Coal mining will outlast green hysterics

More than 361 coal-fired power stations have been built by the Chinese since 2002, and 65,000 megawatts (MW) worth of new facilities are under construction. A further 100 stations are planned. About one coal-burning plant is being added to China’s supply capacity per week. Although China mined 2.2 billion tonnes of thermal coal last year, imports have had to rise from two million tonnes in 2001 to 31 million in 2006. The forecast is 36 million this year and 50 million by 2012.

Nor have other countries called a halt. The US has added 27,000 MW of coal-fired capacity since 2002 and plans to develop another 37,700 MW by 2012. In the meantime, Kyoto-signing Europe added 25,000 MW over the last five years and plans an extra 13,000 MW by 2012. And India has projects adding up to 38,000 MW. Overall, 37 countries have plans to build more coal-fired plants, says Piper. By 2012, the world will have 7,500 coal-fired stations in 79 countries.

In short, coal powers 40 per cent of the world’s electricity production and the International Energy Agency projects demand to double by 2030.

Will any of this change if we pull the plug? Not much.

Recently, the prestigious Massachusetts Institute of Technology (MIT) published a wide-ranging study, The Future of Coal. The study points out that “in contrast to oil and natural gas, coal resources are widely distributed around the world”, and “coal reserves are spread between developed and developing countries”. One fundamental conclusion: “we believe that coal use will increase under any foreseeable scenario because it is cheap and abundant”.

While we are the leading coal exporter, moreover, according to US Department of Energy estimates we only have 8 per cent of the world’s reserves. The largest reserves are concentrated in the United States with 26 per cent and the Former Soviet Union with 23 per cent, followed by China (12 per cent), Germany (7 per cent), South Africa (5 per cent), Poland (2 per cent) and many other countries with smaller shares. Clearly, there are ample substitutes should we pull out.

What can be done? Despite reports that John Howard is negotiating an APEC linked regional emissions trading scheme, the Chinese Government, for one, won’t kick the coal habit any time soon. The Communist Party’s hold on power depends on continuing growth at breakneck speed.

As China specialist David Lambton pointed out in an article republished by the AFR (from Foreign Affairs), “Beijing’s priority is sustained, rapid growth, because growth is fundamental to the regime’s legitimacy - and most everything else”. Hence, last month’s National Climate Change Assessment Report, a document released by China’s top economic planning body, rejected “absolute and compulsory” caps on the country’s greenhouse gas emissions.

Nevertheless, the MIT study expresses confidence that “carbon capture sequestration (CCS) is the critical enabling technology that would reduce [carbon dioxide] emissions significantly while also allowing coal to meet the world’s pressing energy needs”. The study estimates that a carbon emission price of $30 (US) per tonne would make CCS cost competitive. The crucial problem is whether the world’s major emitters can be persuaded to implement such an impost, and what form it should take. If, as we have argued, global emissions trading proves to be a pipedream, the only alternative is some type of international agreement - a sort of supersized AP6 - mandating co-operation in the development, dissemination and application of technological improvements.

For such an agreement to emerge, coal suppliers need to be backed by democratically accountable governments, prosperous wealth generating economies and technically skilled populations. In other words, by countries like Australia.

Now there’s an alternative perspective for you. If we want to have a real, as opposed to just a symbolic, impact on stabilising atmospheric carbon, we should think about expanding, rather than contracting, our share of the world’s coal supply.