Hogsback looks into an unseemly spat

AN INTERESTING state of affairs is starting to emerge in Queensland, with state and federal leaders spraying vitriol at each other and a coal project put on hold as a result.

Tim Treadgold

It is not just a simple matter of state versus federal bickering either. There is a natural wonder of the world at stake.

Looking further ahead this could also have ramifications for the Australian coal export markets.

This has all got Hogsback’s attention.

According to The Australian, Queensland Premier Campbell Newman and Australian Prime Minister Julia Gillard have been exchanging harsh words.

Gillard has accused Newman of breaching an agreement with the federal government by approving a $6.4 billion Galilee Basin coal mine without properly investigating the environmental impact.

That the mine is linked to Gina Rinehart, who is far from flavour of the month with Gillard, makes this little imbroglio all the more delicious.

Newman, meanwhile, has called on Gillard to pull her “rogue minister” into line.

The rogue minister in this case is federal Environment Minister Tony Burke. Not exactly the first name that springs to mind when the term “rogue” is bandied about.

The Alpha coal and rail project is expected to produce 30 million tonnes of thermal coal a year. It is being developed by Indian giant GVK and Rinehart’s Hancock Prospecting.

Should the project go ahead, and Das Hog certainly is of the mind that it should, then it will add to the pressure that will be brought to bear on the Great Barrier Reef.

There is a dedicated channel through this natural wonder and some of the most skilled ship handlers in the world to make sure the ships stick to it.

Even so, there are concerns mounting that the increased amount of shipping will pose problems for the reef.

Think of the number of ships that will be required to shift the Alpha coal. Then there is Clive Palmer’s China First coal project to factor into the mix.

Add to that the ships that will be carrying liquefied natural gas from Queensland and there is a fair bit of steel going through quite a narrow bit of real estate.

All it will take will be one accident and a vital shipping route could be closed off, with all the massive headaches that will cause for existing coal exporters.

So there if a fine balance to be met by both the Queensland and Australian governments to ensure that the reef is protected while the various resources exports are allowed to continue.

And continue they must.

While this is still a few years down the track, Australia needs to factor in that it will be facing increasing competition for Asian coal customers.

There are a host of projects in Mongolia that have to be considered.

Then there are the US coal miners.

Coal companies there are pushing to get greater coal export facilities established on the west coast to capitalise on the burgeoning Asian market.

It’s not like they are fighting off coal buyers at home.

Just yesterday there was an article in the Financial Times about how US power generators switching to gas was hitting coal. The latest in a long line of reports on how tough US coal miners are doing it.

To grow their export markets though the US coal diggers have to negotiate their own environmental players – which includes the Sierra Club – and an anti-coal government.

Added to that is the risk, albeit very small, that some right wing Congressman will try to restrict coal exports because it is a strategic mineral. Unlikely, sure, but The Hog has seen this particular kettle of crazy stirred before and it does not make for a pleasant brew.

All in all, some interesting times ahead.

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