas to deliver the step change necessary” for reducing carbon pollution. The industry has about A$200 billion ($185 billion) of proposed LNG projects in Australia, according to the lobbying group.
