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Sep 8, 2017


Earlier this week, I wondered if the government’s recent strange behaviour presaged that, no matter how much Labor offered to compromise on energy and climate policy, the government will never agree to bipartisanship.

After all, Malcolm Turnbull had decided to use reports from the Australian Energy Market Operator to demand that the Liddell coal-fired power station be kept open, even though those reports explicitly and clearly showed that the risk of unserved power demand in NSW — following this long-forecast closure of Liddell — would be kept to a negligible level if there were greater investment in renewable power. The owner of Liddell, AGL, was repeatedly verballed by the Prime Minister and others and then, when it objected to being lied about, attacked by the government and by News Corp, which in league with the government has now begun one of its periodic culture wars against the company. And it’s a campaign that uses the sort of language that if Labor used it about major corporate players would be condemned with froth-mouthed fury as “class warfare” by the Coalition and the Murdoch press. Now, hilariously, the Coalition and The Australian have combined to demand that Labor “state its position” on Liddell, which will remain operational for another five years.

Since energy policy is one of the few areas where, at least in the government’s own eyes, it has an edge over Labor, Malcolm Turnbull seems to have made a decision that he wants to keep the issue running for as long as possible in order to damage Labor. Concluding a bipartisan agreement on a Clean Energy Target that allows high-efficiency, coal-fired power to be built (which it never will be) would remove, at a stroke, the government’s capacity to paint Labor as the party of higher power prices, because both sides would support the same policy framework.

Most of the media coverage of the debate over a Clean Energy Target has centred on whether Turnbull can get a CET through his party room. But what if he doesn’t want to? What it he wants to keep using the issue to attack Labor instead, even if it means continuing uncertainty for investors and a continuation of the same shambolic energy market situation as now? Political survival is the first order for any government — longer-term issues such as the closure of ageing coal-fired power plants can be dealt with after the next election is won.

It’s thus interesting that, today, Fairfax reported that Coalition backbenchers were now demanding not merely a CET that allowed coal, but some kind of “baseload investment scheme” that would fund coal-fired power as well.

This would be a significant movement of the goalposts by the Coalition: no longer would a “dirty” CET be required, but taxpayers would be required to waste billions on coal-fired power plants as well — the only thing that will ensure a coal-fired power plant is ever built in Australia ever again. Labor is unlikely to come at wasting money like that.

Remember that Labor has moved a long way on this — it rather courageously took a policy for two carbon pricing schemes to the last election (one for electricity, and a wider one). It then considered an emissions intensity scheme, which had strong business support. Then it shifted to endorse a Clean Energy Target following the Finkel Review. More recently, it has left the door open to CET that allowed coal-fired power, acknowledging that it might be necessary in order to accommodate Turnbull’s problems with his party room and a bipartisan policy is crucial to get energy infrastructure investment going again.

Along the way, Labor has copped abuse both from the Greens, who insist it is selling out the planet, and the government, which insists it is being ideological. 

But it may well be that any offer of compromise by Labor is met by the Coalition simply moving the goalposts ever closer to coal-fired power, with the goal of portraying Labor as committed to plunging the entire country into darkness. After this week, it may well be the case that that is exactly what Turnbull wants to do. And the consumers and businesses of the 2020s be damned.


Sep 6, 2017


Is it possible that the Liberal Party is so obsessed with burning coal that any resolution of the climate wars is impossible, no matter how much Labor offers to compromise and shift policy?

It’s a valid question after yesterday afternoon’s bizarre turn of events in which the Prime Minister was publicly contradicted by the head of a major Australian company over claims made in the wake of the release of the Australian Energy Market Operator’s annual Electricity Statement of Opportunities and its observations about AGL’s old Liddell power station in NSW, which is scheduled to close in 2022.

“The Energy Minister and I are already in discussions with the owner of Liddell, AGL, about how we can ensure that that power station stays in operation for at least another five years after 2022,” Turnbull told Parliament in question time at 2.04. At 4.59, the head of AGL, Andy Vesey, shot that down in flames when he chipped Tony Abbott for crowing about coal-fired power. 

A panicked Turnbull then, according to media reports, rang Vesey, and held a doorstop before entering an evening function at the Great Hall in Parliament to tweak his story, saying about Vesey: “He says AGL wants to get out of coal, but he has said that he is prepared to sell to a responsible party, and that’s what we’re talking about.”

