JULIA Gillard's ambitions for a huge increase in gas use because of the carbon price have been dealt a blow as mining giant Rio Tinto warns that official estimates of Australia's gas reserves are overly optimistic and revealed it is struggling to secure supplies in Queensland.
Rio had also attacked the federal government for being too quick to accept that Australia's era of cheap energy has come to an end. "The acceptance that Australian industry will lose the competitive advantage it has derived from energy seems defeatist at worst and at best aspirational and not in the national interest," Rio says. "Australia needs to better understand which domestic energy costs are increasing, and to the extent they are, and why they are rising faster than in other countries."
The warnings, contained in a submission by Rio to the government's draft energy white paper, cast fresh doubt on the government's plans for gas to play a major role in replacing coal electricity generation as part of its Clean Energy Future plan to cut carbon emissions.
The submission comes just days after Christine Milne assumed the leadership of the Greens. Last year, Senator Milne said the Greens saw gas "at the maximum as a bridging fuel" and challenged the government to produce research to back the claim gas was cleaner than coal.
The Australian
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