Coal Industry – Wrong Way, Go Back!

September 29, 2015May 11, 2018 itdunlop

Coal producers and lobbyists are yet again promoting “clean coal” as the justification for continued expansion of energy coal as we make the inevitable transition to the low-carbon economy. Conscious that they can no longer credibly reject the evidence of accelerating climate change, the Minerals Council of Australia (MCA) and the World Coal Association (WCA) claim that the latest “clean coal” technologies, in the form of lower emission coal plants and carbon capture and storage (CCS), are an effective response.

Last week, the MCA released a paper by the International Energy Agency’s (IEA) Clean Coal Centre contending that new high efficiency “ultra-supercritical” coal plants in 10 countries in South and East Asia, including India and China, could reduce carbon dioxide emissions by 1.1 billion tonnes per annum compared to less efficient “subcritical” coal plants. They also heralded the opening of a new coal-fired power generation CCS plant in Saskatchewan as evidence that commercial scale CCS is now available.

Whilst such technological advances are welcome, that argument displays a fundamental misunderstanding of the climate science, and is being economical with the truth to put it mildly.

The full IEA picture emphasises that to stay below 2°C of global warming, we can’t afford to add any additional coal plants to the existing stock, no matter how efficient they are, unless their emissions can be sequestered. Certainly we need to replace or convert older, dirtier plants to the new cleaner technologies, but no new ones. Every new unabated coal plant locks in decades of additional coal burning and carbon dioxide emissions that our planet cannot afford.

In the IEA’s scenario to meet the 2°C limit, by 2040 there is room for only 780 GW of unabated coal power generation, and all of this must be the most efficient ultra-supercritical coal plants. The size of the world’s current coal fleet is 1900 GW, with an additional 300 GW under construction. Therefore even if not another single additional coal plant was built from today, we still need to retire two-thirds of the world’s current coal fleet by 2040 in order to stay within 2°C.

CCS is presented as the solution to overcome this constraint and allow unbridled coal expansion. It is not rocket science; it has been done in the oil industry for decades, reinjecting carbon dioxide produced with oil and gas back into the geological formations from whence it came. However the global storage capacity in depleted oil and gas reservoirs is limited and they are rarely in close proximity to coal power generators. If other geological storage structures have to be used, and the carbon dioxide transported any distance, storage security, technical difficulties and costs escalate dramatically which is why progress has been slow and industry has been reluctant to invest strongly in its development.

Expert analysis suggests that to sequester around a fifth of global power generation emissions would require the creation of an industry far larger than today’s world oil industry; implying the construction of more than 3000 plants within the next 20 years to have any chance of making a realistic contribution to emissions reduction. It is not going to happen, not least because the MCA and WCA have continually undermined sensible efforts to introduce a price on carbon pollution, thereby weakening the incentive to develop CCS.

Despite decades of rhetoric, globally we have only the one coal power CCS operation in Saskatchewan and even that is sequestering its emissions in a depleted gas reservoir. The project cost $1.5 billion for a mere 110 MW of output. A study by Saskatchewan Community Wind found that investment in wind power instead of the CCS plant could have saved ratepayers more than $1 billion. CCS will be viable in limited, specific circumstances and should be encouraged where that is the case, but it is never going to contribute substantially to the emergency reduction of global emissions now required. The industry should stop pretending otherwise.

Commitments made so far by countries in the lead-up to the December Paris climate conference show global emissions continuing to grow to 2030, albeit at a slower rate than in the past, in stark contrast to the rapid reduction required to stay below 2°C. Yet dangerous climate change is already happening at the 1.0°C increase we are experiencing today. The refugee crisis engulfing Europe is fundamentally climate change driven, triggered over the last decade by the most severe drought in recorded history in and around Syria. India, supposedly the great market opportunity for Australian coal expansion, has experienced unprecedented climate change-related heat extremes in recent years and changes to its critical monsoon system. These are precursors of far worse to come unless emissions are reduced fast.

The coal industry justifies expansion on the basis of demand supposedly “forecast” under an IEA scenario which assumes only limited change from “business-as-usual”. As the IEA themselves put it, this cannot be allowed to happen: it would be a world where temperature increases by around 4°C on average, with greater extremes regionally, a world where economic activity as we know it ceases as global population rapidly declines.