Problematically, however, AGL this morning contradicted the Prime Minister for a second time in less than 24 hours, telling the Australian Stock Exchange “the company has made no commitment to sell the Liddell Power Station nor to extend its life beyond 2022.”

[The Australian’s clean coal magic trick]

But let’s assume AGL is happy to sell. Who is going to buy this asset, the effective life of which would be over, in order to keep spending money to operate it? There is speculation another company will stick its hand up this afternoon. But what incentives will be given to it to buy such a lemon? Turnbull twice refused this morning to rule out spending taxpayer money on Liddell either to acquire it or to somehow “facilitate” its purchase.

The Prime Minister insists keeping Liddell going is necessary because the Australian Energy Market Operator report forecasts that the risk of blackouts will increase after Liddell’s scheduled closure. As Abbott’s reaction demonstrated, of course, coal advocates will always find a reason to insist that we must continue to burn coal to keep the lights on.

The problem with Turnbull’s justification is that — despite what you might have seen in other media reports — the AEMO report actually shows that it’s not necessary to keep Liddell going. This is the key chart, showing the range of “USE” outcomes. USE is unserved energy — the shortfall between what consumers want and what the system can provide. Under current standards, USE is not supposed to exceed 0.0020% of consumption per region.

The only period in the next decade when USE will exceed the designated threshold is in South Australia and Victoria this coming summer. How is that risk being addressed? AEMO says “this risk is being addressed by the South Australian Government’s Energy Plan developing additional diesel generation and battery storage, and AEMO pursuing supply and demand response through the Reliability and Emergency Reserve Trader provisions”.

But what about Liddell? Why is Malcolm Turnbull trying to hawk a used coal-fired power plant around corporate Australia? AEMO’s report shows that even under a high-demand scenario, NSW won’t even come close to the USE threshold after Liddell closes.

The only circumstance in which NSW goes over the USE threshold is if another coal-fired power station, one currently not scheduled for closure, shuts down — that (unsurprisingly) causes a big spike in predicted USE. But as the report shows, USE will be a small fraction of forecast levels if, in addition to the closure of Liddell, “additional renewable generation was to be developed to deliver a national renewable generation outcome” (that also applies if another coal-fired power station closes as well as Liddell).

[Finkel review reveals coal fetishists’ struggle with basic maths]

But the government’s instinct is to reach for coal as a solution — coal funded, inevitably, by taxpayers. 

One more irony in all this, especially for Turnbull and his Energy Minister Josh Frydenberg, both of whom were happy to serve in the climate denialist Abbott government while it trashed investment in Australian energy infrastructure: if coal advocates want to use the AEMO report as justification for propping up coal, consider what it identifies as the biggest threat to Australia’s energy security:

“The overall responsiveness and resilience of the system is at risk from increased vulnerability to climatic events, such as extended periods of high temperatures, and the risk of loss of, or reduction in output of, major generation units…”

Sometimes, it seems, it’s convenient for climate change to exist even for denialists.


Mar 16, 2017


When the history of the present is written, the offer by Elon Musk and Atlassian founder Mike Cannon-Brookes to solve South Australia’s energy crisis with new battery technology in 100 days, “or it’s free”, will loom far larger than it does at the moment. The offer by two cutting-edge tech companies, with a fast positive response from Labor SA Premier Jay Weatherill, should have been the sort of thing that PM Malcolm Turnbull would welcome as an expression of the new possibilities that make it an “exciting time to be an Australian, to be alive,” etc.

Instead, faced with the promise of new possibilities, the PM has scrambled for every old answer there is. Gas companies — which are pretty much the National Party moved into the private sector — would be persuaded to divert some of the product they are pumping to their Asian-oriented export plants in Gladstone, where our resources are being sold for a song overseas to prop up a disastrous failing investment. That was iconic enough, but it was nothing compared to the new Snowy River scheme, announced by the PM, a move so geared to patriotic notions he might as well have had a boombox with the theme from the 1990s TV series playing behind him. It is stirring, it is nationalistic, and it is all utter bullshit.

The fact that a Liberal PM is announcing a new Snowy River scheme — a vast process that, however much of it was tendered out to private shonks, would have to have a vast state-investment component — is a measure of how desperate and improvised this all is, and where the lines of political division lie now. What was a Labor scheme (initially opposed by the Liberals in the 1940s before they took it over) reliant on a consent to state socialism gained from the collective effort of WWII has now become the centrepiece solution of a government that was hitherto celebrating agility and the nimbleness of the atomised marketplace.

