Arguments used against a ban on new coal mines or a coal phase-out in Australia

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{{#badges: CoalSwarm|Navbar-Australiacoal}}At the launch of a report by the Australian government's Climate Commission, the Deputy Leader of the Australian Greens, Christine Milne argued that "the time for coal is over and the time for gas is extremely limited."[1] "(Coal seam gas) is not an industry we should be beginning at a time when we need to be getting away from investment in fossil fuels," she said. "In terms of coal mines, the Greens have said very clearly no new coal mines, no extension of existing coal mines. Let's invest in renewables."[2]

In response to her a comments, a range of industry and political leaders were prompted to set out why they supported the continued expansion of the coal industry.

The arguments in defence of maintaining/expanding coal mining in Australia

  • The CEO of the NSW Minerals Council, Nikki Williams told the Sydney Morning Herald in 2006 that "withdrawing our coal exports to crunch supply in the hope of encouraging the use of alternative sources of energy wouldn't even rate a hiccup" Willaims told the Sydney Morning Herald in late 2006. "World coal consumption is roughly 5 billion of tonnes per year. Our state exports around 89 million tonnes per year, so it is a drop in the ocean compared to the global demand and consumption. It's important to point out that when the industry says, 'If we don't dig it up, someone else will', it is not to ignore the problem or our role in the solution. What we're saying is, 'Look, what we do is not perfect but we're working on the solution. In the meantime we're keeping the lights on, driving the economy, creating jobs and attracting investment to our state."[3] (Williams is now the CEO of the Australian Coal Association).
  • The Minister for Resources, Martin Ferguson said in an interview with ABC Radio that "the reality of the international economy is that it is growing, hence there is a growing demand for energy. Australia is well positioned, not only for the continued export of coal but also, I might say, an expanded opportunity in LNG, including coal-seam methane LNG exports." Asked what the implications were of the emissions from Australian , Ferguson argued Australian coal was cleaner than alternatives. "Well firstly on coal, Australian coal, especially from Queensland and New South Wales, which are export corridors, is regarded as relatively clean coal. In places such as China, where the demand is growing they are also building new coal fired power stations, which are far more efficient from an emissions point of view. Then I go to the question of LNG; for every tonne of LNG produced in Australia, we actually reduce emissions in China by four tonnes in terms of CO2 emissions."[4]
  • Prime Minister Julia Gillard stated, at the opening of the beginning of construction of Santos's Curtis Island LNG processing plant two days later that "there was obviously some statements made earlier in the week by Senator Christine Milne about the future of the coal industry, the Government disagrees with those statements, we made that disagreement very, very clear through the relevant Minister, Martin Ferguson, and subsequent to the Government making its reaction to those comments very, very clear, the Premier made her statements."
"So of course we are a country that will have a future with coal, we are country that will have a future with coal seam gas and we’re seeing part of that future here today. We will work to get the balance right including the environmental balance, and this project here today is a great example of that. An approval given by the Federal Government, 300 conditions, and Santos and its partners determined to do the right thing by the environment and the right thing by this local community. So this is a sustainable project in every way at every level."[5]
  • The Premier of Queensland, Anna Bligh, told ABC News that "the Greens in Canberra we are going to continue to approve this industry because Queensland needs it," she said. "That's why we have to have cleaner versions of coal, it's why we have to have transition fuel like gas, and it's why we need to invest in renewables. Radical extreme ideas like shutting down a whole industry overnight doesn't help to a sensible debate."[6]
In an interview with The Australian, Bligh criticised the idea of constraints on the coal industry. "Of course, coal is a finite resource and we need to realistically plan and invest in other forms of energy, including gas and renewables, as part of fuelling our future," Ms Bligh said. "But a shut-down of the coal and gas industries would be a social and economic catastrophe for Queensland and Australia, costing thousands of jobs, halting investment and closing down whole communities. The ripple effect on downstream supply chains and value-add industries in mining services, technology and manufacturing would be devastating," Bligh said.[7] "While Queensland coal is already a cleaner source of energy than coal from other states and countries, LNG is fast becoming an important, transitional fuel as domestic and international markets look for viable alternatives," she said.[7]
