While the planet continues to heat up — 2020 may yet be the hottest year ever and will be in the top five hottest years — and the government continues to deny climate change and the need for climate action, Labor is busily demonstrating that the Coalition isn’t the only side torn between basic science and the demands of fossil-fuel donors.
Joel Fitzgibbon isn’t the only pro-fossil-fuel figure within Labor. He’s backed by key Labor donors, the Australian Workers’ Union and the CFMEU, both of which oppose effective climate action in the name of looking after fossil-fuel-industry jobs.
Labor also receives generous donations from fossil-fuel companies like Santos, Origin and Woodside, advocates of gas and the myth of carbon capture and storage.
And while press gallery coverage of the stoush between Fitzgibbon and the Labor leader Anthony Albanese (and advocates for effective climate action within Labor) is framed in the terms Fitzgibbon prefers — that climate action is inimical to the interests of working-class voters — the real beneficiaries of Fitzgibbon’s activism would be fossil-fuel companies, especially large, mainly foreign-owned multinational mining companies.
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As Crikey pointed out back in July, major mining companies either — in the case of BHP — want to get out of all but the highest grade thermal coal and coking coal, or have shut down their thermal coal operations for weeks at a time, as Glencore has in the Hunter Valley and Queensland.
Glencore is one of the biggest miners in the Hunter Valley, not to mention one of the world’s biggest tax dodgers and a routine user of transfer pricing to avoid tax obligations in developing countries. It is currently embroiled in a major fight with the Australian Tax Office (ATO) over transfer pricing. According to the ATO’s 2017-18 corporate tax data, Glencore paid about 11% tax on $2 billion in taxable income and about $16 billion in revenue.
Another Hunter Valley multinational, Peabody, the world’s largest coal producer, has revealed it is facing bankruptcy again — for the second time since 2016 — in the face of slumping coal revenues and massive debt. Peabody has already slashed jobs at its NSW and Queensland mines this year and suspended operations. There’s now a concern taxpayers will be left on the hook for the cost of remediating Peabody’s mines.
All this has happened in the complete absence of any serious climate action policy. It’s been driven by the collapse in demand for thermal coal.
If Fitzgibbon wants any more evidence that thermal coalmining has no future he can look north to the results reported by Queensland state electricity generators.
The two companies — Stanwell and CS Energy — own two-thirds of Queensland’s power stations and just reported losses for 2019-20 of $240 million for Stanwell and $77.6 million for the smaller CS Energy.
That was driven by the fall in the weighted average price of electricity in Queensland by a third — from $80.29 a megawatt hour in 2018-19 to $53.41 in 2019-20.
The companies were forced to use impairment tests to check the future value of their key assets — their huge coal-fired power stations. Both were forced to write them down — by $719.6 million in the case of Stanwell and $350 million for CS Energy.
They haven’t just been hit by the pandemic and its effect on electricity demand but by the surge in investment in renewables. As the Stanwell annual report put it:
Compounding the imbalance caused by supply increases is the market view that there will be little to no growth in future electricity demand. Population growth will continue to provide growth in household energy consumption; however, it is likely that this growth will be offset by the continued penetration and increased system size of rooftop solar.
Who’s investing in rooftop solar? Many of the blue-collar workers Fitzgibbon claims Labor has lost touch with. In Queensland households solar penetration is about 33%.
Perhaps Fitzgibbon, the AWU and the CFMEU ought to have a word to them and tell them to get behind coal again and help out the likes of Peabody and Glencore.