In short, the world would be toast. Australia, as the hottest, driest continent on Earth, would be toasted first. Coal leaders need to rein in the MCA and WCA, and start restructuring their companies, and retraining their workforce for the real opportunities the low-carbon world opens up.

Ian Dunlop was formerly an international oil, gas and coal industry executive, chair of the Australian Coal Association and CEO of the Australian Institute of Company Directors. He is a Member of the Club of Rome.

An edited version of this article appeared in the Melbourne Age on 25th September 2015.

Coal – The Captain’s Call & It’s Catastrophic Implications

August 7, 2015May 11, 2018 itdunlop

The last few days have demonstrated just how far out of touch the Australian media and political incumbency are from critical climate change events happening around the world.

The Australian recently launched yet another tirade against supposed bias in the ABC’s handling of climate change, followed up by a stern Editorial lecture (Media Watch fails abjectly as a guardian of standards, 4^th August 2015). Pretty rich from an organization which supposedly accepts the climate science and the need for urgent action, but spends its time trawling the literature for the slightest micro evidence that climate change is either not happening, or is of far less concern than the mainstream science is indicating. As well as providing an ever-open platform for absolute climate deniers to sow further disinformation and obfuscation, based on no science or hard evidence whatsoever, disrupting the development of sensible climate policy.

The Australian Financial Review subsequently condemned “eco-activists” for the costs they are supposedly inflicting on the Australian community (Eco-activism is a major cost to the community, 6th August 2015) after the courts overturned Federal Government approval of the Carmichael Mine in the Galilee Basin. Instead of condemnation, these activists should be congratulated for their fiscal responsibility in trying prevent substantial economic damage and wasted assets, which will be the outcome if the Galilee Basin coal developments are allowed to proceed.

Predictably we then had the Prime Minister’s Captain’s Call. Coal, we are told yet again, is essential for the future of humanity, and for the alleviation of poverty in countries like India. Every other consideration must now be subjugated to the interests of these major projects proceeding. Not just in the Galilee Basin, but also the Shenhua Watermark mine in the Liverpool Plains, coal seam gas everywhere and a host of others.

The preservation of biodiversity, such as the snakes and skinks in Galilee is important, but the real issue is climate change. Clearly the incumbency does not understand the implications of the latest climate science and evidence of climate change impact around the world.

Climate change is happening far faster and more extensively than officially acknowledged, largely driven by human carbon emissions. We are experiencing substantial economic and social disruption at the 1^oC warming which has already occurred relative to pre-industrial levels, let alone the additional 1^oC to which we are probably committed by virtue of historic emissions. The official limit of 2^oC warming is not safe, it is now highly dangerous.

If the Galilee Basin and Watermark projects proceed, it will have catastrophic climate consequences, akin to other large high-carbon expansions such as the Canadian Tar Sands. Quite simply, as the IMF, IEA, World Bank and other authorities state, these developments cannot be allowed to happen.

Poverty, far from being alleviated by them, will be created. Have the incumbency “experts” thought about the implications of the extreme events happening right now on the Indian Subcontinent – unprecedented heat last week, unprecedented rainfall now, to which climate change is contributing significantly? Not to mention extensive damage in North America from extreme drought and fires as the El Nino intensifies, as we will no doubt experience shortly. All occurring at only 1^oC global warming.

Those who lead economic debate in this country need to wake up to the fact that climate change will be the factor having the greatest impact on the Australian economy and society from now, to the point that it will fundamentally change our economic and business models. It should be at the top of the agenda for the forthcoming National Reform Summit being promoted by both newspapers, but it is a fair bet it will not even feature.

This Captain’s Call, if the Prime Minister gets his way, will be the biggest economic disaster in Australia’s history and will fundamentally undermine our National Security. Sounder heads must prevail.

An edited version of this article appeared in Renew Economy on 7^th August 2015: http://reneweconomy.com.au/2015/coal-the-captains-call-and-its-catastrophic-implications-88298

The Australian Elites Have Failed Us On Climate Change

June 21, 2015May 11, 2018 itdunlop

The recent utterances of Maurice Newman, Chair of the Prime Minister’s Business Advisory Council, suggesting that climate change is nothing more than an attempt to establish “a new world order under the UN”, engendered some hilarity. They should not, because his comments highlight a fundamental failure of leadership on the part of Australia’s elites which is potentially disastrous.