There was nothing agile about the Snowy River scheme. It was a massive quasi-military operation reliant on state command, the forced labour of “New Australian” migrants (with dozens of deaths), which screwed up the regional agricultural system and delivered less than stellar benefits at the time. The new Snowy would be that, but without even the modest achievements of the original. You know, without looking, that it would be a boondoggle sell-off of tenders to mates, with delayed delivery, vast blowouts and poor yields, presuming it ever happened at all, rather than being just another of Malcolm Turnbull’s once-a-week forehead farts from that giant brain of his.

Why has a Liberal prime minister suddenly attached himself to a statist scheme — indeed to the icon of Australian statism? Because the right and their corporate backers are so desperate to keep power generation centralised, and thus commodified, that they will adopt anything, anything at all, rather than contemplate the best and most obvious solutions: decentralised power on multiple scales, using post-grid automated free-flow networks, and bi-directional so that households, businesses and whole cities generate excess power and plug it into the network.

They’re not only willing to adopt anything at all that will avoid innovative solutions, they’re willing to junk any previous solutions offered as part of the culture wars. Notice how the talk of coal-fired power is slipping into the background? With Musk and Cannon-Brookes talking of vast battery capacity to solve the problem of variable solar and wind yield, the right’s defence has shifted to hydro power and boutique nuclear. They’re still pushing the idea of a new coal plant, but it’s in the background. Why? Because it’s absurd. Coal-fired plants are a symbol of backwardness. Coal is deader than mainstream Australian theatre, it just doesn’t know it yet.*

The political-corporate elite, and some sections of the union movement, would rather Australia go backwards for a decade in power generation than admit that the fastest solution — clean and green — is a massive roll-out of modular renewable-generation/battery storage. This is nothing less than the Chinese are already doing on a scale beyond anything we could match, which is, surprise, one reason why those gas plants at Gladstone, got up by those dozy Pitt St cockies in the Nats, can’t generate a profit. Surprise surprise. The world doesn’t want much of our coal. Now it doesn’t want our gas. Meanwhile, Asian societies, which never had book-of-the-month club intellectuals like Paul Keating to sell off national plant for a song, are surging ahead of us because they can co-ordinate state activity, scientific research, private development and individual uptake more effectively. The power crisis has shown us to be truly the “white trash of Asia” — a Little Latin American demesne, run by the latter-day corporate latifundia: Telstra, BHP Billiton, Big Gas, Big Roads, all handed control of the economy for next to nothing.

People have started noticing it because these days we get a power blackout not in a once-in-a-generation storm but because of an Adele concert. Everyone can see that that is more redolent of Zaire, or West Virginia, than it is of a modern, efficient nation. So people from all walks of life are now open to more innovative solutions, and the government must scramble to catch up to them. Both major parties would prefer to leave Big Power undisturbed so its tow wings can fund their parties and remove the need for a membership base, or a genuine mass politics. Cursing their luck, they now have to adopt as their own policies that the Greens have been advocating for more than a decade. The “left” and “right” of Green politics — full post-grid centralisation versus a mixed model of modular and concentrated generation — is now the “left” and “right” of real debate about power generation in the mainstream. The Greens may always struggle to get above 10-15% of the vote, but they will, as before, set the political agenda for exhausted parties, run by exhausted people, out of ideas, and with a barely disguised hatred of both their base and the vocation of politics that they chose decades ago.

Why such concerted resistance to innovative solutions to power generation? Because the new technologies — the combination of wind, solar, battery, kinetics (you can part-power a driverless car simply by feeding back into it some of the energy it expends through the “non-forward” motion of its parts, i.e. the shaking) — are so capable of leaping ahead of existing modes of generation that they undermine the possibility of commodifying power. Battery technology working at the atomic and sub-atomic level takes advantage of the benefit of Moore’s Law — the deep root of which is that any non-mechanical, i.e. chemical/atomic/sub-atomic technological process has the power to expand exponentially in capacity, whereas electro-mechanical processes have a linear progression (one reason why, for example, DVD players, with minimal mechanics, went down to $30 new by the end of their reign, while VCRs, with tape heads and motors, never got much below $150 at the end of theirs).

