Gas Players Win Carbon Backdown by Western Australia Regulator

(Bloomberg) -- Western Australia’s environmental regulator will withdraw controversial new guidelines on carbon emissions, providing relief to gas producers who said they could lead to delays in billions of dollars worth of future developments.

State Premier Mark McGowan said the Environmental Protection Authority’s recommendations published last week would be shelved to allow for a consultation process that may take “some months.” He made the announcement following a meeting with major gas producers, including Royal Dutch Shell Plc and Chevron Corp., and industry associations.

“This is a good outcome and allows for there to be proper consultation,” McGowan said. “Like everyone, I am concerned about climate change and I want us as a nation to do more. I want the world to do more. I think the guidance that was released last week was not the right way to go.”

Woodside Petroleum Ltd., also at Thursday’s meeting, said the previous day that its $31.5 billion project pipeline in the state could be stalled if the guidelines were enforced.

Though EPA’s recommendation that large-scale projects should offset all net direct carbon emissions was not binding, the guidelines drew howls from the industry. McGowan had earlier been quick to state his concern that applying it would put the state at a disadvantage to operations elsewhere.

“The McGowan Government deserves credit for acting quickly, but Australia can’t afford to keep shooting itself in the foot. Governments and regulators need to act to give us confidence to invest,” Woodside Chief Executive Officer Peter Coleman said in a statement after the announcement. “Targets and policies should be set by elected governments, not regulators -- all the states should take note of this episode in WA.”

A Shell spokeswoman said the company welcomed the consultation process. Chevron wasn’t available to comment.

The EPA confirmed the withdrawal, saying in a statement it “appreciates that further discussion is merited to ensure that industry and stakeholders can anticipate how such guidelines can apply to proposals.”

©2019 Bloomberg L.P.