Hogsback explores irony in coal-fired power

PITY the politicians. The poor darlings just don’t know what to do with coal. One minute it’s a friend, the next it’s an enemy, as Hogsback has been observing this week on both sides of the Indian Ocean.
Hogsback explores irony in coal-fired power Hogsback explores irony in coal-fired power Hogsback explores irony in coal-fired power Hogsback explores irony in coal-fired power Hogsback explores irony in coal-fired power


Tim Treadgold

In South Africa, where some of the world’s top mining executives have gathered for the annual Mining Indaba gabfest, there is a debate raging about a government plan to limit exports and launch a state-owned coalmining company dedicated to meeting domestic demand.

In Australia, there is a growing debate about how to enforce “clean coal” rules on the power industry without also forcing up the price of electricity, a task which might require divine intervention because it’s unlikely that any human will ever solve that puzzle.

The common thread linking these seemingly separate events is the need for politicians around the world to recognise that the night could be awfully dark, and factories awfully quiet, without coal.

In Cape Town, where government and business have been mixing over cocktails on the waterfront and an occasional visit to the nearby conference centre, the argument is about how to get more and better quality coal delivered to domestic power stations.

No talk there about cutting coal production, or enforcing new standards on coal-fired power stations. It’s all about more coal, not less, with the politicians leading demands that mining companies speed up the mining and delivery process – though in a typically ham-fisted way.

In one outburst, South Africa’s Minerals Resources Minister, Susan Shabanga, threatened to impose regulations limiting exports to ensure more coal is available for power generation in that country.

Hogsback will not bore readers with the full South African debate. You can do that elsewhere, but the essential issue is that South Africa wants to burn more coal, not less.

In Australia, it’s the flipside, with the federal government agonising over plans to enforce so-called clean coal regulation which could involve banning, or even closing, old power stations because they do not meet modern environmental emission rules.

During the week one of the biggest coal miners, Rio Tinto, had its say in an increasingly angry debate about how to manage Australia’s coal-fired electricity industry, with a senior executive warning that current policy could force up power prices and put jobs at risk.

David Peever, managing director of Rio Tinto Australia, played the “costs and jobs” card to counter the claims being made by the Australian government’s close friends in the green movement that ever-tougher emission rules are required, even if it means forcing coal out of the power generation equation.

If the Australian Greens’ arguments were not being listened to by government they would be laughed out of the debate. But, because Australia has a hung Parliament, where the government depends on Green support, the anti-coal case is getting a hearing.

Amusing isn’t it. On one side of the Indian Ocean there is a government demanding more coal for electricity production, all the way up to forming its own coal mining company which is expected to deliver its first coal in the next 18 months, while on the other we have a government trying to distance itself from the coal industry, and cut coal production.

Politics, not commonsense, is the driver of both the South African and Australian coal debates.

The South Africa issue is all about getting electricity to impoverished townships and in propping up local industry to try and reduce an unemployment rate estimated to be around 30%, but perhaps higher. The only way to do that, according to Ms Shabanga, is to cut coal exports and force its delivery to local power stations.

The problem with that position is that cutting exports also reduces South Africa’s ability to earn much-needed foreign income which, in turn, cuts jobs.

The Australian position, which seems to be the exact opposite of what’s happening in South Africa, has the same effect on the local economy – fewer jobs because electricity prices will rise with the enforcement of clean coal rules and the possible closure of old power stations.

In the middle, orchestrating this cacophony of conflicting regulations, are the politicians of both countries who are struggling to balance the demands of the people they represent, without stuffing up the economies they run.

And, before anyone dashes off a letter to Hogsback pointing out the ultimate irony in the South African v Australian coal debate it is painfully obvious that whatever Australia does to cut emissions will be more than made up by South Africa boosting emissions.

What’s even more amusing is that South African emissions eventually end up in Australia courtesy of the prevailing westerlies which blow all-year round across the Southern Ocean – something that no politician will ever change.