What is thus happening in the crucible of corporations like Musk’s is a process first described by Marx, and elaborated on by writers after him such as Engels and Hilferding: capitalism produces the technology that creates its own crisis, because its cheapness and automated quality no longer allows for profit by accumulation, i.e. by running a firm and selling goods. Any individual firm, like Musk’s Tesla, gains an initial advantage from introducing a new technology. As it spreads through the sector, the sector is advantaged in comparison to other sectors (i.e. poor old King Coal, and Lord Gas). Eventually, the accumulative power of the system as a whole comes into peril. As that begins to occur, capitalism ceases to earn profit from innovation and market sale, and turns to profit-through-rent — enforced monopolies, cartelised pricing, intellectual property squatting and all the rest. The state is essential to this, which is why we saw the absurd spectacle last year of people saying straight-faced that the green energy bank might be used for coal power. Of course it would. Coal profits are now rent, as m’colleague Keane gestured towards yesterday.

That’s why Musk and Cannon-Brookes’ suggestion of “100 days or it’s free” is so important. I suspect if they’re offering that, then they could probably roll it out in about 30 days, and they’ve left some elbow room. But even if they didn’t make that deadline, they could obviously afford it. And that is the second part of what Engels, Hilferding and others argued: eventually, in the transition to a post-capitalist economy, there may be no need for a “revolution”, per se, at all. Capital will have so developed the productive forces that there will be no option other than to hand them over to socialised management. That is what the “100 days” thing is a tiny gesture towards.

Possibly. The other explanation is that tech companies are so desperate for markets they are offering free prizes! In order to gain huge state contracts. Perish the thought. Yes, one should be wary of billionaires bearing gifts. But you know what? It doesn’t matter. Our path to creating post-capitalist poles and foci within the existing economy is made clear by Musk/Cannon-Brookes’ offer, but is not dependent on it. We should be bypassing the big state as much as the market. Unions, community groups, green corporations, forward-thinking cities can simply begin to proof themselves against the crisis of energy — which is the crisis of capitalism at its very essence — by developing autonomous post-grid networks on a variety of scales, and dealing among themselves, with intra-network transfer costs approaching zero as the networks grow. Eventually the power companies will have to be socialised because they will have no value (the threatened sudden sale of Western Power in WA was because it is approaching zero value faster than any other outfit).

You think this is science fiction? No, this is five or 10 years. These currents are moving faster than a mountain river — and with all the hazards of their rapids to be fair. But they will go where they go, and we will ride them, if we’re smart — and a government like Weatherill’s could really leap ahead of everyone in the West in this matter — while the rent-seekers are still arguing about who gets the contract to build the dam that would allow them to sell it back to the rest of us.

*neither does mainstream Australian theatre, which spends so much time talking about “holding up a mirror to Australia’s middle classes” it might as well be a hair salon in Double Bay. Funny how there’s one thing they never hold a mirror up to.


Nov 7, 2016


The will-they-won’t-they saga of the closure of the Hazelwood power station in Victoria’s Latrobe Valley — finally confirmed by French owner Engie last week — is another display of shambolic energy policy in Australia.

For several years, policymakers have been aware of the impending closure of old coal-fired power plants as new capacity becomes available from gas and renewables, Australians curb their energy consumption due to rampant gouging by network owners and the need to transition to a lower emissions-intensive future required even by the paltry carbon abatement targets adopted by the Coalition.

The closure of Hazelwood, for example, has been discussed for the best part of the last decade — indeed, the Gillard government established a program to close down Australia’s most polluting power stations, including Hazelwood, but couldn’t agree on compensation with their owners. Now Hazelwood is going, without compensation, and with little in the way of planning for the workforce affected. It follows other coal-fired plants in NSW, Victoria and South Australia, closed or “mothballed” by their owners.

By leaving it to individual companies to make decisions, federal and state governments have effectively outsourced the main responsibility for the impacts of closures on local communities. The Victorian government responded to Engie’s announcement with a quarter-billion-dollar assistance package and an “economic growth zone”, but workers and communities are still left with massive uncertainty in regard to an event that everyone has known was coming but for which little planning has been done.

Don’t look to energy white papers for any evidence policymakers have been thinking about the impact of the transition to renewables on workers. The only workforce issues addressed in the most recent energy white paper, from 2015, relate to skill shortages in the energy sector and the need to train and import more workers, the latter on 457 visas. But then that paper virtually ignores renewable energy, has only one mention of climate change and lauds coal as “underpin[ning] our energy generation mix for some decades”.

