Kohler: Abbott’s clever climate change policy
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Against all expectations, Tony Abbott and Greg Hunt have actually come up with a clever climate change policy, and certainly one that will change the debate in Australia. Prime Minister Kevin Rudd will now have to quickly do a deal with the Greens to get a government scheme through parliament, or else simply give up and blame everyone else. With the failure at Copenhagen having pulled the rug out from under him, and a global agreement on emissions trading now impossible this year, Kevin Rudd must avoid a 2010 election on his current CPRS at all costs. To do that by dealing with the Greens now would mean a two-year carbon tax eventually turning into an emissions trading scheme – a big risk. The clever, pinpoint focus of the new Coalition policy that the Shadow Minister for Climate Change, Greg Hunt, has come up with, was actually lost yesterday amid the wildly incoherent antics of politicians back from holidays at the start of an election year. In fact it’s quite simple: the coalition is proposing to pay the Latrobe Valley companies to convert from brown coal to gas. There are a few other ideas tacked on to make it look like a policy, not a deal, but that’s the guts of it. It’s a good idea – first proposed in Business Spectator last November. I’m not sure the amount of money nominated – a total of $3.2 billion, with up to $2.55 billion available for power station conversion – will be enough, but it’s an opening gambit. Hunt spelled it out towards the end of yesterday’s press conference when the journalists were nodding off listening to Tony Abbott, so what he said has been largely ignored. He said: “One of the large power companies has provided us with their advice. Because it’s commercial-in-confidence, they didn’t want it released – but they provided us with their advice that they could convert from coal to gas for $13 per tonne under this system. “Now we want to check that, but … the oldest and least efficient of the power providers has said to us that under the government’s ETS we’re just not going to be able to afford the capital to transition because we will be struggling just to survive… Under this they’ve said that if our balance sheets are clear and there’s an incentive to change from coal to gas, this is very attractive and we are more likely rather than less likely to change under this system.” Australia’s oldest and least efficient power station is Hazelwood in Victoria’s Latrobe Valley, owned by International Power of the UK and the Commonwealth Bank (8.2 per cent). In fact, in 2005 it was nominated the least efficient power station in the world. Yallourn, owned by China Light & Power subsidiary, Truenergy, is next. If Hazelwood and Yallourn convert from brown coal to gas, Australia’s greenhouse gas emissions would drop by 5 per cent, as required. Job done. Presumably Tony Abbott didn’t just announce a deal with the owners of Yallourn and Hazelwood because firstly Greg Hunt didn’t have to enough time to negotiate one, and secondly because saying you’re going to hand over large dollops of cash to Hong Kong and British companies is not as good politically as saying “No Great Big New Tax” over and over (and over). So instead they announced an “Emissions Reduction Fund” to provide “direct incentives to industry and farmers to reduce CO2 emissions”. The fund would start with $300 million in 2011-12, rising to $1 billion in 2014-15 – a total of $2.55 billion. Companies would apply for cash (this means you, International Power and Truenergy – just tell us what you need). It is, of course, just a Great Big New Tax since the money will have to come from somewhere, but at least it can be disguised. Meanwhile the government’s policy will be a general carbon tax, eventually turning into an ETS, and raising a lot more money than $2.5 billion. Some of that money will go to Latrobe Valley power companies for conversion to gas (but not enough they say) and the rest will go to some businesses and consumers – in marginal seats of course – to compensate them for the tax. The coalition’s policy will have the benefit of being small and targeted, while the government’s will have the benefit of being big enough to generate cash for a lot more voters than those living in the Latrobe Valley. But while the government’s scheme used to also have the benefit of being an ETS, in line with the global movement towards emissions trading, that movement has now stalled. If that global process doesn’t restart soon, the government will be a shag on a rock with a new tax around its neck. |
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23 Comments
A “clever climate change policy”???How can you say that, when the biggest polluters will be able to keep polluting at today’s levels? How can any rational person call that a policy? Who are you representing Allan? Your masters? Not some decent and common care for the rest of us or the planet!
The big polluters and others have had at least 10 years to adopt practices that don’t allow filth to spew out over the land and contribute to illnesses and global warming - they chose not to? Why? Greed?No wonder the mining companies and their supporters(you?) think Abbott’s ‘policy’ is OK? If it wasn’t so serious it would be laughable!
