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Coal wars: A fact check for the Turnbull government

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Australia wants to keep its coal rolling

Since Malcom Turnbull replaced Tony “coal is good for humanity” Abbott, the Adani Carmichael Mine, the Galilee Basin and environmental “Lawfare” had been out of the news. But an increase in the coal price and Turnbull’s apparent change of view means the Coal Wars are BACK. It’s time to re-arm yourselves the facts.

CLAIM: The Adani mine will create 10,000 jobs.

FACTS:

Adani’s own economist contradicted this under oath in the Queensland Land Court, saying:

“Over the life of the Project it is projected that on average around 1,464 employee years of full time equivalent direct and indirect jobs will be created”. 

1)Jerome Fahrer (2015) Carmichael Coal And Rail Project: Economic Assessment, Expert Report By Jerome Fahrer, Report To Land Court Of Queensland, Acil Allen Consulting Pty Ltd, Page 15 available from http://www.abc.net.au/mediawatch/transcripts/1513_adanijobs.pdf

  •   Adani’s economist, Jerome Fahrer from ACIL Allen, found that Adani’s mine and rail operations would employ around 1,800 people directly and create around 1,000 downstream jobs in “other services”.
  •   But, in building and operating such a big mine, ACIL found that the project would reduce employment in agriculture, manufacturing and other mining projects by around 1,400 jobs.
  •   All this is shown in ACIL’s graph below, with increased jobs at the Carmichael mine in yellow, increases in services in dark purple and reductions in manufacturing, agriculture and other mining below the axis:

rsz_screen_shot_2016-10-28_at_20209_pm

The black line represents the balance between jobs created and jobs destroyed by Adani’s mine. The average value of it is 1,464 jobs.

  •   Most of the jobs created would be Fly-In Fly-Out (FIFO) mining jobs, while the jobs destroyed are mainly manufacturing jobs in Queensland’s towns and cities.
  •   Queensland has a workforce of around 2 million people. Coal mining employs around 20,000 Queenslanders, or about 1% of the workforce. Coal is not a major employer in Queensland.

Claim: The Adani project and Galilee Basin are vital for Queensland’s budget.

FACTS:

  •   Coal royalties account for just 4% of Queensland government revenue. This is about the same percentage as the Queensland government receives from car registration. 96% of Queensland’s services are paid for by other parts of the economy. 2)http://www.tai.org.au/content/mouse-roars-coal-queensland-economy
  •   Queensland taxpayers paid for $8 billion worth of coal infrastructure between 2009–2014.Queensland Treasury noted “Governments face budget constraints and spending on mining related infrastructure means less infrastructure spending in other areas, including social infrastructure such as hospitals and schools.” 3)https://cgc.gov.au/index.php?option=com_attachments&task=download&id=1727
  • The Galilee Basin requires heavy subsidies to begin production. Adani was offered $450m from the Newman government to help fund a rail project. 4)https://www.theguardian.com/commentisfree/2015/feb/03/why-was-newman-was-handing-out- billions-to-an-indian-coal-mining-company-that-didnt-need-it Royalty “holidays” or “ramp ups” (aka free coal) have been, and may still be, Queensland government policy. 5)Queensland Government (2013) Galilee Basin Development Strategy November 2013, no longer posted on web, copy available on request.

CLAIM: The Adani mine has been held up in the courts for six, seven or even nine years!

FACTS:

  •   None of the current challenges legally prevent Adani acting on their approvals. A far more important hold up is that banks are reluctant to lend money to build the mine. 14 banks have distanced themselves from the project.
  • Delays have been caused by Adani’s environmental assessment documents being considered inadequate by regulators. Adani first referred the project under the EPBC Act to the Department of Environment in November 2010.10 Adani didn’t submit its EIS for the project until two years later (December 2012).11 The EIS was found to be inadequate and the Queensland Coordinator General had to seek additional documents from Adani. Adani were still submitting documents as part for the assessment process in March 2014.12

CLAIM: Vexatious “lawfare” is holding up mining and other major development.

FACTS:

  •   Legal action cannot be vexatious if you win. A legal challenge by the Mackay Conservation Group, saw Adani’s EPBC Act approval set aside by Federal court order in August 201513 because the government agreed that then Environment Minister, Greg Hunt had made an error in the approval by failing to consider impacts on endangered species.14
  •  Legal action against other coal mines has also been successful, finding that coal companies have not prepared adequate environmental assessment and that regulators have been wrong to approve them. For example, multiple cases against Rio Tinto’s Warkworth mine.
  •  Cases that have not resulted in coal approvals being overturned have not been vexatious. All have been found to have valid legal argument and most have seen environmental conditions tightened. For example, even in Adani’s Land Court win, the judge noted that its economic claims were overstated in both its environmental impact statement and in evidence to the court.15
  • The main environmental law that mining companies want changed is the Federal EPBC Act. Any examination of EPBC referrals shows that the law is not being misused. In its first 15 years (2000-2015) 5,500 projects referred under Act, with only 22 challenged in court by third parties. This means that 3rd party appeals to the Federal Court only affected 0.4% of all projects referred under the legislation.16

CLAIM: Australian coal is cleaner than coal from other countries.

