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Coal / Adani

Background

In most countries, discussions about coal and renewable energy would be covered as part of a broader discussion about the environment but the Adani coal mine proposal (also referred to as the Carmichael mine) has taken on such a life of its own, and Scott Morrison has taken such a personal interest in promoting coal above all else, that it seems necessary to dedicate a specific page to understanding these issues.

My simple take on it is that, yet again, this has become an ideological battleground for the Coalition Government, where science and evidence are no longer used to inform policy because all they are thinking about is driving a wedge into the electorate in Queensland that will disadvantage the Labor Party at election time. They are not thinking about the long-term health of Australia - neither our economy nor our environment - but about their own short-term political interests. It is extremely frustrating.

 

Australia has a history of innovation. Our people had a role inventing WiFi, the bionic ear, the black box flight recorder and Google Maps!! But instead of focusing on encouraging innovations in renewable energy, the growth area of the future, our politicians are stuck in a self-interested political loop which advantages huge mining companies over long-term jobs in growth employment sectors.

Making sense of the Adani saga

 

The Carmichael Mine was first proposed back in 2010 and was supposed to run for 150 years, with this duration now reduced to 60 years. The process of getting approvals for the mine has been tortuous, not least because the mine risks inflicting huge environmental harm to surrounding land, waterways, flora and fauna, and underground water basins, while the coal it produces will substantially contribute to climate change emissions. Because of the risks it poses, environmental activists, as well as indigenous landholders have fought against the approval process for years.

 

Interestingly, since the mine was first proposed, the price for coal has dropped substantially, arguably making the mine economically unviable. Presumably on the basis of that analysis, 11 of the top 20 global backs that usually finance coal projects have refused to finance Adani. At home, Westpac, NAB and the Commonwealth Bank have also ruled out financing Adani. 

The Morrison Government alleges that support for Adani is all about jobs in Queensland, but estimates for the number of jobs to be created at the mine have been a major area of controversy, with numbers varying enormously; it appears the company may have lief about how many jobs will be created! In December 2014, the CEO of Adani Mining said the mine would create 10,000 jobs, but in the Queensland Land Court, economist Jerome Fahrer from ACIL Allen consulting, Adani's expert witness said the project would create less than 1,500 jobs. In 2016, the CEO of Mine Operations, JJ Jakanaraj stated that, "We will be utilizing at least 45, 400-tonne driverless trucks. All the vehicles will be capable of automation. When we ramp up the mine, everything will be autonomous from mine to port. In our eyes, this is the mine of the future" A June 2019 estimate stated the number of ongoing, operational jobs at the mine would be "between 800 and 1,500."

Transitioning from coal to renewables

The rest of the world is increasingly recognising that coal is no longer the future of energy. Germany has pledged to close all of its 84 coal plants, American recently generated more power from renewables than coal and India is moving away from coal power plants towards clean-green technology.

 

In Australia however, political ideology has held environmental science hostage as the debate about coal vs renewables has become another battleground of our so-called culture wars. It began with Abbott becoming Opposition leader after a fight within the Coalition of what climate change policy to pursue, with Abbott's win leading to the Coalition blocking active support for environmental action ever since. The low watermark of Australia's love affair with coal was now-PM Morrison carrying a lump of coal into Parliament.

It is true that we make a lot of our export dollars from coal currently. However, analysis indicates that coal production in Australia is likely to be on a long term declining trajectory. At the same time, research shows that is now cheaper to build a new wind farm than to keep a coal plant running

Declining returns for coal does not need to be a problem however, if Australia develops a more deliberate coal transition plan. Australia is already recognised as a country ripe for harnessing renewable technologies such as wind and solar power. If we want to realistically look to the future, we need to develop better policies to grow the market for renewables, with a view to becoming a major global exporter of the technology, and eventually renewable energy itself.

At the same time, we need to put major funding into transition planning, including supporting coal workers with retraining and active job support, as part of a broader strategy to ensure our workforce is prepared to engage in the industries of the future. This is already being done elsewhere. For example, the European Commission’s coal and carbon-intensive regions in transition initiative is investing funds in 13 coal regions. In Germany, the multi-stakeholder German Coal Commission has recommended a funding package of €40 billion to support Germany's coal regions, with legislation due May 2019. The Spanish Government has established a €250 million fund , which includes support for Spanish workers, economic diversification and environmental restoration.

Interestingly, in October 2016, the Senate Standing Committees on Environment and Communications held an Inquiry into the Retirement of Coal Fired Power Stations. That Inquiry's final report specifically identified options for managing the transition away from coal fired power stations, including the need for a national transition plan and establishment of a statutory authority to manage the transition process. The report was chaired by the Greens, with Coalition Senators producing a dissenting report, and its recommendations were never acted upon by the Morrison Government.  However, the still remain very valid and are highly recommended reading if you want to discuss practical action that the Government should take in coming years. 

Additional resources / reading