Now the wealthy will always be able to ensure that the air they’ll breathe will be OK, because they’ll be able to afford it, but the rest of us??? And our kids and grandkids? What about the millions who’ll lose their countries altogether? Most of them are black, so they don’t count do they? It’s not as though they’re real people is it?
Haven’t we heard about this “coal to gas” conversion before? Isn’t this the scheme whereby the generator still mines the same brown coal but they feed it into some sort of pressure cooker between the mine and the power station - to remove water and “convert” (I use that expression very advisedly) the brown stuff into something less brown called “gas” - and ultimately the whole lot gets burnt?
I know the writer is closer to economics than physics and chemistry but isn’t there some sort of verbal sleight-of-hand here? What is the whole-of-process change in carbon emissions?
Oh dear…..
The juvenile sillies are going to dial up to full-mouth-foaming apoplexy mode.
Kohler is just plain wat too sensible for the Crikey commentariat.
Besides Kohler puts Bern-I-prefer-Rudd-to-sex-Keane in harsh relief.
I get the sense that Their ABC thinks Alan is problematic when he dares to stray of the business reservation and apply an unbiased rational mind into matters political.
Hide with the serious people at Busness Spec Alan…… you are in grave danger.
@Hugh (Charlie) McColl
“…Isn’t this the scheme whereby the generator still mines the same brown coal but they feed it into some sort of pressure cooker between the mine and the power station - to remove water and “convert”…”
No…it’s nothing like that at all.
However, UCG is still an unproven commercial technology.
Actually, coal-to-gas IS like that, but a bit more complicated:
“There are two methods of producing [gas] from coal. One method uses the partial oxidation of coal with oxygen and steam as gasifying agents to produce synthesis gas (carbon monoxide + hydrogen) followed by a methanation process. This technology…has a low thermal efficiency (63%) and is expensive.
…
The other method…is coal hydrogasification. This process is based on the reaction of coal with hydrogen at high pressures and temperatures. This produces methane direct and has thermal efficiency of 77.5%”
From here: http://www.australiancoal.csiro.au/pdfs/japan_mkt.pdf
And can someone ask JamesK why Rudd’s ETS is an egregious burden on taxpayers but the billions required for Abbott’s pay-the-polluters scheme isn’t? Every time I challenge him to clarify an argument he runs away from the thread and won’t come back, so maybe someone he isn’t afraid of can get him to do it.
Thanks for the heads-up, Alan. Your interpretation is either the product of paranoia or a logical analysis based on past behaviour of the individuals concerned.
I favour the second… who would want as a next-door neighbour, a son-in-law or an associate any of the front bench of the Lib/Nat side of the House? Unfortunately, Alan, you have it right. They have runs on the board for being duplicious, deceptive, cynical lusters after power.
So have the other side, but its not Labor proposals for climate change management that The Mad Monk was discussing, was it?
You’ll have to make sure Brumby doesn’t export the brown coal to India…
But AK is right. The idea has been around for a long time. There are many reasons apart from AGW to close down brown coal- destruction of Gippsland for a start. And the complex filth- the real pollution- that emanates from these power stations.
Two gas plants are lined up for western Victoria right now.
The environment could be the winner- AGW has distracted everyone from real environmental degradation, ruthless exploitation etc.
@Sancho
“…And can someone ask JamesK why Rudd’s ETS is an egregious burden on taxpayers but the billions required for Abbott’s pay-the-polluters scheme isn’t?…”
Are you aware of the cost numbers involved?
Kevin Rudd: $ 6.8 billion
Tony Abbott: $3.2 billion
Looks fairly self-evident.
Unsurprisingly Rudd and Wong refuse to explain the underlying detail of their ETS or the real cost to the community and both their Green and White Papers say nothing about the pervasive economic impacts of their pointless (and precautionary) carbon tax.
The leaves Mr “Only ONE Dollar per Family” (again) looking rather stupid and hopelessly inarticulate at presenting the truth to the Australian people.
But we already knew that.
His ‘compensation’ rhetoric simply outlines how he plans to robs Peter to pay Paul…Labor fiscal policy 101.
Keynes would be awfully proud.
Hilariously and with no sense of irony, the poor fops (left+right) that supported Malcolm Turnbull against Abbott must have been dismayed that Treasury estimated the cost of his alternative ETS would be more than A$62 BILLION.
That kind of headline just writes itself.
Nice to see ‘cooler’ heads have prevailed in the Liberal Party.
