Monthly Archives: April 2013

The latest Coal news

Carbon bubble makes Australia’s coal industry ripe ‘for financial implosion’

Much of the nation’s coal reserves will be worthless if world’s governments fulfil pledge to cap emissions, warns report

Australia’s huge coal industry is a speculative bubble ripe for financial implosion if the world’s governments fulfil their agreement to act on climate change, according to a new report. The warning that much of the nation’s coal reserves will become worthless as the world hits carbon emission limits comes after banking giant Citi also warned Australian investors that fossil fuel companies could do little to avoid the future loss of value.

Australia is already the globe’s biggest coal exporter and “mega-mine” plans in Queensland for more extraction are identified as the world’s second biggest “carbon bomb” threatening runaway global warming.

“Investments in Australian coal rest on a speculative bubble of climate denial, indifference or dreaming,” said John Connor, one of the new report’s authors and CEO of The Climate Institute, an independent research organisation based in Sydney. “Investors, governments and even some coal companies say they take climate change seriously, but this report shows they do not or are taking risky gambles.”

James Leaton, at thinktank Carbon Tracker and also another of the report’s authors, said: “Investors need to challenge the assumption that coal demand will continue to rise in China and elsewhere, otherwise billions of dollars of taxpayer, superannuation and shareholder funds will be wasted in assets linked to unburnable carbon.”

Carbon Tracker’s recent global report found that at least two-thirds of existing fossil fuel reserves will have to remain underground if the world is to meet existing internationally agreed targets to avoid the threshold for “dangerous” climate change. The new report shows Australian coal reserves owned by listed companies alone are equivalent to 25% of the global carbon budget for the fuel to 2050.

However, far from cutting back on exploration for new coal reserves, Australian listed companies spent AU$6bn on developing new deposits. If only half of potential future reserves were exploited, Australian coal would use up 75% of the global carbon budget for the fuel.

Earlier in April, Citi banking group issued a warning to investors in fossil fuel companies. “We see limited potential for engagement to alter the outcome in this case,” concluded its report. “If the unburnable carbon [scenario] does occur – even with carbon capture and storage technology – it is difficult to see how the value of fossil fuel reserves can be maintained.”

Leaton said China has indicated its coal use will peak in the next five years, but that this had not been priced by markets. “I don’t know why the market does not believe China. When it says it is going to do something, it usually does.” Yet Australia is banking on selling coal to China: “That doesn’t add up.”

The report, called “Australia’s carbon bubble”, also warns that the nation’s politicians will have little control over events: “Tokyo and London have high exposure to Australian proven coal reserves. The decisions in overseas markets that will leave Australian assets stranded are beyond any Australian political control.”

It also warned that as coal prices fell in future, Australia’s high costs of production leave its coal less competitive.

A separate report, also published on Monday, highlighted the opportunities available to Australia in joining other nations with big energy resources in transforming to a low-carbon economy.

“There are a lot of opportunities for Australia but the world is changing quickly and we need to be prepared,” said Prof Tim Flannery, of the independent Climate Commission. “We are the 15th largest emitter in the world, larger than 180 other countries. We are more influential than most of us think.”

“China is accelerating action. After years of strong growth in coal use, this has begun to level off. They have an impressive array of [climate] actions that will drive global momentum in the future,” he said. “Renewable energy is surging globally with solar PV capacity increasing 42% and wind 21% in just one year. With so much global momentum this is clearly the beginning of the clean energy era.” © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Australian minister: I never saw advice against coal port at Great Barrier Reef

Campaigners say Tony Burke should have ruled out Fitzroy Terminal as soon as government received warnings

Australia’s environment minister said he never saw advice that a proposed coal port posed “extreme” risks – including threats to endangered turtles and a species of dolphin – at the Great Barrier Reef.

Campaigners said Tony Burke should have ruled out the Fitzroy Terminal as soon as the government received the strongly worded warnings, rather than allow the company to undertake a lengthy environmental impact statement.

But a spokeswoman said the minister had not seen the 2011 advice and the decision that the $1.2bn project should proceed to assessment was made by a delegate.

Burke recently described the region where the proposed terminal would operate as “the front lawn of the Great Barrier Reef”.

The warning about the potential impact of the proposed project in the Fitzroy River delta south of Rockhampton was delivered to the federal environment department by the Great Barrier Reef Marine Park Authority (GRMPA), the body responsible for protecting and managing the world heritage-listed reef.

In its August 2011 advice – released publicly after a freedom of information request by the GetUp! advocacy group – GRMPA said its preliminary risk assessment “has identified seven risks with an extreme consequence rating” due to the proposed project, including extreme consequences “on threatened and migratory species including three species of vulnerable and endangered turtles and the Australian snubfin dolphin.”

GRMPA concluded that the port had “the potential to have unacceptable and high risk impacts on the [Great Barrier Reef] and in particular the flatback turtle and snubfin dolphin populations”.

Burke told Guardian Australia recently that the Fitzroy Terminal, proposed by The Mitchell Group, and a second nearby terminal proposed by mining giant Xstrata, were both in the kind of “relatively untouched and pristine” areas that Unesco’s world heritage committee has said should not be subject to further development.

“The minister has the legal power to say a project is inconsistent with Australian environmental laws, and reject it, at the time it is first referred to him, and in this case he had clear advice that it was completely inappropriate for a world heritage area,” said GetUp! campaign director Paul Oosting.

A spokesman for the Fitzroy Terminal Project said the company had worked with “environmental and world heritage specialists” to make sure its plan – to barge coal into deeper water where it will be loaded on to transport vessels – had “minimal impact” and addressed all environmental concerns.

“Mitchell Ports’ team recognised the critical need to find a low impact export solution for projects along the Queensland coast years before the interest expressed by Unesco and green groups regarding port developments,” the spokesman said.

The environmental impact statement (EIS) would be submitted later in 2013.

“We believe from the scientific reports presented to us to date that the EIS will demonstrate that our proposed barging and transhipping operation offers a far smaller impact than traditional port developments, due largely to the vast reduction in dredging requirements. The EIS will demonstrate that the impacts associated with the project can be successfully managed, and we are confident that the project will be approved by both levels of government,” he said.

Last year the world heritage committee warned it was considering putting the reef on its list of world heritage sites “in danger” and said Australian governments should “not permit any new port development or associated infrastructure outside of the existing and long-established major port areas within or adjoining the (world heritage) property, and to ensure that development is not permitted if it would impact individually or cumulatively on the outstanding universal value of the property”.

The Fitzroy Terminal is technically in an existing port area, but in the recent interview with Guardian Australia Burke said: “The area around Balaclava Island is in my view and based on the environmental evidence, relatively untouched and pristine. There are large and important areas of seagrass … it is effectively the front lawn of the Great Barrier Reef.” © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

Lu Guang’s The Polluted Landscape: the camera never lies, even in China – audio slideshow

Chinese photojournalist Lu Guang goes deep into China’s ravaged heartlands and documents the nation’s environmental crisis