Australia is beautifully equipped for a world that no longer exists. Coal remains the nation’s second largest energy source. According to the Energy Update 2017, in 2015-16 coal was the source of 32 per cent of Australia’s energy, just behind oil at 37 per cent but well ahead of natural gas (25 per cent) and streets clear of renewables (6 per cent). In fact coal consumption grew by 3 per cent in 2015–16, although consumption was still 17 per cent below the peak in 2008–09. All the growth in 2015–16 was black coal, with brown coal consumption falling by 4 per cent. Over 60 per cent of Australia’s electricity generation remains coal-fired.
There has been conflicting news for Australia’s troubled but still profitable coal industry this week. China announced it was banning all coal imports until at least next year backing up a ban imposed earlier this year due to over-supply and it is not expected to be lifted until early 2019. Despite this, demand from other Asian markets – especially South East Asia is pushing prices for both thermal and coking coal up and there are huge queues in Australian coal harbours with Australia’s total thermal coal export level expected to triple from 2017 to 2030.
The latter news is music to the ears of Australia’s Resource Minister Matt Canavan whose Rockhampton office is Queensland coal production heartland. In an op ed for the Australian Financial Review Canavan said coal has once again become Australia’s biggest export and he welcomed last week’s International Energy Agency forecast that coal demand is set to grow by 492 million tonnes in the Asia Pacific region by 2040. “The biggest opportunity lies in India,” Canavan said. “With coal demand there set to grow by over 600 million tonnes by 2040. Last year, India imported 160 million tonnes of thermal coal but Australia accounted for just 3 million tonnes of that.”
Canavan is pushing for the approval of the Adani Carmichael project in his region which is still awaiting financial approval. In its latest media release Adani pushed the project’s job creation “In the initial ramp up and construction phase there will be more than 1500 direct jobs on the mine and rail project,” they said. “Economic modelling, such as that used by the Queensland Resources Council in its annual resources industry economic impact report, shows that each direct job in the industry in Queensland supports another four and a half jobs in related industries and businesses, therefore we can expect to see more than 7000 jobs created by the initial ramp up of the Carmichael Project.”
But as Guy Pearse, David McKnight and Bob Burton, the authors of Big Coal (2013), point out the question needs to be asked: is our increasing dependence on coal a road to prosperity for Australia or a dead end? They acknowledge coal is a $48 billion export industry employing 46,000 people however with 80 per cent foreign ownership most of the profits go overseas. Any investment that stays in Australia does not go on employment as the industry is increasingly automated but on equipment, mining camps, railways and ports which are exclusively used by the industry.
And this does not begin to touch on the matter of climate change which Canavan and Adani studiously ignore. As the IPCC latest report Global Warming of 1.5 °C makes clear 1.5°C is a best case estimate and under that scenario coral reefs, for example, are projected to decline by a further 70–90% with larger losses (>99%) at 2ºC. These are the same coral reefs that lie off Matt Canavan’s shoreline and employ thousands of locals in tourism-related industries but there is no hue and cry from him (or the local daily papers that dot the Reef) about a best case losing 70 per cent of one of the world’s greatest natural wonders.
The IPCC has little to say about coal other than “a steep reduction in all (coal) pathways” is needed to even make 1.5°C. It takes it as read that coal is simply not part of the planet’s energy mix of the future. Studies by the Post Carbon Institute and others identify coal as the greatest threat to civilisation and its continued unfettered use will lead to catastrophic climate change. Yet the pace of change is ineffectual. The global coal industry represented by lobby groups such as the World Coal Association trumpet the growing demand for its product despite also claiming they are “about obtaining those strategic benefits of coal while addressing the environmental challenges that come with it.”
Yet despite many magic pudding statements about “clean coal” there has been almost zero attempt to sequester any of the vast amount of carbon generated by the industry. And attempts such as Australia to impose the costs of these have met fierce and politically well-connected resistance. When the Rudd government tried to impose an emission tradings scheme in 2009 the coal industry fought the provision to tax fugitive emissions from methane released by mining and launched an alarmist ad campaign claiming thousands of jobs would be lost. They did the same when the Gillard government brought in the carbon tax supported by an opportunistic political opposition.
The Abbott government did not take long to remove the carbon tax, a short-sighted decision it was always clear Australia was going to repent at leisure. Now even previous supporters of the axing, such as BHP, Rio Tinto and Woodside, the country’s largest oil and gas producer are calling for market mechanisms. Woodside CEO Peter Coleman said a carbon price was needed to “ensure that the most effective energy gets into the system”. Disappointingly but unsurprisingly, the federal government has dismissed the call as Woodside “wanting to sell more gas”.
It’s true that Woodside would prefer more investment in oil and gas rather than coal, but it is also true that coal is by far the biggest contributor of emissions. As the Big Coal authors say, we need to view coal as the new tobacco or asbestos, “a dangerous product whose use is strongly discouraged by the government and ultimately abandoned.” That will be incredibly difficult for the world’s second largest exporter that was for many decades a cheap source of energy that powered Australia’s manufacturing industry. As in the UK the coal industry was a constant battle between employers and employees over safety, pay and conditions and today’s international corporates are just as ruthless in fighting off any attempts to price carbon, tax their profits or regulate their actions.
They are assisted in their greed for Australian resources by state governments dependent on their mining royalties. Big projects are routinely fast-tracked past environmental impact assessments by being of “state significance”. Prime agricultural land is regarded as “overburden” by the industry, workforces are fly in fly out contributing little to local towns, the valuable water table is something to be drawn down, while massive profits accrue to mostly overseas mining barons.
It is unlikely the current federal government will see much problem in this. Last year the then-Treasurer Scott Morrison infamously brought a lump of coal into parliament saying “don’t be afraid, don’t be scared”. He is now prime minister so perhaps we should be scared. Last month he proposed government subsidy for the industry in the form of discounted loans for new baseload power generation — including for new plants fed by “clean coal” (an unviable nonsense that really should be labelled for what it is – “slightly cleaner coal“).
Sadly it is not just Morrison. Labor has been ambiguous when it comes to dealing with coal. Bill Shorten said their decision on Adani would be made on the “best science available“. It is not clear what that science is if it not the IPCC unambiguously saying coal was cooking the planet. The best Big Coal’s authors can see is making the shift “will have to come from citizens making it clear that Big Coal’s time is up.” Over four in five of Australians now believe that, but it will be easier to prosecute this case in Melbourne than Mackay. The mercury is rising, but does the Mercury care?