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.
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.”
And 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.
The 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.
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.