In the same week that a Greenpeace/Ecofys report identified the 14 carbon bombs that could blow the world’s climate budget our of the water (this includes Australia’s burgeoning steaming coal exports), Australian resources group Linc Energy announced it had found what it believed to be enough shale oil in central Australia to make the country energy independent.
This project has the potential to rival the other “carbon bombs” identified by the Greenpeace/Ecofys report – an illustration of which is included below. (click to enlarge).
Perhaps the next big energy story could go something like this: A mining group that looks up at the sky, discovers the sun, and declares its found enough energy to power the world. “It’s still early days, but if the sun is still there next week, we’re pretty sure we’re on to a good thing,” the mining group’s CEO might say.
The market for great expectations
Linc Energy’s estimate of shale oil resources was based on a fair bit of guess work, and its forecasts belong to what the industry describes as the least amount of certainty - they simply haven’t done enough research or drilling to be sure. Nevertheless, the mainstream media couldn’t help themselves, multiplying the potential resource by the price of oil and coming up with a golly gosh number of $20 trillion which lit a fire under the stock’s share price, before the company tried to pour cold water on the flames it had lit.
This came just a week or so after another stock market story that gathered huge attention – the fake press release issued by anti-coal campaigner Jonathan Moylan about banking support for Whitehaven Coal, the developer of a controversial new coal mine. The press release caused the stock to briefly dip, sending investors, lawyers, the ASX and the mining industry into paroxysms of angst. The best explanation comes from Moylan himself.
Climate in, climate out
First of all, it was Treasurer Wayne Swan, speaking to Washington audience about Australia’s major economic opportunities and challenges, and then it was Prime Minister Julia Gillard, outlining the major security threats in the decade to come – and both inserted climate change almost as an after-thought. Australia reckons its biggest threat is from the internet. And then the Australian Opposition insisted it would be repealing everything to do with the carbon tax, and replacing it with their “direct action” proposals, which involves giving tax payers money to close down fossil fuel generators which are already being forced out of business by the growing penetration of renewables.
Contrast this with the US – where Barack Obama has just completed a near-long Presidential campaign with barely a mention of climate, and then included it as one of his central themes in his inauguration address. The White House is savvy enough not to try and force a carbon price through a Republican-dominated House at this stage – despite the enthusiasm of certain Democrats. But Obama has enough tools at his disposal, principally through tough regulation by the EPA (no government handouts there) and continued investment in renewable such as solar and energy storage. Senator John Kerry told a Congressional hearing into his confirmation as the new Secretary of State that climate change was the biggest long term threat to US security.
Australia’s changing energy market
Meanwhile, Australia’s energy market is changing quicker than anyone expected. Emissions are falling, and so is demand, and coal and gas-fired generation are being placed in mothballs because of the changing industry dynamics. Fossil fuel subsidies, however, continue apace, with one estimate suggesting they amount to $10 billion a year. Australia’s manufacturers want more, however, calling for their gas supplies to be insulated from the export parity price that will be set by Australia’s big new growth industry, the export of LNG. These are the very subsidies that the IMF, World Bank, the IEA, and even Australia as part of the G20 has vowed to replace. Perhaps the manufacturers could learn from the Gulf states, who have understood it is much smarter, and cheaper, to invest in solar.
The renewable news you may have missed
Over the holiday break, there was a lot happening in wind, with Meridian reportedly seeking a buyer for its share of the 420MW Macarthur wind farm, which will be Australia’s biggest when the $1 billion project is commissioned in the next few months. Meanwhile, Meridian began construction of its 131MW Mt Mercer wind farm near Ballarat, and Origin Energy withdrew its $900 million Stockyard Hill wind project from sale, raising a bunch of speculation on what that may mean, and Mt Mercer wind farm.
The really big news, though, for the Australian wind industry was the proposal to upgrade the Heywood inter-connector and associated infrastructure, which will allow more wind to be exported from South Australia into Victoria and elsewhere into the eastern states, making it more economically attractive for more wind farms to be built in S.A, which already sources around a quarter of its electricity from wind energy. And the connection to the wind-rich Eyre Peninsula may also be upgraded – paving the way for the development of several gigawatts of potential wind energy capacity.
In solar, German developer Belectric announced plans for a 5MW solar plant at Mildura – pending a PPA and finance arrangements, in what is tipped to be the first of a wave of solar PV installations in the 5MW to 30MW range in Australia. Meanwhile, according to consulting firms SunWiz and Solar Business Services, more than 1GW of rooftop solar PV was installed on Australian households in 2012.
RenewEconomy celebrates a birthday with record traffic
Finally, this week marked the first anniversary of RenewEconomy. Our birthday treat turned out to be record traffic on both the day itself (Jan 23) and the following day, and record weekly traffic to boot – thanks in part to our two reports, here and here, about UBS heralding the arrival of subsidy-free solar PV. And it’s still the last week of the holidays. Thank you for your interest, and we hope it continues.