The Business Advisory Council comprises some of the great and the good of Australia: Chairs of our leading mining, manufacturing, communications and construction companies and banks, ex-heads of the Prime Minister’s Department, Treasury and the Productivity Commission.

Whilst Maurice Newman’s writing is prefaced with the disclaimer that his views are his own, they clearly carry great weight in setting government policy. Whether it be the removal of carbon pricing, the pretence that Direct Action is serious climate policy, an ideological anti-science agenda reminiscent of the Dark Ages, or the charade of cutting the RET to reduce consumer costs when its own advice demonstrated exactly the opposite, the Federal Government’s actions have made it abundantly clear that it has no intention of taking climate change seriously.

In the real world, human-induced climate change is accelerating. It presents risks that humanity has never previously experienced, as evidence mounts that extremely dangerous “tipping points” in the Arctic, Antarctic, the Oceans and elsewhere are being activated, probably irreversibly. Current government policies would lead to a temperature increase of 4-6⁰C before 2100, a world where population would drop from 7 billion today toward 1 billion or less. Even meeting the “official” target of a 2⁰C temperature increase would halt population growth.

Due to lag in the climate system, the dangerous warming impact of fossil-fuel investments made today only becomes fully evident decades hence. Nonetheless, governments, investors and business are irresponsibly accelerating such investment, ignoring the risks. Waiting for catastrophe to happen before acting, which is in effect what Maurice Newman, and even “lukewarmers” such as Dick Warburton, Bjorn Lomborg and Nigel Lawson advocate, means that it is too late to act. It is precisely this scenario that sensible risk management is designed to avoid. Indeed, given the implications of passing “tipping points”, even greater precautions should be taken.

What are we to make then, of the deathly silence from other members of the PM’s Business Advisory Council in response to Newman’s very public stance? For example: Jac Nasser, chair of BHP Billiton which claims global leadership on climate change, Catherine Livingstone, former chair of CSIRO, one of the world’s leading climate change research organisations, now chair of the Business Council of Australia, Michael Chaney, former chair of NAB, another corporate sustainability leader, now chair of Wesfarmers. They will be well aware of climate risk; if not, as corporate directors they should be.

Perhaps there are whispered conversations in the corridors of power suggesting that Maurice might be wrong; if so they are singularly ineffective. The only conclusion is that the Council is comfortable with the charade of current climate policy despite the glaring contradiction with individual member’s corporate views. If not, given the risk we face, and the missed opportunities, they should be saying so, loudly and publicly; for disclaimer notwithstanding, the public perception is that Maurice Newman represents Australian business’s attitude to climate change.

This is reinforced by the fact that not a single Chair or CEO of a major company, bank or investment manager has spoken out against the Federal Government’s blatant climate denialism, and in particular, the government’s undermining of the new low-carbon industries on which Australia’s future depends. No comment on the lack of any strategic vision in the flood of Green and White papers on energy, defence, agriculture, immigration and infrastructure, all of which totally ignore the single biggest issue which should be driving policy – climate change.

Not that our elites shrink from taking a public position; witness the speed and anger of the big iron ore miners when our free market government proposed a Senate inquiry to explain how the free market works. A pity the same energy is not devoted to demanding sensible climate policy.

In 2008, with the Global Financial Crisis rapidly accelerating, Queen Elizabeth, in discussion with experts at the London School of Economics asked: “Why did no one foresee the timing, extent and severity of the GFC ?”. After some time, the British Academy responded that “A psychology of denial gripped the financial and political world, —— The failure of the collective imagination of many bright people to understand the risks to the system as a whole.”

Just so with climate change, as the same denial grips the elite of Australia, only the risks now are far greater. Quite simply, the future of humanity.

Remuneration is a major factor: “It is hard to get a man to understand a problem if his salary depends upon him not understanding it”. At present, our elites are being paid an obscene amount of money to, in effect, destroy the planet. They now need to lead and publicly take up the climate change challenge. We have solutions, but not if the elites hide in the shadow of Maurice Newman. Our grandchildren deserve better.

An edited version of this article appeared in the Melbourne”Age” on 21st June 2015: http://www.theage.com.au/comment/the-australian-elites-have-fundamentally-failed-us-on-climate-change-20150619-ghsb9d.html