Coal collapse turns 50 as Peabody fails, “clean coal” exposed as myth

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Peabody biggest and most dramatic of coal company failures, as new report finds that even “clean coal” has no role in a world aiming for less than 2C temperature rises.

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The crisis deepens for the global coal industry.

In the US, the world’s largest privately owned coal mining company Peabody filed for bankruptcy, taking the number of coal company collapses in the world’s biggest energy economy to 50.

bnef china $100bn market

In China, coal consumption may have peaked and coal imports have fallen 30 per cent in the past year. In the meantime, China has become the first economy to invest $US100 billion into renewable energy in a single year.

In the UK, solar provided more electricity than coal in a single day for the first time last week. It continues a trend that means that coal usage in the UK – where the coal-powered industrial revolution started in the 18th century – is now at the lowest it has been since 1860.

“This is the story of coal writ large,” said Michael Liebrich, the founder of Bloomberg New Energy Finance last week, noting that coal use is due to cease within a decade.  “And this — this is the future of coal.”

coal UKAnd amid all this, a new report by European consultants Ecofys concludes that there is no place for coal, not even “clean coal” in a world that aims to keep average global warming well below 2C, as more than 190 countries agreed at the Paris climate conference.

But as environment minister Greg Hunt prepares to fly to New York next week to sign that agreement, Australia refuses to believe that anything can deter its intention to dig up every turn of coal and burn every molecule of gas, as the most recent energy minister Ian Macfarlane infamously boasted.

The collapse of Peabody holds some irony for Australia, because it was its purchase of Australia’s Macarthur Coal, for $5 billion, that helped push up its debt levels and leave it vulnerable to a change in the industry’s fortunes. And the coal industry, like the politicians and the lobbyists that support it, still believe a change is at hand.

The energy minister Josh Frydenberg said he saw no impacts from the Peabody collapse, a comment either prompted or echoed by the Minerals Council, which said “there were no implications” for Australia from the Peabody collapse, and in fact the outlook for the industry was improving.

But only if you completely ignore climate change. The Ecofys report shows that any coal-fired power generation – including those using new technologies (dubbed “clean coal”) – will take the world off course from the internationally agreed target of keeping temperature rise well below 2°C above pre-industrial levels.

 “It is clear that in a post-Paris world, there is quite simply no role for coal, however ‘efficient’,” said Sebastien Godinot, Economist at WWF’s European Policy Office, which commissioned the report.
WWF Australia spokesman Adrian Enright said the report sends another signal to Australia, one of the largest coal exporters in the world, that coal does not have a place in modern international energy systems. “If Australia is to remain competitive it needs to urgently shift away from coal.”

peabody share priceThe fall of Peabody is a totemic moment for the coal industry. Coal companies have been collapsing in increasing numbers since the market turned in 2012, but over the last 12 months it has claimed bigger and bigger victims – the $5 billion Walter Energy, the $10 billion Alpha Coal, and the $10 billion Arch Coal.

Peabody’s collapse has been spectacular. In April, 2011, its share price was more than $US1,090. It then collapsed to just $2.07 a share. The concern is now that its collapse will add to the growing number of mines whose rehabilitation will now have to be funded by the taxpayer.

Peabody and other coal companies have been fighting both the science of climate change, and the regulations and policies designed to resist pollution.

This has been going on for a long time. The Guardian reported this week that the Stanford Research Institute presented a report to the American Petroleum Institute in 1968 that warned the release of carbon dioxide from burning fossil fuels could carry an array of harmful consequences for the planet. Yet the oil industry continued to fight it.

Last year, it was revealed that ExxonMobil, the world’s largest oil company, knew of climate change as early as 1981, only to spend millions of dollars over the following 27 years to promote climate denial. The exposure of this prior knowledge has been led by Inside Climate News.

coal braidwoodIndeed, the impact of burning fossil fuels has been known for a lot longer than that.

