Asia to Buoy Australia in Clean Energy Shift

Prime Minister says even with carbon tax demand for energy exports will create bright future

Insatiable Asian demand for energy will ensure Australia's mining industry thrives despite a carbon tax, Prime Minister Julia Gillard saido n April 25, defending her plan to tax greenhouse emissions.

Gillard has pledged to charge polluters from July 2012 under a fixed-price scheme that would move to a full cap-and-trade model linked to international carbon markets within five years. But she is facing stiff opposition from her political rivals and the business community, with the powerful coal industry warning the plan will drive investment offshore and damage Australia's mining-powered economy.

But Gillard, who is currently on a whirlwind tour of major trading partners China, Japan and South Korea, said intense Asian demand for energy resources would ensure the vital resources sector continued to boom.

"Our region is hungry for energy," Gillard told The Australian newspaper on the sidelines of her Asian visit."

"We are a reliable supplier to each of the countries that I'm visiting on this trip."

"The prospects in each country is for growth -- for wanting more of our resources, particularly more of our LNG. I'm absolutely confident that we will have a bright future for our energy exports with a price on carbon."

Australia is on the brink of becoming the world's second-largest liquefied natural gas (LNG) exporter, and sales of the clean-burning fuel are forecast to increase exponentially as a raft of major projects come online.

China's push away from heavily-polluting coal and crude oil into cleaner energy sources is expected to underpin soaring demand for LNG, extracted from underground coal seams in Australia and liquefied for shipping.

Petrochemical giant Sinopec last week signed a massive 20-year supply contract with Australia-Pacific LNG, a US$35 billion joint coal seam venture of Origin Energy and ConocoPhillips.

Gillard said her carbon tax would "accelerate that diversification of our ability to generate energy" and boost the clean energy sector.

"We can price carbon and have a very strong future as an exporter of energy, including LNG," she said.

Australia is the world's worst per capita polluter, largely because it relies heavily on coal-fired power, and also exports millions of tons of the fuel every year to Asian electricity companies and steelmakers.

It is home to the world's largest coal export port, with total shipments worth Aus$43 billion last year (US$46 billion).

Copyright Agence France-Presse, 2011

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