WA Ditches Carbon Offset Rules

A directive from Western Australia’s Environmental Protection Authority that all new emissions-intensive projects should be carbon-neutral put in jeopardy proposed new LNG projects worth over $45 billion and triggered warnings of threats to the broader resources industry that underpins the state’s economy. Oil and gas producers had expressed concern that the proposed guidelines would jeopardise a number of new projects in the state.

Macquarie Group had warned that the guidelines are likely to result in Woodside Petroleum’s Browse LNG project being delayed, and its modelling suggests that the cost of Browse could blow out by more than $US5bn. Woodside COO Meg O’Neill told a conference in Perth that the EPA guidelines could jeopardise both the Browse and Scarborough projects, as well as the long-term future of the North West Shelf venture.

The EPA has now agreed to shelve new guidelines on emissions-intensive projects following intervention by the state government. Premier Mark McGowan stepped in following meetings with representatives of energy producers. The EPA will undertake further consultation regarding its proposed rules on carbon offsetting for new industrial projects.

Woodside said the decision should be a message to other states.

“We welcome the EPA’s decision to withdraw its guideline and consult, but regret the instability of the past week,” a Woodside spokeswoman said.

“Targets and policies should be set by elected governments, not regulators – all the states should take note of this episode in WA.