FACTS:

  •   Australia does have a lot of high quality coal. Most of this isalready being mined in the Bowen Basin and Hunter Valley. The coal proposed to be mined by Adani’s Carmichael project has energy content of only 4,950Kcal17 compared to the benchmark of 6,000kcal.18
  •   The ash content of Carmichael coal is estimated to be 26%19 – more than double the average of 12% for Australian thermal coal.
  •   With an energy content of only 4,950kcal and 26% ash content, Carmichael is only 10% above the average quality of domestic Indian thermal coal in terms of energy content.20
  •   Any environmental impact comparison would need to account for the requirement that this low energy, high ash thermal coal needs to be transported 5-10 times the distance of domestic Indian coal – adding additional greenhouse pollution related to transport.

CLAIM: Galilee Basin coal is needed to solve the problem of energy poverty in India.

FACTS:

  •  People lack access to electricity not because there is no electricity but because they cannot afford access to it. The fastest and cheapest measures to alleviate energy poverty come from renewable energy. Adani’s energy poverty programs in India involve donating solar street lighting.21
  • Several coal companies support energy poverty programs in developing countries. NONE of these programs use coal as it is not an efficient solution.22
  •   Solar energy is now cheaper in India than coal. Indian solar tariff bids in 2015/16 reached lows of US$65/MWh23 and are forecast to fall to US$50/MWh within three years.24 New imported coal fired power generation requires a tariff of US$90/MWh.25 Therefore, new solar is already substantially cheaper than coal and will become significantly more so in future.
  •   The sharp decline in solar and wind power costs means scaled-up distributed renewables are the cheapest and quickest way of reaching electricity-poor households.26
  •   Increased use of coal will make poverty worse, not resolve it, as 12 leading international development agencies recently argued.27

CONCLUSION

The Adani project and the Galilee Basin mines are a 90 year bet on coal at a time when the rest of the world is betting the other way. They represent a substantial risk to local land holders, Queensland’s taxpayers and the world’s climate.

Source: The Australia Institute. Reproduced with permission.

  

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References   [ + ]

1. Jerome Fahrer (2015) Carmichael Coal And Rail Project: Economic Assessment, Expert Report By Jerome Fahrer, Report To Land Court Of Queensland, Acil Allen Consulting Pty Ltd, Page 15 available from http://www.abc.net.au/mediawatch/transcripts/1513_adanijobs.pdf
2. http://www.tai.org.au/content/mouse-roars-coal-queensland-economy
3. https://cgc.gov.au/index.php?option=com_attachments&task=download&id=1727
4. https://www.theguardian.com/commentisfree/2015/feb/03/why-was-newman-was-handing-out- billions-to-an-indian-coal-mining-company-that-didnt-need-it
5. Queensland Government (2013) Galilee Basin Development Strategy November 2013, no longer posted on web, copy available on request.
  • solarguy

    But coal is the only reliable power source isn’t. LOL.

    • FIFO69

      Its not he only source, but it is more reliable than solar.

      • solarguy

        Gee, I bet you can’t wait for the black lung disease to kick in, that’s the only reliable thing you have to look forward to.

        • FIFO69

          Yeah mate love it.

  • John Saint-Smith

    I think the most telling point here is that by definition, for an environmental protest to be successful, it must not have been judged ‘vexatious’ by the court. So the only way to determine that is for the defendant to show that it is vexatious before the court.

    To declare that all claims made by persons more than some arbitrary distance from the site are ‘vexatious’ and cannot be presented is to deny justice.

    This government has form in this manner of denying people with grievances access to the law. Manus Island detainees have been prevented from signing documents which would have allowed them take their case to the High Court of Australia.

    If Labor behaved like this, the LNP would be calling on the Governor General to dismiss the government.

  • Adam Smith

    So many untruths in this article. To start with, Vexatious litigation is legal action which is brought, regardless of its merits, solely to harass or subdue an adversary. Down vote me if you just want to harass and subdue Adani and consider the merits are justified by stopping another coal mine.

    • john

      Beside the definition of Vexatious litigation, which comes down to a law definition, show the many untruths?
      The value of the coal
      The jobs created.
      The benefit to the local area.
      Actually just how does it work with a needed price of over $70 and the Indian Government saying they are going to stop imports.
      This whole pie in sky project is not exactly good on paper or in fact.

