The Smartest, Greenest State?


Is there any overarching policy guiding the NSW government when it comes to the question of how to transition to a more sustainable society? The NSW Department of Environment and Climate Change manages the NSW State Plan and NSW Energy Efficiency Strategy and aims to mitigate the effects of climate change by cutting greenhouse emissions by 60 per cent by 2050 and achieving 20 per cent of renewable energy production by 2020. However, recent decisions to retain ownership of the Cobbora coal project and to commence exploratory mining for natural gas in Sydney’s inner west are contrary to these aims — if not in direct violation of DECC’s aspiration for NSW to become "the smartest and greenest State in Australia".

The NSW Government’s decision to retain ownership of the Cobbora coal project is in direct opposition to Labor’s declared commitment to reducing dependency on coal. The NSW Government withdrew from the coal industry in 2002 when the last of the coal mines were privatised and sold to Centennial Mines. Following this precedent, the NSW Government had been negotiating with Whithaven Coal to mine Cobbora but failed to reach an agreement on price.  This prompted the decision to retain ownership of Cobbora.

The Government’s announcement (if you can call the "Energy Reform Update 10" on the NSW energy reform website an announcement) was made during the state’s massive sell-off of government owned power providers, and revealed the Keneally’s plan to sell coal to private buyers at a massive 40 per cent discount.
The NSW Government proposes to sell the coal at $35 per tonne — $25 less than the market price — in order to guarantee "cheap" coal for electricity generators across NSW for at least 17 years. By artificially depressing the price of coal, the NSW government is guaranteeing cheap coal for decades — a move that flies in the face of Gillard’s talk of a carbon price and shift towards renewables, and goes against the NSW government’s own Greenhouse Gas Reduction Scheme  and other energy efficiency programs.

Not only does this move undermine Gillard’s belated push for a national carbon tax, it also undercuts the market’s ability to regulate the consumption of this finite resource. The Keneally Government’s proposed subsidy of approximately $1 billion (based on current coal prices) threatens to provide cheap coal to power stations up until 2032, potentially rendering coal the cheapest source of energy in NSW — even if a national carbon tax is imposed.

The NSW Government’s second move away from sustainable energy policy was the announcement of plans for exploratory mining for natural gas in Sydney’s inner west. This announcement came as the controversy unfolded in Queensland after a drill site was found contaminated by toxic chemicals used in the extraction process.

There has been community outcry over the lack of consultation between the NSW Government and local residents. The Greens and other community groups in Tempe and St Peters have all demanded a full inquiry and community consultation. The very public decision to embark upon large scale exploration in the inner west was taken without an environmental impact investigation or any open negotiations with constitutents.

An even more fundamental problem, however, is that the decision to begin exploratory mining has been justified as a strategy to reduce greenhouse emissions by investing in an alternative form of energy supply to fossil fuels. This justification appears to be groundless as there is no conclusive evidence that natural gas is any less damaging than the burning of fossil fuels like coal.

It is certainly true that natural gas emits less carbon dioxide than burning coal. Robert Howarth, Professor of Ecology and Environmental Biology at Cornell University who has released one of the first investigations into the greenhouse gas emissions resulting from the use of natural gas as an energy source and his research suggests that gas is not the clean energy source it is often said to be. He argues that in view of all the emissions involved in the mining, development and transportation of natural gas — and the conservative estimate of a 1.5 per cent leakage rate of methane (the largest component of natural gas and a much stronger greenhouse gas than coal) — natural gas is no more sustainable than burning dirty coal.

Whilst Howarth’s research is preliminary, his evidence sheds considerable doubt over whether it is worth investing billions of dollars in its extraction when renewable energy sources are readily available. The NSW Government has declared its commitment to reduce greenhouse emissions and "build a prosperous low-carbon economy". Neither the Cobbora Coal Mine nor the exploration for natural gas suggest any sort of long term planning or genuine commitment to a more sustainable economy.

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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.