Queensland election could slow Australia’s dash for coal

Snap election offers unique opportunity to halt developments that menace the Great Barrier Reef and the climate

Abbot Point port is the gateway for coal from the Galilee Basin (Pic: Greenpeace/Tom Jefferson)

Abbot Point port is the gateway for coal from the Galilee Basin
(Pic: Greenpeace/Tom Jefferson)

By Megan Darby

Controversial plans to expand a coal port near the Great Barrier Reef are on hold as the Australian state of Queensland gears up for an election.

The Abbot Point project aims to open up the vast coal reserves of the Galilee Basin to the world, part of a $16.5 billion project backed by the Indian Adani Group.

When Queensland voters go to the polls on 31 January, it is not just their regional economy and environment at stake. Their choice of government has profound consequences for global energy markets and the climate.

It is a microcosm for the debate about climate change raging across Australia, which in 2014 experienced its third warmest year on record.

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The two main Queensland parties are neck and neck in the polls. At first glance, their positions on coal development are not that different – both are broadly supportive.

Campbell Newman, premier in the Liberal National Party government and an ally of prime minister Tony Abbott has said: “We are in the coal business. If you want decent hospitals, schools and police on the beat we all need to understand that.”

Since coming into power in 2012, LNP has been diligently removing barriers to coal expansion, whether legal, regulatory or economic.

“This government has been bending over backwards to try and get this port expansion,” Felicity Wishart of the Australian Marine Conservation Society told RTCC.

“If they are returned, we expect them to get construction under way as quickly as possible.”

Infrastructure subsidies

Labor too has made clear it sees coal as an important part of the state’s economy.

Former premier Anna Bligh described the idea of ruling out new coal mines as “simply preposterous”. To do so would “spell economic and social catastrophe for Queensland and the national economy”, she said.

But Labor is less keen to subsidise rail and port infrastructure, without which mining companies could struggle to make an investment case.

Deputy Labor leader Tim Mulherin, who is retiring, told the Guardian new projects “can’t come at any cost”.

The Newman government “put the cart before the horse,” he said, by committing millions of dollars to the development before all the necessary approvals had been granted.

Queensland premier Campbell Newman is expected to lose his seat (Pic: Flickr/Dale Napier)

Queensland premier Campbell Newman is likely to lose his seat in the coming election, polls show (Pic: Flickr/Dale Napier)

Environmental campaigners plan to put pressure on both parties to shift their positions over the next three weeks.

“One of the big issues is how much the state subsidises the development,” said Wishart. “I think Labor will be far less willing, which means the project must stand or fall on its own financial merits.”

The economic conditions for new coal mines are challenging. Lower than expected demand growth from China has left the market oversupplied, halving the coal price since 2011.

Glencore Xstrata shut all its Australian mines for three weeks over Christmas in a bid to save cash.

The industry is seeking to make a virtue of this low price by presenting coal as a solution to energy poverty.

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The company with the biggest interests in the Galilee Basin is Adani, which plans to ship much of the coal to India.

India has plans to triple coal power capacity to 450GW by 2030, as part of prime minister Narendra Modi’s promise to bring electricity to 300 million people without.

While few would dispute the urgent need for energy in many parts of the world, burning coal comes at a hefty environmental cost, not least for India.

There is mounting evidence a dash for coal is incompatible with efforts to avoid catastrophic climate change.

The latest UCL study found 82% of global coal reserves must stay in the ground to stand a chance of limiting temperature rise to 2C – a goal agreed by countries in 2009.

Assuming the cheapest sources of fuel are used first, more than 90% of Australian coal is “unburnable”, researchers found.

A report by the Carbon Tracker Initiative last September showed the Galilee mines would be surplus to requirements if demand slowed down.

Analyst Luke Sussams told RTCC it would be “madness” for investors to back new coal mines.

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In the face of these headwinds, mining companies have sought to convince Queenslanders coal development is essential to their interests.

Adani has run an advert promising 10,000 jobs and US$22 billion of royalties and taxes for state coffers.

The Australia Institute (TAI) says both claims were “heavily exaggerated” and campaigns like this give a false impression of coal’s importance to the Queensland economy.

The sector employs 1.2% of the state’s workers and coal royalties provide 4% of government revenue, the think-tank showed in an October report.

“They are actually a very small part of the economy but they project this idea they are a huge part,” researcher Mark Ogge told RTCC.

The state government had given the coal sector some AU$8 billion worth of support in the past six years, TAI found. For comparison, coal royalties for 2014/15 were projected to total AU$2 billion.

The Great Barrier Reef is under threat from climate change and port expansion plans (Pic: Flickr/Richard Ling)

The Great Barrier Reef is under threat from climate change and port expansion plans
(Pic: Flickr/Richard Ling)

Opposition to Abbot Point has mainly focused on its impact on the sensitive coral ecosystem of the Great Barrier Reef, a major tourist attraction.

A poll commissioned by TAI found 63% of Queenslanders were opposed to projects that would increase port and shipping activities near the reef.

Newman’s government neutralised some objections by shelving a plan to dump spoil from dredging a shipping channel on the reef.

The alternative site, Caley valley wetlands, is also “completely unacceptable” to Wishart. The Alliance to Save Port Hinchinbrook has mounted a last-ditch legal challenge.

Carbon bomb

On a global scale, getting the Galilee Basin’s coal to market could fuel substantial greenhouse gas emissions, worsening climate change.

Based on mining companies’ figures, Greenpeace estimates the Galilee Basin could produce 330 million tonnes of coal a year at its peak.

When burned, that would generate some 705 million tonnes of carbon dioxide, more than the fossil fuel emissions of Iran or Canada.

Under prime minister Tony Abbott, the federal government has dismissed climate concerns and launched an assault on measures to curb emissions.

After another year of heatwaves and wildfires, Australians are finding the reality of global warming increasingly hard to ignore.

In Queensland more than anywhere, voters have the power to put the brakes on.

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