The day after Gillard was asked by a journalist at a press conference with Bligh about the Premier's request not to support the Greens "radical" position on coal mines. After Gillard responded and then turned to Bligh, the Premier said that "my comments were in relation to the proposals from Christine Milne that we would not approve any further coalmines and further that we would shut down the LNG industry. My view: just simply preposterous, they would spell economic and social catastrophe for Queensland and the national economy and our Government will be actively pursuing the LNG industry because it is a cleaner form of energy, but we will continue to work with the coal industry because frankly coal is going to be a part of the world’s energy future for some time to come. The transition is important, starting the transition now is important, but you can’t have a transition of one day, you have a transition of decades and you plan it and you get it right."[5]
  • Queensland National Party Senator, Barnaby Joyce, said that "you can close down the mining industry, but the reality is that the nation would go broke," he said. "We like to romanticise the complexities and sinews of our economy but we really have a very simple business plan - we survive on the charges we raise to allow people to dig up black rocks and red rocks: coal and iron ore." The Australian reported "Senator Joyce said if the Greens wanted to phase out coal, they should nominate which consumer goods imported from overseas they would like to surrender."[7]
  • Tony Maher, the president of the mining division of the Construction Forestry Mining and Energy Union told The Australian that the proposed ban on new coal mines was "a pathetically shallow analysis that is unworthy of any serious player or party". The Australian reported that "Mr Maher said all serious industry projections, including those of the International Energy Agency, had Australia's coal industry growing over coming decades and forming a vital part of world electricity generation until the middle of the century. He said that over time advanced nations would increase their use of electricity produced from renewable sources relative to their coal-fired power use. But 'poor countries struggling to feed themselves' would continue to use coal."[8]
  • Hugh Tobin, Director - North Australia Project for the Institute of Public Affairs stated in a media release that "preventing new coal mines from opening would be catastrophic for the Australian economy, particularly in the North. In New South Wales, Queensland and Western Australia there are 50 coal projects due to start in the next three years alone," he said. "Coal is the top export for both New South Wales and Queensland. It contributes $8.4 billion to the NSW economy and $20.5 billion to the Queensland economy. A few wind turbines aren't going to replace the coal industry in terms of jobs or energy output anytime soon. The Greens also want to stop the development of the coal seam gas industry. This industry represents a huge opportunity for many regional Australian communities which deserve the chance to benefit from this resource." (The IPA states that, as psrt of its North Australia Project, it is "working with Australians for Northern Development and Economic Vision (ANDEV) to develop policies for a more competitive Northern Australia". Tobin stated in the media release that the federal government "should put in place a Special Economic Zone in Northern Australia. A low tax, low regulation zone would drive continued long term investment in the Australian resource industry."[9]
  • With a little over half of Australia's coal exports being metallurgical coal, The Australian reporter Matt Chambers wrote that "thermal coal is generally targeted when cutbacks to exports are raised because there is no large-scale alternative to using coking coal to make steel."[10]
  • Chambers then reported the head of Queensland University's mining energy division, Peter Knights as arguing that slowing the growth of Australian thermal coal exports 'could increase carbon emissions through extra processing of poorer-quality coals'. "If Australia was to wind down exports of thermal coal, China and other countries would need to look to substitute those coal supplies and they would look at countries such as Indonesia, Mongolia and Russia, but those coals are not as highly ranked as Australia's," he said.[10] Chambers wrote "Indonesian coal that could replace lost Australian production has about 70 per cent of the energy value of thermal coal exported from Newcastle, meaning extra would have to be mined, processed and shipped to provide the same amount of power. Adding to this, Indonesian coal has three times the moisture content of Australian coal, so energy is wasted burning water off before the coal can be burned to release energy."[10]
  • Ralph Hillman, the executive director of the Australian Coal Association argued that "if you took Australia out of the market, you would drive up global coal prices enormously, and this would make a whole lot of marginal coal in China viable."[10] Hillman also argued that "Placing a carbon tax on coalmining operations when our major competitors don't does not make sense ... It will only serve to shift production and jobs offshore, with no impact on the amount of greenhouse gases emitted."[7]

The Queensland Resources Council, a mining industry lobby group, has also published a guide what what it considers the myths about the coal industry.[11] In its briefing note, the QRC lists and the most common myths and its responses as:

