Fossil fuel lobby ramps up as Abbott goes for green jugular | RenewEconomy

Fossil fuel lobby ramps up as Abbott goes for green jugular

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Fossil fuel lobby intensifies attack on Australian renewables as Abbott hits detonate button on green energy initiatives.

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The fossil fuel lobby has ramped its push to put a halt to the rollout of renewables and instead reinforce the position of the incumbent coal and gas fired generators.

Just a day after the Abbott government intensified its attack on clean energy policies, re-submitting its attempt to dismantle the Clean Energy Finance Corp, leading mining groups and a former energy minister now taking his pay from the fossil fuel lobbyists have launched a blistering attack on efforts to reduce the amount of coal dug up and burnt in this country.

Rio Tinto led the charge, with its newly appointed head of energy Harry Kenyon-Slaney telling a conference in Sydney on Friday that it was time to abandon “idealistic discussions” about climate change, and accept that coal will remain the leading source of power.

“It is clear we can’t just wish away fossil fuels,” he was quoted as saying by the Australian Financial Review, a day after the company renewed its application to expand a major coal mine in the Hunter Valley.

Kenyon-Slaney also wants the renewable energy target to be wound back – claiming it is pushing up costs – and wants more government money to go towards carbon capture and storage.

His comments were echoed by former Energy Minister Martin Ferguson, now an advisor for the Australian Petroleum Production & Exploration Association, who also wants the RET watered down because it was “undermining” the national electricity market.

“The RET is distorting the proper price signals that the NEM (National Electricity Market) relies upon to attract efficient investment and to supply energy at the lowest cost,” said Ferguson, who supported the RET as a Labor minister.

His view echoes that of the coal and gas generators whose revenues and profits are being eroded because the renewable energy target is succeeding in lowering the wholesale price of electricity, as they all have admitted.

As if to highlight Rio Tinto’s own lack of faith in the CCS, Kenyon-Slaney said the company had invested $100 million in the technology. This from a company that earns billions from coal mining each year – earnings that most analysts say is at risk if the world get serious about climate change.

To put that investment into context,  a Perth-based start-up, Carnegie Wave Energy, has invested a similar amount in its new technology. It has yet to earn a dollar, but at least it has faith it will work.

The attack by Rio Tinto is interesting, given that the industry has recently abandoned its voluntary levy to fund low emission coal. That levy amounted to 20c a tonne of coal – a commodity which sells for between $80 and $100/tonne.

This came after US President Barack Obama called the coal industry’s bluff by proposing to enforce emissions legislation that would require carbon capture and storage. The coal industry responded by claiming that CCS was either impossible or too expensive.

Rio Tinto is also forgetting that most energy intensive industries are exempt from the RET, and have actually benefited from the fall in wholesale prices that the coal and fossil fuel generators say is caused by the introduction of wind and solar generation. Those exemptions have pushed an extra $7.1 billion in costs onto the household sector, according to some estimates. A similar impact has occurred in Germany, where renewable energy policies have brought down the wholesale cost of electricity – the benchmark for industry electricity contracts – by half.

In any case, many mining and manufacturing operations – such as Rio Tinto’s own Gove alumina refinery in the Northern Territory, rely on expensive diesel or gas for their power source. This was the case with Gove, which is to close because it can no longer afford those spiraling costs. Some miners are now looking at renewable technologies and hybrids in an effort to reduce fuel costs.

The Climate Institute was dismissive of the Rio Tinto claims.

“It is likely that Rio Tinto has put more money into burying sensible climate change and clean energy policy than it has put into carbon capture and storage,” deputy CO Erwin Jackson said in an emailed statement.

“Scientists and increasingly investors and analysts from the World Bank to the International Energy Agency are very clear we can’t ignore the physics of the atmosphere and only a small proportion of existing coal resources can be burnt if we are to avoid levels of climate change that would set back economic development in many nations.”

“Rio Tinto’s real concern is that globally around half of new power generation investment is now based on renewable energy and this eats into future growth in coal demand. In Australia, changing the Renewable Energy Target will have next to no impact on power bills on only really benefit companies who want to sell more coal power.”

 

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16 Comments
  1. Keith 6 years ago

    All that we do if we regress to coal, oil & gas is to make for a miserable catchup when the assets are stranded and we are penalised by countries who are basing their actions on concern for the future of human society.
    None of Tony Abbott’s posturing or the fossil fuel industry’s attempts to hold back the inevitable makes any sense in a rational dialogue.
    This is what Bernie Fraser, Ken Henry and Ross Garnaut are all saying (along with just about every other rational person who has reviewed the facts).
    It is sad to experience such a destructive and short term vision for the country.

