Prime Minister Malcolm Turnbull wants a ‘clear-eyed, cool-headed, rational’ approach to coal. Photo: Andrew Meares Train of thought: what’s the future of coal? Photo: Glenn Hunt
Brown-coal fired power plant in Victoria’s La Trobe Valley. Photo: Paul Jones
The young woman leading the energy revolution
This week Prime Minister Malcolm Turnbull said that when it came to coal, it was “important to take the ideology out – just approach it in a very clear-eyed, cool-headed, rational way”.
The PM’s comments were made in response to a call by 61 leading ns for an international halt to new coal mines and mine expansions.
The signatories included Nobel-winning scientist Peter Doherty and former Reserve Bank Governor Bernie Fraser, individuals who may not be unfamiliar with logic and rationality.
Mr Turnbull’s comments drew widespread applause from the mining industry, so it is likely that we’ll hear them echoed repeatedly between now and the Paris climate summit next month from both the PM and his colleagues.
Here are some of his comments and why the PM failed his own test:
Coal is a very important part…the largest single part of the global energy mix and likely to remain that way for a very long time. So that is not my forecast but the International Energy Agency’s forecast and many others.
True, coal vies with oil as the largest share of the energy mix, at 29 per cent versus oil’s 31 per cent stake, according the IEA’s 2014 World Energy Outlook.
But the IEA, like Nostradamus, says many things about the future.
In its Energy and Climate Change report released in June, the agency proposes a peak in energy-related within five years in order to ensure global warming can be limited to 2 degrees above pre-industrial levels (we are about half way).
“In the Bridge Scenario, coal use peaks before 2020 and then declines while oil demand rises to 2020 and then plateaus,” the agency says.
That prospect doesn’t point to the need for a lot of new coal mines. Opening up the giant Galilee coal province in Queensland could raise the amount of internationally traded coal by as much as 273 million tonnes if all 10 projects got developed, according to Tim Buckley, a former Citi analyst and now director of the Institute for Energy Economics and Financial Analysis.
Not taking action to curb coal and other fossil fuels would leave the world on a course to 3.6 degrees of warming. Yes, that is also an IEA forecast, but to avoid that fate would require the entire world becoming “carbon neutral” – with emissions countered by storage – by 2040.
“Since emissions are not going to drop suddenly to zero once this point is reached, it is clear that the 2-degrees objective requires urgent action to steer the energy system on to a safer path,” the IEA said in its outlook report.
I don’t agree with the idea of a moratorium on exploiting coal…If stopped exporting coal, the countries to which we export it would simply buy it from somewhere else.
Actually, very few groups demand that every bit of the black rock has to be left in the ground. The call is for an end to new coal mines or the expansion of them – at home and abroad.
If, as the IEA calls for, coal use peaks with a few years, implying that the issue won’t just be a matter of buying the fuel from elsewhere.
But let’s entertain the prospect of an export halt by – would that make a difference to prices?
Well, last year accounted for 186 million tonnes of the 310 million tonnes of internationally traded coking coal used in steel making – that’s 60 per cent, according the government’s own figures.
Even for thermal coal used in power stations – which is really the fuel substitution issue at stake – ‘s 201 million tonnes of coal exported in 2014 amounted to just under one-fifth of the globally traded commodity.
Mr Buckley says that as a major player in global coal markets, ‘s actions – even to cap exports – would have a big impact on markets.
“It’s just nonsensical from an economics point of view, what Turnbull was saying,” Mr Buckley said.
So if were to stop all of its coal exports … it would not reduce global emissions one iota. In fact, arguably it would increase them because our coal, by and large, is cleaner than the coal in many other countries.
Two problems here.
As above, ‘s actions to limit, cut or even ban exports – even taken alone – would likely lift the price of coal.
Alternative fuels almost always produce fewer emissions, especially if the source is renewable, such as solar, wind and hydro, all of which have virtually zero emissions once the plants are installed. The higher the price of coal, the more “iotas” of emissions reduction.
But how clean is n coal?
The Newcastle thermal benchmark is typically cleaner than Indian domestic coal. The energy content per tonne of the former is 6000 kilocalories per tonne, with a 12-14 ash content, Mr Buckley notes. By contrast, the Indian variety typically generates 4400 kcal with a 20-45 ash content.
However, the big Galilee coal province – which a focus of much of the opposition in to new coal mines – has a relatively poor quality.
According to details released to Mr Buckley by Adani, the proposed developer of the giant Carmichael mine earmarked to supply India, the average energy content will be 4950 kcal, with a 25-30 per cent ash content.
Once the coal has been dug up and carted hundreds of kilometres to the coast and shipped thousands more to India, the Carmichael coal will struggle to be cleaner than whatever it displaced.
People talk about different forms of energy and often, and some people talk about it in an ideological way, as though one type of coal is better or worse than wind which is better or worse than solar which is better or worse than nuclear power.
These are all things. They don’t have any moral characteristics. They are things. They have certain physical characteristics and financial characteristics.
One this point, Mr Turnbull is closer to the mark, although his comments do contradict his own Resources Minister Josh Frydenberg, who argued earlier this month had a “strong moral case” to proceed with the $16 billion Carmichael mine.
Mr Frydenberg’s argument is that the coal would help ease the energy poverty of hundreds of millions of Indians by lowering the cost of electricity to a point where more of them could afford to join the grid for the first time.
If morality were the driver for such a worthwhile goal, then why not take a smaller profit to start with by lowering the coal price? Or perhaps donate our royalties to ensure more poor people could enjoy our coal (rather than slashing our aid budgets)?
But back to Mr Turnbull. Does every thing really have a value solely for its “physical and financial characteristics”?
Does it matter whether we exclude the cost of burning fossil fuels from its price, given the impact we know the greenhouse gas will have on global warming?
We know from Mr Turnbull’s turbulent time as Opposition Leader that he used to think a carbon price was a good thing. (The US government has made this stab at estimating the social cost of a tonne of CO2.)
Does it matter that those most likely to bear the brunt of the impacts of the more extreme weather we can count on from climate change are the very people whom we purport to be so concerned about when it comes to “energy poverty”?
Finally, what price, say, does a species made extinct by our actions have, or perhaps that is an “ideological” question.