And while Labor in office tried to establish an effective transition program, the energy white paper Martin Ferguson released in 2012 (which addressed renewable energy at length) similarly saw the only workforce issue as about skill shortages.

Meanwhile workers in areas like the Latrobe Valley have to deal with the uncertainty and economic fragility that comes from closure. The refusal of governments, and especially the federal government, to develop serious policy around transition to renewables and its impact on communities leaves governments reactive and prone to politicised policymaking. A particular problem is that generator closures tend to occur in regional areas, which are represented by conservative party MPs who are either climate denialists and enthusiastic boosters of coal-fired power or take a more realistic view of energy transition but belong to parties that do not.

A group of businesspeople, academics and investors have tried to address the gap by forming an “Energy Transition Leadership Forum”, which today released a proposal for an energy transition plan. The group comprises business figures such as Jillian Broadbent (also chair of the Clean Energy Finance Corporation), former Telstra chair and CSIRO chair David Thodey, Citibank chair Sam Mostyn investment banker Mark Burrowes as well as academics, clean energy sector representatives and environment group leaders like Geoff Cousins.

A key part of the transition plan is establishing ground-up strategies for diversification developed by local communities in collaboration with governments, unions and generator owners, designed to start developing alternative industries and sources of employment ahead of closure, rather than following closure, as will happen with the Victorian government’s plans.

You’d think this would be a policy no-brainer, especially for an “agile”, “innovative” government that is focused on diversifying Australia’s economy to take advantage of the historical opportunities for growth we’re presented with. But at the moment it’s the supporters of energy transition who are doing the thinking about the inevitable impact on local communities, while opponents apparently think those communities can be frozen in amber.


Aug 5, 2015


Tuesday’s announcement of Barack Obama’s clean-power plan has been billed as the strongest action ever on climate change by a US president.

The regulations are designed to cut emissions from power plants and contribute to a cleaner, greener economy. But what does this action by the world’s second-biggest carbon polluter, after China, mean for Australia?

What is the US’ new plan? 

President Barack Obama announced that US coal-fired power stations will be regulated to restrict their carbon pollution. The announcement came as a bit of a surprise to many people, given all the talk about climate change and targets for this and that, that the most polluting sector of the US economy has been unregulated until now. This didn’t come overnight; Obama signalled his intention to act on climate change a while ago, but the actual plan of how to get there has taken many months.

Why do we in Australia care what happens in the US?

The US is a leader on the global stage of climate politics. What happens in the US and other major economies sets standards that have flow-on effects for other countries. In the past, other countries have used the biggest economies, the US and China, not acting as an excuse for not taking any action of their own. Now both the US and China are moving forward.

Does this have anything to do with global climate negotiations?

This announcement means the US has thrown down the gauntlet to the other major climate polluting countries that they need to make major changes to how they regulate pollution at home to be able to reach their collective agreed target. More than 190 countries involved in the international climate negotiations agreed to work together to keep global average temperature below 2 degrees of warming to avoid dangerous climate change.

Is the Australian government doing anything about this?

The Abbott government is rumoured to be about to release its initial target next week for how it proposes to bring down climate pollution in line with other countries over the coming years.

Does it really matter to Australians?

Not only is Australia one of the places that will be hit most by climate change, we also happen to have a greater share of the solutions. Poll after poll shows that the great majority of Australians want energy supplied by wind and solar — something we have in abundance — seeing this as an opportunity to create jobs and investment. Stay tuned for The Climate Institute’s latest polling, to be released next Monday.


Mar 3, 2015


Coal mining communities in the Hunter Valley and Latrobe Valley are keen to transition away from an industry has no long-term future, says visiting American environmentalist Bob Massie.

Speaking to Crikey towards the end of a two-week speaking tour, Massie said he had been “very moved” by the reception he received in Newcastle and Morwell, where he gave lectures to audiences including mining families.

“They are eager for a well-organised transition to take place,” said Massie. “They know coal is coming to an end. I’ve actually run into very little criticism. I did not discover a radical ‘jobs versus environment’ argument. It’s an invention of politicians to polarise people. There is an understanding there needs to be a transition, and they are wanting to be a part of it. Communities are saying, ‘don’t let us just be dropped’.”

