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The head of oil and gas giant Woodside says Peter Dutton’s refusal to engage with the federal government on its signature emissions-reduction bill opened the door to the fringes of politics to influence climate policy after a decade of dysfunction and uncertainty.
Woodside chief executive Meg O’Neill on Wednesday praised the Albanese government for working to shift the decarbonisation debate “towards the centre”, and said the company appreciated the necessity of tightening emissions caps on the country’s heaviest industrial polluters under the safeguard mechanism legislation.
Woodside CEO Meg O’Neill.Credit: Dominic Lorrimer
However, she lamented the Coalition’s refusal to negotiate with the government over its landmark reforms, which she said would have helped provide industry with the certainty of a sustainable and long-lasting approach to climate policy.
“For Australia to tackle climate change sustainably, it’s got to be done in the centre and in a way that can endure, regardless of who is in power,” O’Neill told the National Press Club on Wednesday.
“Otherwise, you ping-pong from government to government, playing the fringes, with outcomes that do not serve the Australian people well … just look at the past 10 to 15 years of climate policy in Australia.”
The safeguard mechanism – the first federal emissions-reduction policy since the Gillard government’s carbon tax was axed in 2014 – requires the top 215 polluting facilities, including coal mines, gas-processing plants and manufacturing sites, to reduce their carbon footprint by a cumulative 28.5 per cent by 2030.
Woodside is Australia’s largest owner of oil and gas production assets and a significant emitter of greenhouse gas emissions. Woodside operations, including the Gippsland Basin oil and gas joint venture in Victoria and its North West Shelf project and Pluto liquefied natural gas (LNG) plant in Western Australia, are covered by the safeguard scheme.
The government’s latest reforms were legislated with the support of the Greens in the Senate, enabling the minor party to secure a range of measures targeted at limiting future fossil fuel production, including a hard cap on overall emissions to ensure real-world emissions reduction regardless of how many carbon offsets a company purchases.
O’Neill also urged Treasurer Jim Chalmers to resist the urge to raise taxes on oil and gas producers’ soaring profits, insisting such a move could deter investments in developing new domestic energy supplies that will be needed to keep a lid on prices in the future.
The nation’s $91 billion LNG industry has enjoyed record profits over the past year as Russia’s invasion of Ukraine roiled global energy markets, intensified competition for spare cargoes of fossil fuels and ignited prices.
Earlier this week, Chalmers said he was weighing a series of recommendations from Treasury on potential reforms to the $2 billion-a-year Petroleum Resources Rent Tax.
O’Neill said “overreaching” on tax reforms could risk undermining future revenue.
“We urge the government, in any changes to the tax framework, to consider the long term and preserve Australia’s ability to attract the next generation of investment, jobs and energy supply,” she said.
The PRRT is levied on offshore oil or gas projects at a rate of 40 per cent of their taxable profit, but this is applied after generous deductions for capital investments, raising questions over the quantum of revenue it raised compared with the billions reaped in profits by gas giants including Woodside, Chevron and Santos.
While the government is yet to finalise its position, Chalmers declared there was an open question over whether the scheme was delivering the revenue that the community expected.
“We’ve said for some time now that we want to make sure that the PRRT arrangements are up to scratch,” he said.
The Coalition was contacted for comment.
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