WA ditches carbon offset rules

Controversial carbon offset rules that threatened West Australian gas projects worth tens of billions of dollars have been pulled.

Controversial carbon offset rules that threatened West Australian gas projects worth tens of billions of dollars have been pulled after the state’s Environmental Protection Authority caved in to pressure from the oil and gas industry.

WA Premier Mark McGowan intervened yesterday to end the week-long impasse, negotiating a truce in which the EPA will withdraw its recommendation that ­all new major industrial projects in the state be required to fully offset their greenhouse gas emissions. The EPA, he said, had also agreed to a months-long consultation over its position on carbon offsets.

The new rules were unveiled last week by the EPA — an independent body that advises the government on whether major projects should go ahead on envir­onmental grounds — and triggered­ immediate warnings that billions of dollars of major projects could be at risk.

Woodside Petroleum was a vocal opponent of the changes, warning that they could delay or kill off its proposed Scarborough and Browse liquefied natural gas developments. The projects are due for final ­investment decisions by the end of next year and are under assessment by the EPA.

Mr McGowan’s intervention followed his meeting yesterday morning with oil and gas companies including Woodside, Santos, Royal Dutch Shell and Chevron.

He said he was worried about the message the proposed guidelines would send and lack of confid­ence it would create for WA investment opportunities.

“Like everyone, I am concerned about climate change,” Mr McGowan said. “I want us as a ­nation to do more in relation to that, I want the world to do more in relation to that, but I think the guidance that was released last week was not the right way to go when you consider that all it would mean is that Queensland and NSW is advantaged against gas from Western Australia that produces half the emissions.”

The new consultation period means there are unlikely to be any new changes announced before the coming federal election. Labor, if elected, has promised to introduce new emissions reduc­tion targets, and Mr McGowan said those could well negate the need for the EPA to establish its own carbon offset requirements.

Woodside chief executive Peter Coleman, the most vocal of the proposals’ critics, said he welcomed­ the EPA’s decision.

“The McGowan government deserves credit for acting quickly but Australia can’t afford to keep shooting itself in the foot,” he said.

Mr Coleman said climate change was an important, complex issue that required stable and clear national policies. “Targets and policies should be set by elect­ed governments, not regulators.”

In announcing the new position­ last week, EPA chairman Tom Hatton said the offsets were required to help Australia meet its international climate change ­obligations.

In a statement, he acknow­ledged the need for more consult­ation but singled out the “many groups” that had voiced their support­ for the EPA’s changes.

“The EPA does not resile from the need to reduce Western Australia’s greenhouse gas emissions,” Dr Hatton said. “Nor do we resile from our absolute right and obligation to provide advice to the government on these matters.

“However, it is important that the detail of such advice is more fully developed and the practical applications are well understood.”