AGL boss concerned over carbon trading

The head of Australia's biggest energy retailer is concerned a significant number of companies could be carved out of Australia's mandatory carbon trading scheme.
AGL Energy chief executive Paul Anthony also has questioned the viability of oil and gas producer Santos Ltd's plan to spend $7 billion on a liquefied natural gas plant at Gladstone in Queensland.
Mr Anthony has been an outspoken critic of the federal government's carbon trading agenda.
Last month he expressed his disappointment that a carbon price would not be set by the government until next year, with mandatory trading due to begin in 2012.
Mr Anthony said he had been left puzzled by some other aspects of the government's proposed trading scheme.
"First and foremost, the question we ask ourselves is how much of industry is going to be carved out by having free permits," Mr Anthony told Sky News Sunday Business.
"That leaves the remainder of the industry having to pick up - if you like - the tab for the remainder."
The government's trading scheme, due to go live in 2012, would fail if overall aspirational targets were set too low, permits were set too leniently or permits were given away, Mr Anthony said.
"For the very industry you're trying to control, if they have a free ride in the system, you're not going to get the desired effect in terms of a healthy trading scheme for carbon."
The lack of a carbon price, or the existence of a carbon trading exchange, in Australia has forced companies that want to trade carbon voluntarily, like AGL, to trade on an exchange in Chicago.
Meanwhile, Mr Anthony said Santos's LNG proposal could affect gas prices as a new supplier came on to the market on the eastern seaboard, but he was not totally convinced they would be able to pull off the ambitious project.
"There are two question marks," Mr Anthony said.
"One, can they withstand the capital intensity of building such a very large project given their market cap, and secondly, can they secure sufficient molecules of gas to ever bankroll such a large project."
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