Australian bet on clean coal risks climate change

The Australian Labor Party (ALP) is counting on clean coal technology (CCT) to achieve long term energy security by exploiting Australia’s huge coal reserves. This is a high risk policy given the enormous challenge of CCT which captures carbon dioxide and buries it in exhausted oil or gas fields. It suggests that the ALP, like the current Howard Government, is in thrall to the fossil fuel lobby.

A major theme of Labor leader Kevin Rudd’s April 27 speech to the 2007 annual ALP Conference was that Australia ‘desperately needs a government engaged in the business of long term solutions.’ Rudd identified ‘long term energy security’ and ‘climate change’ as two major challenges facing the nation over the next decades.[1] Ten days before Rudd’s speech, Senator Chris Evans, Shadow Minister for National Development, Resources and Energy, outlined the direction of ALP’s energy policy in his speech ‘Where Does Energy Policy Have To Go’ to the Australian Petroleum Production and Exploration Association Conference.

Noting Australia’s oil production was in decline with limited future prospects, Evans stated that Australia is ‘facing a profound shift in the source of our liquid fuels, which has major implications for our energy security in the future.’ Australia ‘faces a trade deficit in oil and condensate of up to $27 billion in 2015 … compared to a deficit of just under $4 billion in 2005.’ According to Evans the key issue is Australia’s reliance ‘on overseas sources, including the Middle East, for up to 80 per cent of its oil’ leaving the country exposed to potential disruptions to supply and price shocks. [2] He defined Australia’s energy security challenge as developing ‘a secure supply of alternative liquid fuels over the medium to long term.’ This would be achieved by diversifying sources of liquid transport fuels through ‘development of gas-to-liquids, coal-to-liquids and biofuels.’

Evans also touted the ALP’s $500 million National Clean Coal Initiative, noting that Australia’s ‘immense reserves and the importance of our coal exports mean that the development of CCT must be a strategic energy priority.’ Under Labor then, Australia will be doing the same as it is now under the Liberal-National Coalition: pinning its hopes on CCT. Australia generates 79% of its electricity from coal[3]. Using coal to generate electricity and converting coal (or gas) to liquid fuel are high CO2 emission processes. CCT can be applied to all of them, however, CCT reduces power plant efficiency and requires, according to a recent MIT study, 27% to 37% more coal for the same energy output.[4]

The problem with CCT is the huge scale on which it must be applied. Canadian energy researcher Vaclav Smil calculates that if just 10% of global CO2 emissions were to be sequestered, this would mean burying annually about 6,000 million cubic metres of compressed CO2 gas. This is larger than the annual volume of oil extracted globally – a bit less than 5,000 million cubic metres in 2005. This means creating an industry that would, every year, force underground a volume of compressed gas larger than the volume of crude oil extracted globally by the petroleum industry. Noting that the oil industry’s infrastructure and capacity has been put in place over a century, Smil concludes that ‘such a technical feat could not be accomplished within a single generation.’ [5]

Smil also notes that the same 10% reduction in CO2 emissions could be achieved by improving energy efficiency. Reducing the average annual US per capita energy consumption – roughly twice the affluent EU level – by about 40% would cut global carbon emissions by at least 2,500 million tonnes. This is nearly 10% of the 28,000 million tonnes emitted globally in 2005.

Australia is the world’s largest coal exporter, and the Howard government has repeatedly stated that it will not ratify the Kyoto protocol because of the importance of protecting Australia’s energy exports. In his recent book ‘Scorcher: The dirty politics of climate change’, Clive Hamilton, Executive Director of the Australia Institute, argues that the Howard government believes Australia’s future prosperity and strength as nation depend on one factor above all others: Australia’s ability to increase energy exports to Asia. This belief explains its refusal to ratify Kyoto. In July 2006 John Howard even stated that he wanted Australia to become an ‘energy superpower.’ Hamilton also exposes the powerful influence of the ‘greenhouse mafia’ – a group of extremely well-connected lobbyists mainly from the Coal and Aluminium industries – on Australia’s environmental and energy policies[6].

In pursuit of its vision, which is no higher than remaining Asia’s coal mine, the Howard Government’s low ambition has been to undermine international cooperation to address climate change. In stark contrast, Rudd wants to take action on climate change by setting an ambitious CO2 emission reduction target of 60 per cent by 2050. Polls indicate this would have popular support. Rudd has also outlined a new vision for Australia that looks beyond the resource boom to new prosperity based on education and technology. He’s stated: ‘I don’t want to be a prime minister of a country that doesn’t make things any more.’

The ALP’s long term energy policy is high risk because it is reliant on technology barely out of the laboratory, which may not work on a large scale, and even if it does, may take a century to become established. It therefore collides squarely with the ALP’s ambitious 2050 CO2 emission reduction target. The ALP’s long term energy policy is high on hope and, if it fails, will have delayed any action to reduce Australia’s high coal consumption and CO2 emissions. The ‘greenhouse mafia’ would approve.

[1] SMH (2007) ‘I’m Kevin. I’m here to help’, Sydney Morning Herald, 27 April 2007, [Online], Available: http://www.smh.com.au/news/national/im-kevin-im-here-to-help/2007/04/27/1177459928740.html [27 April 2007].

[2] EVANS (2007) ‘Where Does Energy Policy Have to Go’, Speech to the 2007 Australian Petroleum Production and Exploration Association Conference, Labour eHerald, 17 April 2007, [Online], Available: http://www.chrisevans.alp.org.au/news/0407/respeeches17-01.php?print=on
[27 April 2007].

[3] IEA (2004) ‘Electricity/Heat in Australia in 2004’, International Energy Agency, [Online], Available: http://iea.org/Textbase/stats/electricitydata.asp?COUNTRY_CODE=AU, [12 May 2007].

[4] MIT (2007) The Future of Coal: Options for a carbon-constrained world - An Interdisciplinary MIT Study, Massachusetts Institute of Technology, [Online], Available: http://web.mit.edu/coal/ [18 March 2007].

[5] SMIL, V. (2006) Energy at the Crossroads: Background notes for a presentation at the Global Science Forum Conference on Scientific Challenges for Energy Research, OECD Conference on Scientific Challenges for Energy Research, Paris, 2006, [Online], Available: http://home.cc.umanitoba.ca/~vsmil/pdf_pubs/oecd.pdf
[11 December 2006].

[6] HAMILTON, C. (2007) Scorcher: the dirty politics of climate change, Melbourne, Black Inc. Agenda.

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