Massie, an ordained minister, Harvard Business School PhD and unsuccessful Democratic Senate candidate in 2011, has had a distinguished career campaigning for business sustainability including as onetime president of the Coalition for Environmentally Responsible Economies (CERES), co-founder of the UN-backed Global Reporting Initiative and initiator of the Investor Network on Climate Risk, which now claims over 100 member companies, and funds and combined assets over $11 trillion.

On his first trip to Australia, Massie says he found communities in the coal regions disillusioned after job cuts following power-industry privatisation, and the Latrobe Valley was still reeling from the recent Hazelwood mine fire.

Massie says if federal and state governments were to offer a well-planned and funded transition away from coal, including retraining and mine remediation, “there might be more support than they suspect”.

In NSW, however, on the weekend The Sydney Morning Herald revealed plans for 16 new or expanded coal mines covering an extra 45,000 hectares in the Upper Hunter Valley. In Victoria, new Energy Minister Lily D’Ambrosio has been speaking with Latrobe Valley workers and business groups about assistance to diversify the local economy, and support for renewables, but union and mining industry spokespeople are still talking about growth in the coal sector.

Massie did not have time to meet with state governments but did meet with Australian Greens leader Christine Milne and Labor environment spokesman Mark Butler. Climate group, which organised the tour, tried to arrange meetings with the federal government, but Massie said “apparently they’re not wild keen to hear my message”.

Prime Minister Tony Abbott’s “coal is good for humanity” comments have been widely replayed, and the federal government is pushing hard to open up a new thermal coal province in Queensland’s Galilee Basin — with New York consul-general, climate sceptic and former Coalition industry minister Nick Minchin lobbying Wall Street banks, which have reportedly refused to fund the expansion of Abbot Point coal export terminal.

Massie, who has been closely involved in the fossil fuels divestment movement, says Minchin will find those banks are under specific pressure over the financing of Abbot Point from their own big shareholders.

“There are 10 or 12 major investors — some religious, some pension funds — that are trying to block the Galilee Basin. I’m sure he is going to do his best — he may be a very persuasive guy — but there are objective forces, human forces, against him.”


Jan 19, 2015


Adani chairman Gautam Adani

Tony Abbott’s commitment to the Anglosphere, increased carbon emissions and the mining lobby has hit spectacular new heights.

It’s hard to know where to start with the list of appointees to the Australia-India CEO Forum by Trade and Investment Minister Andrew Robb on his trip to the country last week to kick-start (you guessed it) negotiations for a free-trade agreement. But perhaps let’s begin with the appointment of Sam Walsh, the chief executive of a British company that mines coal, as co-chairman.

The naming of the Rio Tinto CEO, who presided over Rio’s China bribery scandal when he was head of its iron ore division, comes as the world’s second biggest miner is in peak lobbying mode with the Indian government.

“India has a very exciting future, and I look forward to playing a part in developing new investment opportunities in this vibrant nation,” Walsh gushed in Robb’s media announcement. Is he or what? Rio is desperate to convince the Indian Prime Minister Narendra Modi he should give his approval for the $500 million Bunder diamond mine and also the $2 billion Odisha iron ore project in which Rio owns a 51 % stake.

To add fuel to the fire, so to speak, Walsh’s co-chair is Gautam Adani, billionaire chairman of Adani, one of the two Indian companies preparing to dig countless millions of tonnes of emissions-increasing coal out of Queensland’s Galilee Basin. (The other company is GVK, which is partnering with Gina Rinehart, who was clearly too busy for the CEO Forum but did attend at least some of last week’s unwieldy 450-business, eight-city delegation to India.)

A simple question to Robb’s office about why a UK-based executive was named to the Australia-India CEO Forum was met with silence. To remind readers of the difference between a company domiciled in London and one in Melbourne, as Rio once was, tax payments tell the tale. Out of a total US$1.8 billion in tax for the first six months to June 30, 2014, Rio paid about US$0.630 billion in Australia. Yet its Australian iron ore business alone earned US$4.6 billion, compared with earnings for its total global operations of US$4.4 billion; that’s correct, less than Australian iron ore. The clear winner: the UK Chancellor for the Exchequer.

But this decision, as peculiar as it is, has minimal political import compared with Adani’s appointment, a clear signal that the Abbott government has now thrown itself squarely behind a $16.5 billion coal project that last week was the subject of a third court action attempting to have approval for the Carmichael mine overturned on environmental grounds.