If Rudd could have done a deal with the Greens he would have. The problem is that he needs a Senate majority to get anything passed, and the ALP plus Greens do not have a majority. That’s why he was forced to deal with the Liberals.
Thanks Sancho, but I think Alan Kohler (and perhaps MPM) has been led to believe something different. The way this story is written you get the impression that the writer thinks the brown coal fired power stations are going to stop using coal altogether and change their machinery so that it works with ‘gas’ - you know, the stuff that comes out of those wells in Bass Strait and elsewhere. But as I understand it, the intention will be to continue using exactly the same brown coal from exactly the same hole in the ground (only maybe a bit more of it), run it through an intermediate process which presumably requires other inputs and creates its own emissions and by-products (which no one will be noticing for some obscure reason) and then consume the slightly altered material in exactly the same steam boilers that they presently use. The difference will be that having pulled a whole heap of carbon and other emissions out of the brown coal during the intermediate step there will be reduced emissions going up those chimney stacks - which seems to be the only place that the Opposition will be counting them. Is this a sleight of hand or what?
Doesn’t answer the question, MPM.
You’re on record as believing that Australians shouldn’t be taxed to fix what you wish to believe is a non-existent problem. Why, then, are you and JamesK now okay with billions of dollars in public money being taken to address carbon pollution when the Libs make it a policy? Are your objections to taxation and science based purely on party loyalty?
And why did you misinform Charlie about coal-to-gas processing? Where do you get your information about it?
Most Largest Mamma……..if Abbott said he was going to tour the country, stopping every kilometre for a squat, and that was his climate change policy you would be in raptures. Get outa here…..
@Sancho
“…Are your objections to taxation and science based purely on party loyalty?…”
Jesus, another one who can’t (won’t) read.
Where am I on record supporting Abbott or his scheme?
Both Rudd and TA are spending BILLIONS…why are you so convinced Kevin has the magic formula?
“…And why did you misinform Charlie about coal-to-gas processing?…”
I didn’t…he’s wrong and so are you.
“…Where do you get your information about it?…”
There are four companies in Australia looking at UCG.
Do some research, you’ll see their process are quite different….and as yet uncommercial.
So, MPM, what did you mean by “Nice to see ‘cooler’ heads have prevailed in the Liberal Party”? Sounds like a pretty clear endorsement to me, and the fact that every time you post in a Crikey thread about Abbott it’s to defend him suggests support, at the very least.
But to clarify, do you object to Abbott’s EFR? Do you think it’s a bad idea?
More to the point, do you believe Abbott would see it through if elected, or is this a lie to win votes?
And please link us to some Crikey comments where you’ve criticised Abbott for anything, because I’m betting right now that you haven’t.
Personally, I think carbon reduction schemes are just a con to allow industry to continue as usual, so Rudd’s is just an alternate EFR. The point is that the the commenters who’ve panned Labor’s CPRS as an unnecessary socialist tax since its first suggestion are now saluting Abbott’s fiscally conservative wisdom in taxing Australians for a carbon reduction scheme they believe isn’t required. You can smell the hypocrisy from orbit.
As for UCG, it happens exactly as described in my link, and you told Charlie otherwise because you wanted to slap him down for being critical of Abbott’s plan (see “MPM invariably defends Abbott”, above). Rather than telling me to research, why not just cut and paste a link proving me wrong, if you have one?
I’ve re-read the above article and I can’t find any reference to “UCG”. So. MPM, I have no idea what you are talking about when you say I am wrong. What I read was:
“In fact it’s quite simple: the coalition is proposing to pay the Latrobe Valley companies to convert from brown coal to gas.”
Now, does this Tony Abbott proposal involve the Latrobe Valley companies no longer mining and burning brown coal or not?
Is the so-called “gas” something like the “natural gas” produced by the oil and gas industry or is it a product manufactured from a brown coal feedstock? Actually, I’m not asking anyone, including MPM, for their opinion, I’m just wondering what the facts are in this particular case. Surely Alan Kohler and Tony Abbott know the answer to this simple question?
@Sancho,
You are right, but you are also wasting your time and effort. MPM has again demonstrated that her brain is atrophied and her sources non-existent/
Oh how I wish that Crikey would moderate their replies - MPM is a serial offender against rational thought processes, yet she (?) continues unabated.
Back to the thread, the Victorian power generators relying on geriatric plant and brown coal are at the bottom of the efficiency curve and the top of the CO2-e generators league. Sorry I am to say it again, but the only available options other than destruction of the planet’s climate are:
Nuclear; or
Sit in the dark.
