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Coal boom’s imminent end; Turnbull minor on miners

30 April 2022

9:00 AM

30 April 2022

9:00 AM

With the election only three weeks away, where are the major parties’ campaigns on ‘Our greatest moral challenge’ – climate change? Are the pacifist/pro-drugs/economically illiterate Greens along with their phony independent Climate200 cohort, the only proselytisers seeking to be elected in order to save us all from climate doom – to the benefit of their munificent campaign funder with his financial involvement in renewable energy and a vested interest in attacking fossil fuels? Ever since last November when the Prime Minister astutely joined his fellow international hypocrites by making the patently unachievable commitment to reach zero greenhouse gas emissions by 2050, Labor’s prospects of fighting yet another scare campaign on global warming was thereby killed off. Substituting some rumblings about tougher targeting by 2030 does not carry the drama of a conflict over net zero. So climate is largely off the main parties’ election agendas, despite the left-oriented The Conversation describing the shorter-term 2030 emissions target as ‘the crucial indicator’. But don’t expect the difference between the Coalition sticking to its 26-28 per cent reduction from 2005 levels by 2030, while Labor aims for a 43 per cent cut, to feature prominently in their election manifestos. The Greens and phoney ‘teal independents’ want more, and would force a minority government to provide it.

As last week’s The Conversation lamented, this federal election seems to be less about climate change than any in the past 15 years. ‘Unlike in 2010, 2013 and 2016 – when governments were elected and leaders deposed over climate policy – and in 2019 when climate change determined how about 13 per cent of Australians voted, this time there’s no brutal contest over the issue. There are no calls for emissions trading schemes, no Greens cavalcade into Queensland’s coal-mining hinterland, and no Labor prevarication over the Adani coal mine…. And, tellingly, neither major party mentions fossil fuel exports – the overwhelming and growing contributor to Australia’s global carbon footprint’.

How disappointing for Greta and her Australian acolytes that, despite their claims that climate change remains a defining issue for voters (particularly in key electorates suffering from fires and floods), this election is shaping up as a contest over other issues like national security, leadership, economic competence, jobs and the cost of living. But they seek consolation in the belief that whoever wins on 21 May will confront ‘growing pressure for tougher climate targets and action – from the electorate, our international peers and the rising number of climate-related legal challenges’.

But how accurate is this claim that public anxiety over future climate damage is mounting? It is hardly a representative cross-section of Australian opinion that 62 per cent of the 9,000 readers of The Conversation who responded to its ‘Set The Agenda’ survey have nominated climate change as their top election issue. This prompted the unsustainable conclusion that ‘Australian voters could fairly wonder if the major parties are courting us at all with the election rhetoric being far removed from what The Conversation’s readers say matters to them’. There may be more substance in a Lowy Institute poll, where 60 per cent of Australians now say global warming is a significant and pressing problem and 55 per cent believe the government’s energy policy should prioritise ‘reducing carbon emissions’ – up eight points since 2019.

While all fossil fuels are in the climate firing line, coal remains the current major target. And in the unlikely event that this month’s wishful-thinking academic study commissioned by rich-lister anti-coal investor in renewables Alex Turnbull (the former PM’s son) is right, coal’s emissions will soon be massively diminished with its forecast ‘imminent’ end of Australia’s current coal export boom. In stark contrast with official forecasts of continuing demand, but at normal rather than crisis boom prices, the Turnbull study asserts that ‘Coal will be on the way down. We need to foster alternative economic futures’ – presumably like the renewables in which Alex Turnbull invests.

This disaster for coal (and for the state and federal governments that rely on its revenues) depends on the accuracy of forecasts of China’s potential to severely cut imports. ‘Our findings are clear; Beijing’s plans for rapid decarbonisation and energy security signal the end for Australia’s current coal export boom. And this isn’t going to happen far off into the future; it is imminent….If China sticks to its current climate pledges, thermal coal imports will drop by a quarter within three years’. And on the energy security front, the world’s top buyer of coal will increasingly be able to supply its power and steel plants with domestically mined coal at competitive costs, making China less dependent on volatile markets – and making it easier to impose politically motivated import restrictions on suppliers from what it considers unfriendly countries. This would mean Australian thermal exports (if un-banned) could fall by 20 per cent from pre-ban 2019 to 2025, and coking exports would go down by one third as China’s current sources, like leading thermal coal supplier Indonesia, shift back to compete against Australia in the global market. But this analysis ignores the higher-quality, less-polluting market advantage of Australian coal.

The reality is that China now accounts for less than five per cent of Australia’s coal exports, with Japan taking more than 40 per cent, South Korea 15 per cent, Taiwan 14 per cent, and India a rapidly rising 10 per cent. As Stephen Galilee of the NSW Mining Council responded, ‘China is not currently an export destination of any note for NSW coal producers (who account for about 40 per cent of Australia’s total), yet our overall coal export volumes have continued at near record levels due to strong ongoing demand in established markets, and new export opportunities. NSW exports high quality coal to nearly 20 countries, but has not actually exported coal to China since mid-2020.’

To meet this demand (and despite the anti-coal campaign that denies access to most capital markets), significant expansion of Australian coal mining is underway. This is not only in Queensland’s controversial Galilee basin where Adani’s successful lead (despite years of climate obstructionism) has prompted three prospective major mine developments, but also greenfield projects in the Bowen basin and extensions in NSW which Labor leader Albanese has agreed should proceed provided appropriate environmental standards are met – but which the Greens and the phonies promise to block.

This month’s update by the government’s chief economist also forecasts an end to booming coal prices but a continuation of strong export volumes in a far more sanguine view of Australia’s fossil fuel future. For metallurgical coal, rising export volumes are forecast to reach 184 million tonnes by 2026-27, up 13 million tonnes from last financial year due to new mines in NSW and Queensland – but at less than half this year’s historic high prices following Russia’s invasion of Ukraine. Thermal coal exports are expected to be restored from Covid lows up to 207 million tonnes. So once again, coal’s funeral notices are premature.

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