Australia, Climate Change and the Coal Industry
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Dr Adam Lucas Science & Technology Studies Program University of Wollongong 1. International context for GHG emission reduction 2. Coal & climate change in Australia 3. Coal consumption in Australia 4. Coal mining’s contribution to Australia’s economy 5. Global trends in coal production & consumption, 1980-2010 6. Australian coal production, 1910-2010 7. Coal reserves & ‘peak coal’ 8. Australia’s role in coal export trade, 1900-2010 9. Australia’s coal trade with Asia & Europe, 1970-2010 10. Conclusion INTERNATIONAL CONTEXT FOR GHG EMISSION REDUCTION Current CO2 level → COAL AND CLIMATE CHANGE IN AUSTRALIA Per capita GHG emissions (2006): Australia – 28.1 tonnes US – 20.6 tonnes UK – 11.0 tonnes OECD average – 14.4 tonnes World average – 6.6 tonnes Fugitive CO2e emissions from coal mining, 1990-2009 CO2e emissions from electricity generation by fossil fuels, 1990-2009 http://www.climatechange.gov.au/sites/climatechange/files/documents/03_2013/nggi-quarterly-2010-dec.pdf ¡ Australian domestic emissions around 1.8% of global emissions, with 0.3% of world population. ¡ Domestic & overseas consumption of Australian coal responsible for more than 2% of global emissions. ¡ Black coal export emissions 130% of domestic emissions. ¡ Coal industry responsible for 3.6% of GDP (historic high). ¡ If coal export emissions added to domestic emissions, total contribution to global CO2 emissions in excess of 4.3%. ¡ Plans to triple or even quadruple coal export volumes over next 10 yrs: Australia’s total contribution to global GHG emissions will grow to around 9% to 11% by 2020, discounting export LNG & CSG. ¡ Australia uses twice as much coal to generate electricity than world average. ¡ Third highest in world as proportion of total electricity generating capacity: § between 80% & 84% of Australia’s electricity comes from coal-fired power stations; § less than 70% of China’s electricity comes from coal; § around 50% of US electricity comes from coal; § only 40% of world electricity generated by coal; § Poland & South Africa only countries using more coal to generate electricity. ¡ Produce 33% of national emissions (50% in NSW). ¡ 24 coal-fired power stations produce 97% of locally generated coal emissions (15 in NSW). ¡ Responsible for emitting 190 million tonnes of CO2 annually: § equivalent to 40 million cars § 3 x size of Australia’s car fleet § 1/4 of China’s total car fleet in late 2008. 900 800 TOTAL DOMESTIC EMISSIONS 700 (incl. LULUCF) 600 Domestic fossil electricity generation 500 Domestic black coal-fired 400 electricity generation Coking coal exports 300 200 Thermal coal exports 100 Total coal exports 0 1. Destruction of native vegetation, waterways & wildlife habitats by open-cut mining developments & operations. 2. Unintentional fracturing of bedrock by longwall drilling beneath waterways & water catchment areas. 3. Contamination of rivers & estuaries by mine tailings & saline wastewater from coal-fired power stations. 4. Inadequate industry investment in housing & social infrastructure for coal mine workers & their families. 5. Higher risk of cancer & respiratory disease for: § coal miners & coal mining communities from inhaling & ingesting mine tailings & coal dust, § populations living close to coal-fired power stations from inhaling waste & flue gases & air- borne particulates. Kjellstrom, et al., 2002; Lockwood, et al., 2009; Biegler, 2009; ATSE, 2009; Castleden, et al., 2011; Fowler & Cronau, 2012; Munro, 2012. COAL CONSUMPTION IN AUSTRALIA 5000000 4500000 Railways 4000000 Gas Electricity Generation 3500000 Metal processing & trades 3000000 Textiles 2500000 Coke 2000000 Food Processing 1500000 Cement 1000000 Hospitals Bunkers (shipping) 500000 Brick & Pottery 0 1943 1945 1947 1949 1951 1953 1955 1957 1959 40000 35000 Electricity 30000 Generation Iron & Steel 25000 Industry Metallurgical 20000 Coke (other) Railways & Gas 15000 Works Cement Industry 10000 5000 Other Consumers 0 TOTAL 1974 1970 1978 1950 2010 1958 1954 1982 1962 2002 1990 1986 1998 1994 1966 2006 80000 70000 60000 New South Wales 50000 Victoria Queensland 40000 South Australia 30000 Western Australia 20000 Tasmania 10000 AUSTRALIA 0 1974 1970 1978 1950 2010 1958 1954 1982 1962 2002 1990 1986 1998 1994 1966 2006 80000 70000 Electricity 60000 Generation Iron & Steel 50000 Industry Metallurgical 40000 Coke (other) Railways & Gas 30000 Works Cement 20000 Industry Other 10000 Consumers 0 TOTAL 1974 1970 1978 1950 2010 1958 1954 1982 1962 2002 1990 1986 1998 1994 1966 2006 60000 40000 20000 50000 30000 10000 70000 0 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 AUSTRALIA South Australia New South Wales Western Australia Queensland WA Electricity 7% SA