Solar photovoltaic, wind and solar thermal offer opportunities for high priced alternatives with limited scope. All other (tide, geothermal, growing trees, carbon-in-soil, wavepower, fairy treadmills and prayer) lack scientific support and/or ability to achieve significant scale within a generation or two.
I have just been informed of a site where a discussion of Victoria’s “coal to gas” proposals have been aired. I have no idea of the veracity of the information.
NewMatilda.com 13 Oct 2009
I Can’t Believe It’s Not Coal!
By Greg Foyster
@sancho
You can’t even get the basic facts right.
And thanks for not answering my question RE: Abbott support; you really do want to believe it don’t you.
BTW, show me where any coal-to-gas ‘conversion’ is being carried out on brown coal in Victoria?
@John Bennetts
“…Oh how I wish that Crikey would moderate their replies - MPM is a serial offender against rational thought processes, yet she (?) continues unabated…”
Yawn. Yet another tedious and dull missive from one who wishes we’d all just fall in behind him.
Plenty of room for lockstepping monothinkers on LP or Jezza’s blog. Check ‘em out.
Which basic facts am I not getting right, MPM? Since you haven’t answered any of the questions I asked, I can only assume you concede all of my points.
You’ll notice I never declared that you support Abbott or his EFR, but rather that you have aired no objections to it after years of bashing Rudd’s very similar CPRS and the reason for it. When you challenged me to show where you’ve supported Abbott and his scheme, I cut to the chase and asked you to simply state if you do. Those are easy “yes” or “no” questions, but you’re evading them. Why?
Let’s make this simple:
1. MPM, do you believe Tony Abbott’s EFR plan is sensible and necessary, and do you think he will follow it through if elected?
2. Do you unequivocally support him as leader of the opposition, and if not, why will you not link us to your online criticisms of him? I believe those criticisms do not exist and that you are a hypocrite and liar. I challenge you to prove me wrong.
2. What are the alternate, “uncommercial” UCG methods you referred to in your previous posts? You have claimed that Charlie’s understanding and mine of the process is flawed, even though I have referred you to a document which clearly describes the two conventional methods. You have failed to provide any evidence that I am incorrect, and instead have tried to shift the topic to avoid accountability for your statements.
Please provide evidence now or accept that you don’t understand the process yourself, and simply contradicted Charlie because you are a “lockstepping monothinker” who feels a duty to defend Tony Abbott even when you don’t grasp the basic elements of the topic being discussed.
Feel free to number your responses similarly. I wouldn’t want the focus of the conversation to drift until you’ve demonstrated that you have the slightest clue what you’re talking about.
And, of course, I never so much as mentioned brown coal or Victorian power stations. That is a red herring. No dice, Mama. Answer my questions, please, or wear the hypocrite crown with pride.
No economy on a dead planet Alan.
@Sancho
Let’s make this simple:
1. No
2. No
2(sic). There are no commercial UCG processes in Australia. Do you even know what it is? Three ASX-listed companies (Linc Energy, Cougar Energy and Carbon Energy) have attempted to commercialise the process and failed - look them up. The 13-year old document you referred to was for a laboratory experiment that failed the commercial test. BTW, UCG has nothing to with Tony Abbott, so I’ll accept your disingenuity as simply a lack of understanding on your part.
How frustrating it must be for you (and others) that you can’t compartmentalise my political ideology. Unlike your unswerving and dogmatic support for all things on the Left side of the ledger I am capable of much higher and more independent thought.
You should try it sometime, Snake Eyes.
MPM, I’m not involved in your Politics 101 discussion with others. I’m still trying to get a handle on the practicalities of the Alan Kohler / Tony Abbott so-called conversion of the Latrobe Valley power stations from brown coal to gas. Early in the piece yesterday you quoted my question:
“…Isn’t this the scheme whereby the generator still mines the same brown coal but they feed it into some sort of pressure cooker between the mine and the power station - to remove water and “convert”…”
You went on to remark:
“No…it’s nothing like that at all. However, UCG is still an unproven commercial technology.”
I take it then, that you know what Tony Abbott is proposing? But since your latest post states that “UCG has nothing to with Tony Abbott”, what exactly was the purpose of bringing “UCG” into this debate in the first place? Is the so-called “gas” manufactured from brown coal or not? Do you know anything about this subject?
5 Greens + 2 Lib = 7