  • "Australia controls the word coal market": "Australia is the world's biggest coal exporter, as a consequence of passing just 4% of the world's coal production through its ports. Worldwide, coal is not traded extensively."
  • "Halting Australian coal exports will reduce greenhouse gas emissions": "Coal is mined in 70 other countries, meaning Australia’s exports would be replaced by other countries leading to no net reduction in emissions. The world has an estimated 150 years of coal supplies. Australia lies fifth in coal reserve rankings behind the United States, China, the Russian Federation and India. Global coal demand is forecast to rise 73% by 2030."
  • "Australian coal makes a large contribution to global greenhouse gas emissions": "Australian coal used overseas produces 1.3% of global greenhouse gas emissions, and is accounted for by the countries in which it is used."
  • "Coal is the largest source of greenhouse gas emissions": "The burning of coal for stationary electricity production accounts for 25% of global emissions and 33% in Australia, where coal-fired power stations produce 84% of the country’s electricity."
  • "Australia is a major greenhouse gas emitter": "Australia's produces approximately 1.4% of the world's greenhouse gas emissions."
  • "Most of Australia's coal is exported to China": "China ranks fifth as an export market for Australian coal, well behind Japan (44%). Asian economies account for just over 80% of Australian coal exports with other customers Europe (12%) and South America (5%). Around 3% of Australia's coal is exported to China."
  • "All Australia's coal is used for electricity production": "Sixty per cent of Australia's coal exports are used for steelmaking (metallurgical) and the remainder (thermal) for electricity production and other industrial purposes (eg cement)."
  • "Clean coal technology is unproven": "Commercial coal gasification power plants operate in the United States and Europe. Underground storage of CO2 for enhanced oil recovery is established technology in the United States, Africa and Norway. Australia is a world leader in developing, integrating and commercialising carbon capture and storage technology."

Australian Coal Association claims

The Australian Coal Association states on its website that "mining of black coal is one of Australia's most important industries, creating significant employment in regional Australia, fuel for low-cost electricity generation and steel-making, and is a vital source of export revenue. Australia is the world's biggest coal exporter, and black coal is Australia's largest export, worth more than $A50 billion in 2008-09 ... In addition to providing Australian consumers with affordable electricity, coal underpins the international competitiveness of the entire Australian economy, as well as being a major force driving the social and economic development of regional Australia."[12]

It also states that:

  • "Black coal remains Australia's largest commodity export, representing around 23 per cent of Australia's total exports of goods and services in 2008-09";[13]
  • "The coal industry is supported by a strong equipment and services sector. Australia has world-class expertise in design, construction and operation of mines, transport systems and loading facilities. It also has expertise in training, technical support and project management."[14]
  • "Coal mining operations in an area bring major flow-on benefits to all sectors of the community. Inevitably, the district's population increases and medical, shopping, sporting and entertainment facilities are enhanced. Additional jobs are created in ancillary industries like tyre and fuel suppliers and engineering works. Mining companies also contribute directly to improving road, rail and air services. The Australian coal industry is also a major education sponsor, spending millions of dollars each year on training, scholarships and educational programmes and is a generous contributor to community projects."[14]

Articles and resources

References

  1. Christine Milne, "Climate Commission report: We need to build zero carbon economy fast", Media Release, May 23rd, 2011.
  2. James Massola, "Greens call for ban on new coal mines as they negotiate with Labor over carbon price", The Australian, May 23, 2011.
  3. Wendy Frew, "King coal under siege", Sydney Morning Herald, December 2, 2006.
  4. Martin Ferguson, "ABC Newsradio Interview with Marius Benson", May 25, 2011.
  5. 5.0 5.1 Julia Gillard, "Transcript of joint press conference, Gladstone" Prime Minister of Australia's website, May 27, 2011.
  6. Chris O'Brien, "Greens' call to close down coal industry 'far-fetched'", ABC News, May 26, 2011.
  7. 7.0 7.1 7.2 7.3 Matthew Franklin, "Anna Bligh warns of 'radical' Greens", The Australian, May 26, 2011.
  8. Matthew Franklin, "Union attacks Greens over coal ban", The Australian, May 27, 2011.
  9. "Greens call to ban new coal mines would be catastrophic", Media Release, May 25, 2011.
  10. 10.0 10.1 10.2 10.3 Matt Chambers, "'Dirty coal' likely to fill supply hole if exports cease", The Australian, May 26, 2011.
  11. Queensland Resources Council, "Coal Myth-Busting", Queensland Resources Council, July 2008. (Pdf)
  12. Australian Coal Association, "The Australian Coal Industry", Australian Coal Association website, accessed June 2011.
  13. Australian Coal Association, "The Australian Coal Industry - Coal Exports", Australian Coal Association website, accessed June 2011.
  14. 14.0 14.1 Australian Coal Association"The Australian Coal Industry - Industry Overview", Australian Coal Association website, accessed June 2011.

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