The law of unintended consequences or a lot of hot air? Gas producers in Australia are up in arms at the government’s proposed cap-and-trade carbon emissions scheme. If Canberra goes ahead as planned, it would threaten the viability of nearly $60bn worth of liquefied natural gas projects, says Woodside Petroleum.

As Australia’s second biggest oil and gas producer, Woodside is clearly talking its own book. But the company may have a point, as LNG might produce insufficient emissions to qualify for assistance. Under the Australian proposals, companies producing in excess of 1,500 tonnes of carbon dioxide/A$1m of revenue will be eligible for relief designed to protect emissions-intensive companies’ ability to compete globally. LNG producers could be too clean to claim protection but too dirty to be off the hook. Moreover, and unusually for a fuel, LNG gives off emissions at the point of production (liquefaction) as well as during combustion. What that means, in essence, is that Australia suffers part of the carbon dioxide hit while consuming countries – which include notorious pollution-belchers like China – benefit from cleaner fuel. Exporting that to Asia should count for something, since China and its ilk have only the most cursory obligations under the Kyoto Protocol.