    • howardpatr 6 years ago

      Rationale dialogue and Tony Abbott, the “Mad Monk” driven by his underlying belief in creationism, don’t go together.

    • Alen 6 years ago

      Even if they succeed in pressuring the Abbott government into slashing the RET, their future is in serious doubt (to put it nicely). Asia may be a big consumer of coal at present, but they are making strong moves towards expanding their renewable share. I don’t need to mention Europe’s coal reduction plans, and the US has strong clean energy push by numerous states, and Obama is making this into a nation-wide ambition. Australia is showing repeated demand drops, with plenty more (relatively cheap) efficiency technologies to be embraced by sectors, i.e. More drops in demand. Investors are now increasingly doubting, pulling out or refusing to risk their money in coal, so as I see it the coal industry has a bleak output (nicely put again) no matter how hard they pressure Abbott. Plus once Abbott is gone chances are a new phase of growth in renewables are on the horizon, with investors lining up left right and centre to harness Australia’s vast renewable energy sources.

  2. wideEyedPupil 6 years ago

    These people like Rio Tinto and the Liberal Party should be sent a damages bill every year for climate change damages to the economy, environment and health. They’d soon be bankrupt if they actually put their money where there mouth is.

  3. JohnRD 6 years ago

    Joe hockey”s budget would be looking a lot healthier if all the subsidies and tax breaks that the fossil carbon industry believes they are entitled to were ended.
    It is worth noting the Rio is one of the companies leading the charge to robotic mining. They can hardly claim to be job creators.

  4. George Takacs 6 years ago

    So this guy wants the RET wound back because he says it is distorting price signals, but then he wants the government to invest in CCS. Isn’t that also distorting price signals?

    • wideEyedPupil 6 years ago

      No because nothing will ever get CCS to be commercially viable and even the researchers working on it at Australia universities know hat and will privately admit it.

  5. johnnewton 6 years ago

    Seriously how long can they keep their heads in the tar sands?

  6. Martin 6 years ago

    “The RET is distorting the proper price signals..”
    What about the negative externalities of fossil and fissile fuels, Mr Ferguson? No price distortion there?
    (Note: Fissile fuels don’t play a role in the NEM yet, but that could be the next push.)

    • wideEyedPupil 6 years ago

      Ferguson uses words like distortion to a) sound like he studied economics and b) to protest interruptions to a sick industrial fantasy which he sold his soul for many moons ago.

  7. Christopher Nagle 6 years ago

    People have gone to war for much less than this. A climate change disaster will make the losses suffered in the world wars seem like entre for a far more terrible main course. The stakes now being played for on this are the largest ever placed. Our rhetoric needs to start reflecting this. We are all playing for keeps on the lives of future generations, if not our own. If these oligarchs cannot find it in their hearts to do the right thing, then we too must cloak our humanity and do what must be done to save ourselves.

    • Alen 6 years ago

      The direct international challenge for Australia will not come from war but rather the increased number of refugees, from low lying countries and regions, including the pacific island region. They are especially vulnerable from rises in sea levels and shift/reduction of rain patterns.

      • Bob_Wallace 6 years ago

        You guys are already getting your butts cooked.

        Is that not obvious to the average voter?

        • Alen 6 years ago

          If you are referring to the severe heat waves, bushfires or the nearly 2 year old drought happening, well the official prognosis from our government is “It happened before and is part of the Australian life”, what a load of BS. An el nino event is predicted to occur this year, which will make the fires and drought even worse next time around. I especially feel for the farmers who are now already struggling, and with this forecast will continue to struggle for quite a while yet. The FF-funded media campaigns pronouncing CC as a hoax will only guarantee their struggles will become more frequent in the future

  8. Christopher Nagle 6 years ago

    People have gone to war for much less than this. A climate change
    disaster will make the losses suffered in the world wars seem like entree
    for a far more terrible main course. The stakes now being played for
    on this are the largest ever placed. Our rhetoric needs to start
    reflecting this. We are all playing for keeps on the lives of future
    generations, if not our own. If these oligarchs cannot find it in their
    hearts to do the right thing, then we too must cloak our humanity and
    do what must be done to save ourselves.

  9. Alex 6 years ago

    Rather than forming a view on the basis of what Mr Kenyon-Slaney is reported to have said, I suggest that we should read what he actually said. His speech can be found here: http://www.riotinto.com/investors/presentations-91_10106.aspx

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