Steel Industry Other 2006 8% 1% SA Electricity 5% NSW Electricity 41% Qld Electricity 34% NSW Steel Industry 4% COAL MINING’S CONTRIBUTION TO AUSTRALIA’S ECONOMY PERCEPTION REALITY ¡ Mining contributes 35% of ¡ Mining contributed 11.3% of GDP. GDP in 2011/12 (100 yr record). ¡ Mining industry employs ¡ Mining industry employed around 16% of Australia’s 1.9% of workforce in 2010/11: workforce. (100 yr record). ¡ Australia’s mining assets ¡ Australia’s mining assets 83% 53% controlled by foreign controlled by foreign companies. companies. Sources: Australia Institute, June 2011; DIICCSRTE, 2013 Source: ABS Yearbook 1988 100 120 60 40 80 20 0 1980-81 1982-83 1984-85 1986-87 1988-89 1990-91 1992-93 1994-95 1996-97 1998-99 2000-01 2002-03 2004-05 2006-07 2008-09 Manufacturing Agriculture Mining Coal Services 160 140 100 120 60 40 80 20 0 1977-78 1979-80 Coal export revenueaverage, 1980-2010: 10.13% 1981-82 Coal mining % of GDP, 1980-2010: 2–4%p.a. Coal mining %ofGDP, 1983-84 1985-86 1987-88 1989-90 1991-92 1993-94 1995-96 1997-98 1999-00 2001-02 2003-04 2005-06 2007-08 2009-10 Mining Agriculture Manufacturing Coal 60000000 40000000 20000000 50000000 30000000 10000000 70000000 0 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 Metallurgical TOTAL Steaming Australian coal industry employed more than 54,000 people at height of mining boom, compared with: § Bunnings hardware - 30,000 people; § McDonald’s restaurants - 75,000 people; § Great Barrier Reef tourism - 60,000 people; § Australian tourism industry – 500,000 people; § Australian agricultural industry – 300,000 people. Kennett Government sacked 50,000 public servants, 1992-1994; Howard Government sacked 25,000 public servants, 1996-1998; Howard Govt oversaw 108,000 jobs lost in manufacturing, 1996-2007 ― Australia 45,000 ― NSW ― QLD 40,000 ― SA 35,000 ― WA ― TAS 30,000 ― VIC 25,000 20,000 15,000 10,000 5,000 0 1975 1915 1935 1970 1955 1925 1910 1930 1950 1965 2010 1985 1945 1995 1920 2005 1980 1940 1960 1990 2000 20000 30000 10000 25000 15000 5000 0 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 Victoria Tasmania New South Wales Australia Western Australia Queensland 20000 30000 10000 25000 35000 15000 5000 0 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 Tasmania South Australia New South Wales Australia Western Australia Queensland ¡ BHP-Billiton (UK-Australia) ¡ Rio Tinto (UK-Australia) ¡ Xstrata (Switzerland) ¡ Anglo American (UK) § responsible for more than 75% of the country’s coal production & exports. § None of these companies are majority Australian owned, so most of their profits go offshore. § According to Australian Greens, 71% of mining profits go overseas. § According to Australia Institute, 83% of mining profits go overseas. Black Coal Revenue Black Coal Subsidies & Externalities Royalties to state $1.6 billion Direct government $1.7 billion governments subsidies Wages & salaries $2.692 billion Indirect infrastructure $1.1 billion subsidies in NSW Employer superannuation & $314 million Indirect infrastructure $1.1 billion (?) workers compensation subsidies in Qld Purchase of goods & $3.298 billion Climate change & health $2.6 billion materials effects Repairs & maintenance $1.156 billion Water consumption unknown Freight & cartage $1.738 billion Pollution of waterways unknown Contracts & commissions $3.21 billion Undermining waterways unknown & aquifers Motor vehicle running $40 million Destruction of native unknown expenses habitats & ecosystems Rent, leasing & hiring $309 million Inadequate housing & unknown services social infrastructure Operating profit before tax $9.998 billion Structural distortions unknown created by mining boom Total annual revenue $29.9 billion Total annual More than subsidies & externalities $6.5 billion Estimate of coal mining revenue which Estimate of coal mining’s direct economic remained in Australia benefit to Australia Less than $9.36 billion $2.86 billion 2005-06 Support for: Million Australian dollars Coal 1,091 - 1,866 Oil 3 Gas 120 Total fossil Fuels 1,214 - 1,989 Renewable Energy & 110 - 119 Energy Efficiency Source: C. Riedy, Energy & Transport Subsidies in Australia, Institute for Sustainable Futures, 2007. GLOBAL TRENDS IN COAL PRODUCTION & CONSUMPTION 1980-2010 Country Coal Production Global Share of Total (millions of short tons) Production 1. China 3,362.1 43.8% 2. United States 1,072.8 14.0% European Union 739.9 9.6% 3. India 611.4 8.0% 4. Australia 440.1 5.7% 5. Indonesia 332.4 4.3% 6. Russia 327.1 4.3% 7. South Africa 272.6 3.5% 8. Germany 203.7 2.7% 9. Poland 148.3 1.9% 10. Kazakhstan 111.9 1.5% Source: US Energy Information Administration, International Energy Statistics, “Coal: Production, 2009”. Sources: US Energy Information Administration, International Energy Statistics, “Coal: Production,