The Australian reports that Clatex is considering builing a coal seam gas to LNG plant in Brisbane - Caltex looking at LNG production .

OIL refiner Caltex has become a surprise potential exporter of Queensland's vast coal seam gas reserves, with new chief executive Julian Segal flagging a $500 million Brisbane liquefied natural gas plant as part of the company's potential growth plans.

Speaking at a lunch in Melbourne, Mr Segal said the company's Lytton refinery at the mouth of the Brisbane River would be a good place to host an LNG plant of a similar size to the smallest of five that are proposed at Gladstone.

"If you look on the east coast, a key ingredient for success (in LNG plants) is location, to have the infrastructure of the port," Mr Segal said. "We've got just the right facility at Lytton to do that."

He said the typical cost of a project would be about $500m, which was about the cost of LNG Limited's and Arrow Energy's planned 1.5 million tonnes a year plant at Gladstone. Other proponents Santos, BG Group, Origin and Shell are looking at projects with costs above $8 billion.

The ABC's Lateline program during the week had an interview with Caltex Australia CEO Des King, who said we could be looking at an oil price of $200 a barrel in the not too distant future.

ALI MOORE: You've warned you'll cut production if refinery margins fall below operating costs, how close are they right now?

DES KING: We're a long, long way away from that point, but we just wanted to make people realise that we're certainly prepared to run this business for the long term and that means running for maximising cash.

So it would be, for example, if margins were to drop in the second half of the year significantly we would operate the business to maximise cash, which would be cutting back on output if we needed to. That's just a worst case scenario and we certainly hope we don't have to go there.

ALI MOORE: You say worst case scenario, but given the rising cost of crude and the stronger Australian dollar, neither of which show any sign of turning around, is your scenario more likely than not to become reality?

DES KING: I don't think it's likely to become a reality, but it's important that we have plans in place should that eventuate.

What's really going to happen is going to depend on what happens in the United States. The United States is the biggest consumer of fuel, particularly petrol. If their recession becomes extended that could impact the margins for petrol.

It's really that refining margin that's important. We certainly hope the US slowdown isn't extended and they start getting back on track for growth again. It's just scenario planning for us.

ALI MOORE: Let's look at the price of oil. It's currently nudging US $120 a barrel, is $200 a barrel on the cards? Where do you think it's heading?

DES KING: We wish it would go lower rather than higher. We just don't know. It's all supply and demand.

But looking at how the world's demands for energy keep going up and up, I think a $200 oil price is somewhere in the future. We don't know how far away it is. But even though the world is going into a slower growth this year, China and India are still going ahead and a number of people are saying we're going to consume over a million barrels a day more oil in 2008, compared 2007.

ALI MOORE: If we bring it back to Australia and the price at the petrol pump, what will that mean, we're already close to two dollar petrol?

DES KING: We are and if you look at the cost of crude, petrol today is about 1.50 on average and the cost in crude in that is 80 to 85 cents. It is a large component so it does impact the price at the pump.

Obviously if the Aussie dollar gets weaker that will actually drive up that element of the crude price if the crude price stays the same. Hopefully the price of crude will soften before it goes up, but the long term trend unfortunately is for higher crude oil prices.

ALI MOORE: Can you be anymore exact than that? What do you think the price at the pump will be in, say, three months' time?

DES KING: It's very hard for us to project that. It depend on refinery production worldwide, US demand a whole number of features. But I think there may be ups and downs, but long term unfortunately I think the price of petrol is going to keep climbing.

ALI MOORE: At what point do you think price will really become prohibitive for motorists? At what point do people stop buying petrol, leave the car at home, curtail the amount of time they spend on the road?

DES KING: We've already seen pretty slow growth of petrol. If you look at the total demand for petrol in Australia in 2007, compared to 2006, there was only 0.8 per cent more petrol consumed in Australia 07 compared to 06. When we look at the most recent result, first quarter 08 compared to first quarter 07, it was pretty flat. People are already not buying more and, in fact, we're starting to see the impact of the higher prices on consumption.

One story from last week that I missed while I was on holiday was local refiner Caltex Australia calling for a carbon tax to be introduced.

While I think carbon taxes are a great idea, it appears Caltex were more interested in shielding themselves from the cost of carbon trading schemes than in good policy. Caltex's preferred policy option is for refiners to be exempt from any future carbon trading market - with drivers instead paying a direct carbon tax on petrol.

The claimed benefit of this policy is that it would shield refiners from "unacceptable" levels of risk - with the Caltex spokesman further recommending that the tax on petrol be "clearly identifiable at the fuel pump", as this would be "more effective at changing driver behaviour" compared to the costs of carbon trading which would have "much less carbon price visibility" and that this "hidden" tax would be "far less environmentally effective".

Just in case your head isn't spinning yet with all this balderdash, the spokesman went on further to whinge that under an emissions trading scheme exposed them to a risk that "middlemen", such as "financial institutions and offshore speculators" would become involved in the market and push carbon prices higher. Who knew that the oil industry was openly afraid of markets. What next - calls for the government to regulate the price of petrol ?

John Connor of the Climate Institute said that this proposal would set a dangerous precedent, and that other groups would also demand exclusions. The RACV dubbed the idea "very cheeky", further noting "It is far too early for Caltex to be calling for this burden to be put on motorists when we are already struggling with record high petrol prices, in a country that is devoid of an alternative fuel policy".