      • Adam Smith

        Adani want to develop the mine to feed their own fleet of supercritical power stations in Western India. You need better quality coal than is available in India. IEEFA actually previously said the calorific content of Carmichael would be 5,260kcal, so untruth 1. The sulphur content unprocessed would be in the 20’s however once processed will be much lower, so lie 2. Adani have consistently said that they can get it delivered FOB at Abbot Point for around AUD50 and the current FOB value of Newcastle thermal is today around USD94 or AUD123 pmt, so lie 3. Shipping costs to India, not such a big problem as Indian coal is all on the Eastern coast, so they would have to ship it or rail it, they are basically hopeless at logistics, so just as cheap to ship from Abbot Point and more reliable, so lie 4. The banks that the greenies approached, such as HSBC were never going to lend to Adani in the first place, so 12 banks that said no when there are thousands of banks is a joke, so lie 5. Solar energy is intermittent power, India will build a lot of renewables but is also building super and ultra critical coal fired for energy security. Stopping imports, then why is coal of India doing deals with South Africa? If it is such a dud why all the propaganda and hysteria, surely if these so called experts are right, they have nothing to worry about and should stop the vexatious claims and just allow it to collapse? So much propaganda and hysteric untruths.

        • neroden

          The Indian government has declared that they are stopping imports of coal. This has been in lots of newspapers. They are also shutting down coal power plants because they are economically uncompetitive.

          It makes no sense to rip a giant hole in the ground and ruin the local environment to mine coal which will *never be used*. It’s a waste. This stupid mining proposal will collapse on its own for economic reasons but it’s important to make sure they don’t break ground before it collapses.

          • Adam Smith

            So glad that you have come to that conclusion, however if you are so confident then why keep hounding them? Why not just let them collapse as you suggest than that will learn them for being so silly to spend billions on a white elephant in the first place!

          • FIFO69

            The Indian draft National Electricity Plan document states that for the FY1617 period a total of 48Mt of imported coal will be required for plants designed for imported coal. Section 9.2.1.2 also states that there may be a requirement for additional imported coal in FY1617 for blending and due to domestic railway constraints.

            Additionally, for the period from 2021 through to 2027, imported coal is predicted to remain at 50Mtpa.

            The Carmichael project will produce 60Mtpa at nameplate capacity.

            Assuming 50Mtpa goes to India to supply Adani’s current powerstations (totalling 10,440MW of combined capacity) and potentially the 16,500 MW of capacity that Adani has under implementation and planning stage then that only leave 10Mtpa of coal to export elsewhere.

            Given that global coal demand is projected to increase by 15% through 2040 the Carmichael project should be a safe bet as they will have competitive advantage over existing mines as they can build efficiencies into the new project.

            Adani will own the supply chain from mine to powerstation and will get the coal at wholesale prices. The Adani owned Udupi and Mundra powerstations are also on the coast meaning minimal overland transport costs once off the ship.

            What makes you so sure that you know Adani’s financial forecasting and Adani’s market (their own powerstations) better than Adani?

          • solarguy

            You will be paying your taxes to subsidize Adani if the government are stupid enough to put our money in it, because the banks won’t. Adani have built a 468MW Solar Plant in India recently. Why because they know they can’t keep on burning the black shit and the banks where more than willing to invest in solar. Wake up sucker!

          • FIFO69

            The $1b will go into constructing the multi-user rail network which will allow other potential projects in the Gilalie.

            Also note that it is a loan, not a free handout.

            Its a similar arrangement to the deal that was done in the late 70s to construct the rail network for the Bowen Basin.

            We now have a coal mining province that provides $billions in revenue for the State and federal Governments. Would you prefer that this was never built too and central Queensland remained flogged out cattle grazing country for the past 40 years?

            If you read Indias new (December 2016) draft National Electricity Plan document (Section 9.3 page 9.11) it will show you that demand for coal is projected to continue to ramp up to 677Mtpa in FY2122 and then up to 900Mtpa in FY2627.

          • solarguy

            What I prefer is that this planet and all it’s species survives! Solar is cheaper than coal now a point you won’t acknowledge, but Adani got it. The Indian government gets it too. They will need coal for a while until renewables reach a critical mass. This my son is the beginning of the end for fossil fuels, like it or not.

  • Tim Buckley

    Great article, thanks to TAI. A quick guide journalists / politicians could use to get their facts straight rather than constantly recycling mistruths.

    The other key misrepresentation is on exaggerating the capital cost of the project. Minister Lynham said this month it was $21.8bn. The Murdoch PR regularly references $16bn, whereas the Matthew Stephens in the AFR last month quoted JJ as saying the project has again be downsized and would now be just US$4bn (A$5bn). It would be great if JJ could clarify why he told the AFR US$4bn – maybe he could also tell the Qld and Federal government to stop quoting numbers that are heavily inflated and six of years out of date. http://www.afr.com/opinion/columnists/adani-prepares-for-an-end-to-lawfare-with-a-smaller-cheaper-carmichael-20160921-grla4o

    • Adam Smith

      Just wondering if you helped them write it? By their actions, TAI are anti coal, anti CSG and anti Coalition. Adani have been saying for more than a year that they would downsize the project and ship 30 mtpa.

    • FIFO69

      Wow, Tim Buckley requesting journalists to do some fact checking rather than constantly recycling mistruths. If they did that you wouldn’t get any coverage for your selective use of anti-coal ‘stranded assets’ propaganda mate.. You would be out of a job!