Don't underestimate coal: Woodside CEO

WOODSIDE Petroleum CEO Peter Coleman told delegates at a conference yesterday that no one should underestimate a coal industry with its back up against the wall.

Anthony Barich

Coleman said this in an address to the Australian Petroleum Production and Exploration Association’s national conference in Melbourne yesterday.

While other panellists, including Oxford Institute for Energy Studies Professor Jonathan Stern, Deloitte US oil and gas leader John England and QGC managing director Mitch Ingram, discussed the strong correlation between Asian urbanisation and energy use on a per capita basis, Coleman warned about hubris among industry thinking it’s the saviour of the developing world.

He said that while “we’ve got to believe that energy use will go up, equally I will tell you that the coal guys aren’t going away”.

“Just because we have a view of their carbon footprint, they’re into survival mode,” Coleman said of the coal industry. “Every coal-fired power station that gets built is 40 years of an opportunity that we have lost in this industry.

“So we can’t sit here with our projections and think just because energy demand growth is going up that we have the right to fill that demand growth. We have to earn it through making sure that we can be competitive in our cost offerings in getting that into the marketplace.”

For Australia, he said, the challenge as oilers move beyond the construction phase to the production market and trading phase, is to not let concerns about tax issues – prominent in the media, particularly concerning the likes of BHP Billiton – distract from the critical issues that will affect the companies’ future.

“We need to get beyond what we see in our newspapers every day and forget about our tax positions – the reality is we are moving beyond being a constructor-developer to a producer-marketer-trader,” he said.

“Are we ready as a country for that, and as companies? The next 20 years are really important for us because we’ve made the investment, now we need to get the return on the investment; and if we haven’t geared ourselves up to be a world-class producer-marketer-trader, then it’s unlikely we’ll get the sort of returns we expect.”