Rudd Backs the Wrong Horse on Coal


In one of those perfect ironies, Prime Minister Rudd’s announcement of his $100 million push to make Australia the global coal hub last Friday came on the same day that yet another so-called "clean coal" project, Santos’ Fairview operation in Queensland, was scrapped.

The Fairview collapse "was to do with getting the funding balance right", according to a Santos spokesperson quoted in the Australian Financial Review last Friday. That, of course, is code for "we want more money from governments", tactfully argued by a company whose last half-year profits were $304 million and whose project has already been handed $75 million in taxpayer funds.

The Fairview collapse echoed the failure early this year of the global pin-up for coal geosequestration, FutureGen in the United States. FutureGen, which the Howard government had invested in, alongside various other governments and coal multinationals, fell over after the Bush Administration decided it was too far over budget and behind time to justify continued funding.

Of course, taxpayers in Australia, the US and elsewhere, would be entitled to ask why they should pay at all for cleaning up the act of an industry that has made many billions of dollars in profits out of polluting our planet for more than two centuries. BHP Billiton made a record US$15 billion last year and Rio Tinto US$7.4 billion. If these corporate giants were interested in cleaning up their act, they would pay for it out of their mammoth profits. It is both bad economic policy and a direct breach of the polluter pays principle to spend taxpayers’ money doing their job for them.

The question of who should pay for developing geosequestration technology, however, is only one of the issues that the Rudd Government has ignored as it does everything it can to make sure the coal industry is not left out of pocket. Despite a host of unanswered technical and legal questions, Rudd Government ministers rarely (if ever) mention climate change without making sure to point out that the coal sector has never had a better friend.

By supporting these so-called "clean coal" projects with funding, the Rudd Government is delaying recognition of just how limited their real-world usefulness actually is. It was not funding issues, for instance, that knocked over Hydrogen Energy inWA, a major joint venture between Rio Tinto and BP. It was the small fact, somehow overlooked in the initial work that they trumpeted around the world last year, that the geological formation off Perth that they were planning to fill with carbon had a large hole in it.

This exposes a key technical problem that is starting to worry even some inside the coal sector itself: where can you find enough safe storage space to bury permanently the vast quantities of carbon dioxide that our coal power plants pump out every year?

Australia’s coal power emissions alone would require permanent safe storage more than 2500 times the size of the storage trial started recently in the Otways — 250 million tonnes every year. According to Shell, a full system to transport carbon captured from the world’s power stations to storage would mean moving twice the volume of the entire current global gas industry.

The larger the amount of storage and transport, the more likely it is that corners will be cut, second-rate storage used, and leakage will occur.

Leakage on any scale, of course, defeats the whole purpose of the exercise. Billions of dollars would have been spent capturing, transporting and storing carbon dioxide for nothing. But, in addition, leakage also brings the liability monster bubbling to the surface.

The coal corporations are following in the footsteps of the nuclear industry, telling governments that no progress will be made until they are absolved of any liability in case stored carbon leaks. In other words — yet again — they want to privatise the profits and socialise the risk.

Following the bailouts of Fannie Mae, Freddie Mac, Northern Rock and others caught up in the sub-prime crisis, where government have been forced to carry the can for failed capitalist enterprises, one might have thought that governments would be reluctant to set themselves up for a similar fall with geosequestration.

However, the Rudd Government has conspicuously failed to deal with the issue of liability before committing many hundreds of millions of dollars to another industry with an even higher chance of failure. The regulatory framework that the Government currently has before Parliament squibs on the issue, leaving open the question of who will carry liability after a storage site is closed.

The Government’s support for coal and geosequestration goes hand in glove with its position that Australia can get away with high emissions for decades into the future.

The fatal flaw of coal, even with ideal geosequestration efficiency, is that it will always emit some carbon dioxide — and that amount won’t be less than 10 per cent of current coal. The deeper the emissions cuts you need to achieve, the less relevant carbon capture becomes. In a world where we only needed to reduce emissions marginally over a long time — say 60 per cent by 2050, as is the Government’s aim — geosequestration might be an option. But that isn’t our world.

The science is clear that we are already entering the zone of dangerous climate change, and that minimising the risk of catastrophic, runaway change means heading for net zero emissions as soon as feasible.

In our real world, we need zero emissions energy sources, and we need them fast. Coal with geosequestration doesn’t fit the bill.

It’s hard to see how this plan of the Government’s is actually going to amount to anything. When we have had no more success than anyone else in the world, why is the Government throwing $100 million each year at a making Australia a global hub for technical and legal knowledge on coal? Will the world really come to us for advice when our projects are falling over? Will governments be inspired by our legal expertise when we have failed to even address the largest regulatory issue facing the industry?

Surely it would have been better to invest that money into bringing home our world-leading solar scientists — the Australians who have fled to Germany, China and the USA in recent years to get the support they deserve and the situation demands?

As one of the world’s sunniest countries, we should be making Australia the global solar hub, the Saudi Arabia of solar, demonstrating baseload solar thermal power, the world’s most efficient solar cells, solar water heating and the best possible regulatory measures to roll out all those alternatives.

Instead of giving us that inspiring vision, Rudd is responding to growing economic and environmental uncertainty by deepening Australia’s vulnerability to those problems. This "clean coal" funding is simply throwing more money at a solution which does nothing except make it seem acceptable for us to keep mining huge amounts of coal.

Rudd’s research institute is unlikely to produce any real results — wasting money that could be far better spent on truly clean renewable energy and energy efficiency alternatives — technologies that have already leapfrogged clean coal’s "best case" scenario, and actually work.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.