BHP joins attack on carbon trading

BHP Billiton chairman Don Argus has joined the industry chorus against the Rudd Government's planned emissions trading scheme, saying it could crimp investment that is desperately needed to meet the nation's growing power demand. Addressing the Australian Industry Group in Canberra yesterday, the head of the world's biggest miner also called for serious debate about using nuclear reactors for domestic power as a way to cut carbon emissions, The Australian reports. Mr Argus, in his first comments on the Federal Government's scheme, said carbon prices could not be accurately predicted under the current proposal and that this would sideline extra capacity needed as soon as 2011 to meet demand. "Regulatory uncertainty and market distortions are to blame for new investments not occurring at the speed and magnitude required,'' Mr Argus said. "It will be hard for generators to predict carbon prices under Australia's proposed carbon pollution reduction scheme. Therefore, they will be reluctant to invest,'' he said. Instead, Mr Argus called for more discussion on a carbon tax, which he said would give more cost certainty. "Australia should at least consider and debate alternatives to a cap-and-trade system that are more certain,'' he said. The comments come after the Business Council of Australia last week warned that the Government's plan to cap emissions from 2010 would force companies to close and move offshore. The BCA has proposed that the Government fix a carbon price at between $10 and $20 a tonne and provide more generous compensation to trade-exposed businesses unable to pass on extra costs. Mr Argus also warned about "carbon leakage'', where development of poorer quality reserves or less efficient processing overseas is encouraged by the carbon cost of producing exports here. In notes to his speech, Mr Argus said that Australian power generation was in "desperate need of rapid investment'' and Australia needed to consider the broadest range of options, including expanding gas-fired production and talking seriously about using the country's vast uranium resources for domestic use. BHP is looking at ways to expand production from the massive Olympic Dam copper, gold and uranium deposit. Source: The Australian