Australia's booming oil and gas sector is ramping up its campaign to be exempted from Labor's carbon tax.

Resources giant Woodside says the use of liquid natural gas (LNG) helps to cut global greenhouse gases, and so deserves special consideration.

The LNG industry is currently building $90 billion worth of projects, with another $90 billion to be signed off around the same time as the Federal Government wants Parliament to pass the carbon tax.

Don Voelte, the CEO of the largest Australian-owned oil and gas producer Woodside, says LNG can help deliver a "better world" and should be excluded from the carbon tax.

"Everywhere else in the world understands gas," he said.

"People in the United States see gas as the saviour - cheap, clean, transitional fuel to a better world.

"Gas is good and Australia is penalising it. We don't get it."

Mr Voelte says the assistance deal struck two years ago under the carbon pollution reduction scheme, which offered LNG producers 66 per cent free permits, was predicated on there being a global agreement.

He says Australia "going it alone" will render the sector more trade exposed, so it is "game off".

According to a report commissioned by the Petroleum Production and Exploration Association, up to 4.3 tonnes of emissions are saved every time China uses a tonne of LPG instead of coal to generate power.

"There is no point in constraining the very industry that is the key to assisting the world move to a cleaner energy burning future," the association's chief executive, Belinda Robinson, said.

Mr Voelte says the carbon tax could be the "breaking point", delaying some projects and raising alarm bells about Australia's investment reputation.

"It seems backwards, what we're doing," he said.

"I can't help but believe what we are doing is misguided in the respect that domestically we are punishing our own consumers, our own exporters, and we are actually hurting the very thing that is probably the biggest issue for Australia - and that is productivity."

The Federal Government says it is willing to talk about a better deal for the LNG sector.

Resources and Energy Minister Martin Ferguson says the world is entering the LNG age, with Australia set to be the world's second biggest supplier by 2015.

"Every industry tells me they deserve a better deal," he said.

"We've indicated a willingness to have further discussions with the LNG sector in terms of their arguments about a change in the nature of the industry compared to when we last settled the energy-intensive trade sector from an LNG point of view back in November 2009."

The Government is indicating that most industry assistance will not change.

But it will sit down with the LNG and steel industries in the next few weeks to hear their cases for improved compensation, and plans separate talks with the energy sector and coal producers.