Carbon scheme the right thing to do

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SANTOS supports the introduction of the Federal Government’s carbon pollution reduction scheme by 2010. “It’s the right thing to do,” chief executive David Knox said. However, he added: “It has to be done in a framework which is economic for independent companies such as ours.”

His comments are in sharp contrast to the views of Don Voelte, managing director of Australia’s biggest oil and gas company Woodside.

Mr Knox believes carbon pricing will accelerate demand for gas to fuel power stations, rather than coal, as gas typically produces about 40 per cent less pollution.

“Gas has an enormous role to play, I see a lot more gas-fired power stations,” he said.

“SA produces 56 per cent of its electricity energy from gas. Australia produces 8.6 per cent. NSW and Victoria produce about 1 per cent.

“So SA is leading the way on the gas front, the other states need to catch up, and will catch up over time. Carbon pricing will naturally make this happen.”

This demand, and Santos’ suite of projects bodes well for the company’s future.

“Our ultimate vision is to be the leading energy company in Australia,” he said.

Santos has put a “toe in the water” as a generator by deciding build a power station at Shaw River in Victoria, near the SA border. It provides an opportunity to deepen its understanding of the energy market by examining the technical and commercial sides of power generation.

Mr Knox supports a bigger role for renewables in the energy mix.

“The important thing is that we take a very intelligent approach to renewables,” he said.

“(There should be) within-day pricing for solar. When solar panels are operating at their most efficient - in the middle of the day - is also when the air conditioners are on maximum.

“Electricity is much more valuable at that hour than any other hour of the day, so the solar rate can be much higher.

“By using market provisions carefully, you can really encourage sensible use of renewables - and I fully support that. But they do have to be economic, we musn’t start doing things that are uneconomic.”

By CHRISTOPHER RUSSELL