Last stand against the CPRS

WITH the Senate headed for a showdown over the Carbon Pollution Reduction Scheme next week, a war of words has erupted between coal companies and the Construction Forestry Mining Energy Union on the controversial proposal.

Blair Price

The CFMEU is claiming that at least 10,000 coal mining jobs will be created by 2020 under the scheme.

The union, which expects fewer than 20 coal mines will need to be compensated under the CPRS, held meetings with the federal government and the Opposition yesterday.

This week has seen the release of a union-commissioned report titled Coal Hard Facts, in which consultancy McLennan Magasanik Associates reviews the reports made by ACIL Tasman, Concept Economics and Access Economics, which all forecasted thousands of coal mining job losses under the scheme.

ACIL’s report forecast 3300 job losses by 2021, Concept Economics expects 9040 by 2020, and Access Economics predicted 6470 jobs would go from the black coal sector.

But the union believes these job losses would actually be from future coal industry employment.

“The so-called job losses are not from current levels of employment, but from much higher projected levels of employment that have generally been based on a continuing resources boom,” the CFMEU said.

MMA referenced the National Institute of Labour Studies 2008 report, published before the CPRS was launched, which predicted coal mining jobs would grow from 35,800 in 2008 to 54,700 in 2020.

“Deducting forecast job losses from the CPRS for each of the three reports from this reference scenario shows that employment not only grows in coal mining, it grows strongly,” the union said.

“Consultants MMA concluded that, using the same reports used by the coal companies to claim job losses, there would be between 10,000 and 16,000 more coal mining jobs in 2020 under a CPRS.

“That’s substantial growth on the 35,000 in the industry at the peak of the resources boom.”

What the coal industry thinks

Despite all the forecasts made by consultancies and campaigns by industry groups, Anglo American has already warned of mine closures, while this week Australian coal producers revealed specific criticisms of the scheme.

Macarthur Coal chairman Keith De Lacy summed up his views at his company’s annual general meeting, reminding the audience that no one else in the world would have to pay for the fugitive methane gas emissions from coal mining.

He said the CPRS would have a great impact on Macarthur’s competiveness and viability, and that it would not help the environment as global consumers would substitute Australian coal with alternative quality coal.

Open cut coal mines haven’t had to test for gas emissions before, with De Lacy saying Macarthur couldn’t measure or capture emissions yet.

GeoGas chief reservoir geologist Joan Esterle discussed the technical challenges to ILN a few months ago, which include detecting and accurately measuring small gas volumes at these mines.

Another challenge was the assignment of gas content to “non-coal” stratigraphy and determining when or which rocks contained no gas and at what depths.

Whitehaven Coal this week questioned whether closing Australia’s export coal industry would have an impact on global carbon emissions, and if there was anything Australia could do that was likely to have a significant impact on global energy or raw materials consumption.

In the recently released Coal and the Commonwealth study, commissioned by Peabody Energy and edited by University of Queensland professors Peter Knights and Michael Hood, concerns were raised that China might seek cheaper and more polluting coal under the CPRS.

“It is therefore in the world’s best interests to continue to make low-emission Australian coal available at competitive world prices,” Knights said.

Back in September, Anglo American chief executive Cynthia Carroll warned the federal government could lose more than $A1 billion in royalties under the scheme from the premature closure of two major mines.

In the previous month Xstrata Coal group executive Mick Buffier said the CPRS was a major impediment to future investment and needed to be aligned to other nations.

“Coverage of fugitive emissions from coal mining has not been attempted anywhere globally,” he said at the NSW Mineral Exploration & Investment conference.

While negotiations between the Coalition and the federal government have exempted the agricultural industry from the scheme, it is still not clear whether a complete compromise deal will be struck.

The CPRS was shot down by a 12-seat Senate margin in August.

If the CPRS, in its current form, is blocked again, the Rudd government will be able to call a double dissolution and therefore call an early federal election.