Frydenberg coal comments signal no change to Coalition fossil fuel plans

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As fossil fuel divestment gathers pace, Australia’s new energy minister signals Turnbull Coalition still wedded to coal development.

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If Australia’s new Prime Minister and refreshed front bench are showing signs of being more progressive about renewable energy investment and R&D, it looks like they are also going to be far more candid about coal, and their plans to invest heavily there, too.

In interview with Fairfax media on Wednesday, the newly sworn in energy and resources minister Josh Frydenberg was crystal clear on the government’s intent to use taxpayer money from its $5 billion Northern Infrastructure Fund to help get the Adani-owned Carmichael coal mining project off the ground.

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And he was equally clear that the Turnbull government’s attitude to developing new coal projects – despite the smart money being on all untapped fossil fuel resources staying in the ground, and despite the fact that most banks and institutional investors won’t touch the Galilee Basin project with a 10 foot barge pole – remains the same as the Abbott government’s.

“[Carmichael coal mine is] a very important project, which will see significant investment in Australia and provide electricity to millions of people in the developing world,” Frydenberg told the AFR, repeating the mantra of his former boss.

“Anti-development activism can create major delays in projects and send investment offshore, and you have to be very conscious of that when there are such large time frames involved and we are competing internationally for investment in this country,” he said.

The trouble is, the sort of investment Frydenberg sees Australia competing for is looking more like divestment to the rest of the world, with a new report showing that there is now an estimated $2.6 trillion in coal, gas and other fossil fuel assets set to be dumped from the investment portfolios of 430 institutions and 2,040 individuals aroScreen Shot 2015-09-23 at 12.49.47 pmund the world.

As we report here, the data from US consultancy Arabella Advisors reflects the increasingly convincing economic argument for avoiding fossil fuel investments, as the world’s carbon budget tightens in the fight against climate change, and as renewable energy technologies fall in cost.

Or as the managing director of SRI Wealth Management Group, Thomas Van Dyck, put its: “The Arabella Report shows that more and more investors are reducing their carbon risk today and diversifying their portfolios with the goal to harness the upside in the sustainable clean growth industries of the future.

“That underscores what I see every day as a financial advisor–that the demand for fossil-free investment products is increasing.”

The Abbott government, of course, never quite caught on to this investment trend.

Turnbull, a one-time merchant banker, appears to see the upside to investment in renewable energy. But his energy minister’s comments about Carmichael suggest the Coalition is still blinkered to the growing list of serious downsides – not least of all for the earth’s climate – attached to investment in new coal mines.

Interestingly, new research from The Australia Insitute shows that the Coalition government is increasingly on its own in this regard, with between 65 and 78 per cent of voters showing support for the redirection of government subsidies for the fossil fuel and mining industries – currently totalling about $7 billion a year – into essential services like education and health.

TAI said on Wednesday that a survey had asked voters across Australia, and in several key electorates, “Would you support or oppose taking the subsidies that federal and state government currently give to the mining industry and redirecting them to essential services like hospitals and schools?”

“Whether in the coal mining seat of Newcastle (69% support), the regional seat of New England (76%) or the bellwether seat Eden Monaro (77%) – it’s clear that voters prioritise services over subsidies to mining and fossil fuels,” TAI executive director Ben Oquist said.

“The polling shows that Malcolm Turnbull and his new Minister have an opportunity to embrace new economic leadership that would simultaneously be popular, good for the budget and the economy.”

“Using taxpayers money to fund commercially unviable infrastructure projects through the $5 billion Northern Australia fund makes no sense economically, or politically.

“It’s refreshing that Malcolm Turnbull is not the anti-renewable energy activist that Tony Abbott was, but a big new subsidy for coal would clearly undermine the new PM’s climate credentials,” Oquist said.

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13 Comments
  1. Sustainabilitynow 3 years ago

    Same old horse, just a new jockey.

  2. Ken Dyer 3 years ago

    Dear Mr Frydenberg, According to “The Hindu”, a leading Indian newspaper, Adani Power Ltd reported a consolidated net loss of Rs 417.58 crore for the quarter ended June 30, 2015. That is over US$63,000,000. Adani’s shares dropped over 2 percent.

    I am sure that when you read this, you may think twice about throwing good Australian taxpayers’ money after what is clearly a bad investment. Why do you think all the leading banks around the World will not finance Adani?

    Can I suggest you have a chat with our PM who as we all know, knows how to make a buck. I am sure that he will quickly acquaint you with the realities of business finance and the folly of throwing your money away on bad investments, particularly those whose product price is declining rapidly with no prospect of turning a profit in the future.

    You and your collegues would be better advised to consider exploiting the giant fission reactor that floats across our skies every day and provides a continuous 174 petawatts of energy to Earth free of charge. What’s more, it will keep on giving for billions of years to come. All you have to do is find some funds to create a sustainable industry to exploit this free resource.

    Perhaps you might consider redirecting those funds from the Adani Carmichael mine.

    Yours rationally
    A taxpayer.

    • Pedro 3 years ago

      Ken, a good letter. Hope you are going to send a copy to Mr Frydenberg.

    • Peter Campbell 3 years ago

      Fusion reactor, actually!

    • johnnewton 3 years ago

      Definitely send it. But you know what? It’ll make no difference. The fix is in. “You get to be PM But we get to continue mining. OK Malcolm?”

      • Ken Dyer 3 years ago

        Hi John, every little bit helps as the monkey said as he s**t over the edge of the open cut mine. Everybody needs to bombard the MP’s with considered, polite emails about the coming demise of coal. For example, I forwarded an email from http://www.coalwire.org to Josh Frydenberg (email to:[email protected]) and Greg Hunt (email to: [email protected]). Now I reckon if enough people did the monkey thing, eventually they have to take notice.
        What do you reckon? it is a lot more satisfying than blowing hot air on these forums.

        • johnnewton 3 years ago

          Agree completely Ken. I’ll also send it. I’ve been advocating and doing the same foe a couple of stories from The Conversation, sending them to Turnbull’s twitter account (we follow each other, blush). Actually email is maybe better but all I get when I do that is a polite form letter. Still, enough monkeys..

  3. Rob G 3 years ago

    Should Shorten get in will he do a Daniel Andrews and halt the government investment – and wear the costs for the greater saving…. That would be a real sign of strength.

  4. Phil Patterson 3 years ago

    Can someone please tell me when the inevitable happens and the Adani project is officially killed off due to the fact that India’s coal imports have officially peaked and are now in what’s assumed to be permanent, structural decline and their investment in solar, wind and hydro is going through the roof, in line with their long-term energy goals, just what the hell they’ll actually DO with this fancy new extended railway?!! Seriously, I’m all ears.

    • nakedChimp 3 years ago

      Can you put tourists on it and drive them back and forth on that railway?

  5. JohnRD 3 years ago

    Government’s that get sucked in to being the investor of last resort usually waste tax payer money. Doesn’t help them win votes.

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