Greens deputy leader and climate spokesperson Larissa Waters spotted this little them, from the local paper in Braidwood from 1910, which suggested that emissions from fossil fuels would create a “blanket for the earth” and increase temperatures, and lead to significant issues a century or two later.

And more than a century later, the industry continues to pretend that it is not happening. BP, for instance, wants to drill for oil in the Great Australian Bight.

A new report from German-based Climate Analytics describes this planned oil venture as the world’s “next great carbon bomb”.

It said it would annihilate Australia’s carbon budget, producing the equivalent of nearly eight times Australia’s 2013 carbon dioxide (C02) emissions from fossil fuels, and blow the country’s remaining C02 emissions budget to 2050.

 

 

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12 Comments
  1. suthnsun 3 years ago

    May Peabody RIH. Starting to feel like that about LNP. total destruction is arguably warranted.

    • david_fta 3 years ago

      Tony Windsor’s farm was one of those within Whitehaven’s Werris Creek project – now owned by Peabody.

      Even if the Werris Creek mine stays open for now, we can expect Peabody to declare bankruptcy again in a few years’ time. That’ll avoid paying worker entitlements and also site rehabilitation costs.

      • suthnsun 3 years ago

        With luck and a fair breeze Peabody may fail to reconstitute even after they rip off their creditors and the taxpayers.

        • onesecond 3 years ago

          Let’s hope for the best, but they will probably rear their ugly head again, but luckily it will be much smaller and suffering from terminal illness.

        • david_fta 3 years ago

          Peabody may be gone forever? Oh, happy day!

  2. Peter Grant 3 years ago

    What a great T Shirt that newspaper article would make.

    “Frydenberg said he saw no impacts from the Peabody collapse”, well I suppose that might not include the risk premium for lending to new Coal projects then… The Malabbot governments economic ‘credentials’ on show, yet again.

  3. John Saint-Smith 3 years ago

    It’s more than a little ironic that The World’s Greatest Minister for new coal mines and bleached coral reefs has now become a fan of solar energy storage.

    “Solar and storage together are the future of electricity,” Hunt said during a whirlwind visit to two battery storage trials at new residential communities in Western Australia. “That’s a huge direction in Australia and we are the world’s leading household solar nation.”

    Pity he has worked so hard for the last two and a half years to stop solar and wind energy projects that might have been used to charge the batteries.

    In these days of record breaking climate change, its kind of reassuring that our government is also breaking records – for having plumbed hither-to unknown depths of utter stupidity and short-sightedness.

    • Geoff 3 years ago

      absolutely no way the charmichael mine is going ahead after this! there is no way that hunt is going to be able to save his reputation just by posing in front of a few batteries. the damage is done and man don’t Australians know it!

      • solarguy 3 years ago

        Let’s hope so Geoff. This country couldn’t take another term of the lying morons. And let’s also hope the majority of apathetic voters, see the light.

  4. Jan Veselý 3 years ago

    Then the coal company came with the world’s largest shovel
    And they tortured the timber and stripped all the land
    Well, they dug for their coal till the land was forsaken
    Then they wrote it all down as the progress of man.
    [Chorus:]
    And daddy won’t you take me back to Muhlenberg County
    Down by the Green River where Paradise lay
    Well, I’m sorry my son, but you’re too late in asking
    Mister Peabody’s coal train has hauled it away.
    John Prine – Paradise

  5. Malcolm M 3 years ago

    These coal company collapses must surely affect the capacity of coal industry lobbyists to buy influence in political parties through donations. How long before the political parties realise the cheques from big coal have nearly come to an end ?

  6. Michael Berris 3 years ago

    The increasing trend of declaring that the tax payer will have to foot the clean up bill for industrial operations gone wrong is very disturbing. If I rent a property, I have to front up with a bond, held by an independent organisation, to ensure that if I leave behind damage, there are resources to cover it. Maybe it’s time that either a bond or insurance premium is created to ensure that industries started wil not leave the earth in an increasing mess when they fold.

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