“We will argue that the minister failed to consider the greenhouse gas emissions arising from the burning of coal mined from the project and the impact of those emissions on nationally protected matters, such as the Great Barrier Reef,” environmental lobby group Environmental Defenders NSW said in court documents.

“The rest of Robb’s list reads like a who’s who of the Australian resources sector … “

Very deep environmental concerns aside, there is also a whiff of panic about the exercise.

“There’s something special going on in India,” Robb said. Indeed there is — Australia’s exports to the country have been sliced almost in half between 2009-10, when they were about $16 billion a year, and last year, when they were $8.3 billion. Of that, $4.9 billion was for coal.

Despite this sagging trade, India now looms as the last chance saloon for Australia’s resources and energy sector, although it remains a minnow of a market after the north-Asian countries. The Coalition has proven that not only can it fritter away the benefits of the mining boom — exhibit A, the Howard government, which chose middle-class welfare over a plan for the future — it can’t figure out a way forward without it.

Commodity prices are in slump that is worse than during the global financial crisis, but rather than come up with a plan for diversification, the government keeps pushing the mining sector as our best bet.

Relatively self-sufficient in iron ore — although at current prices, premium Australian product must be tempting — it’s coal that the Indians will need in coming decades as they begin to build coal-fired power stations in a bid to finally get consistent growth in an economy that never fails to disappoint. Not only will Australia maintain its appalling record for carbon emissions, it will be contributing to an escalation of Indian emissions, too. As the Chinese put the screws on the iron ore sector, refusing to shut down uneconomical domestic production as they wreak revenge on, yes, Rio Tinto and BHP Billiton, India has emerged as the Australian mining sector’s best hope at a significant future market — hence the massive government support for the Galilee Basin projects. The lack of imagination takes one’s breath away.

Here is how Adani welcomes his appointment: “India has no more reliable friend or partner than Australia, which is showing its clear intention to help power India’s future.”

The rest of Robb’s list reads like a who’s who of the Australian resources sector: BHP’s coal chief Dean Dalla Valle; Woodside chief Peter Coleman; Vanessa Guthrie, managing director of Western Australian uranium miner Toro. Plus there are plenty of Melbourne Club companies: Telstra (chaired by former Macquarie Bank director and current the chair of the Business Council of Australia Catherine Livingstone); Toll Holdings; ANZ and Visy. Macquarie and IAG are there too. Universities Australia’s Sandra Harding gets a guernsey for supporting the government’s egregious attempt at university “reform”.

It’s an achingly familiar list with not a small business to be seen and just a single medium-sized one — the token agricultural representative, the Murray Goulburn Co-op. This from the “party of small business”.

It only serves to underscore the cloying relationship between the anti-science, anti-broadband Abbott government and the coal, uranium and mining lobbies. Robb has signalled that Australia’s intentions in India, the world’s largest democracy and the country always held up by right-wing Communist-haters as something of an alternative to China, will be the latest Asian nation to use Australia as its quarry.

On the Indian side, the government’s imagination runs riot once more. Along with Adani, there are names from India’s own energy lobby along with a handy A-Z of the country’s largest family-controlled conglomerates.

It’s a cosy, coal-centric mates club, and the messages from the government here are all wrong: welcome, men and women of Australia, to the 20th century.


Nov 26, 2014


Incoming AGL Energy chief executive Andrew Vesey will find his management committee are an academic bunch — check out the post-nominals here — and there is even a professor, Paul Simshauser, the chief economist and corporate affairs chief for AGL Energy, who also juggles an unpaid post in the finance department at Griffith University.

Simshauser is not exactly high profile, but his name pops up over and over in Australia’s dysfunctional energy debate. For mine, the professor often sheds more heat than light, but his prognostications are closely followed in energy circles, particularly in government, where his elaborate defence of the incumbent power companies he works for tends to turn into very public policy.

Continue reading “Meet the finance academic preaching AGL-onomics”


Nov 18, 2014


Among his achievements in this landmark visit, Indian Prime Minister Narendra Modi has definitely given Adani Mining’s $16 billion Carmichael coal project in the Galilee Basin a big shot in the arm.

The giant project was touched on in Modi’s Canberra press conference with Prime Minister Tony Abbott this morning, and his parliamentary address was long on the economic opportunities for Australia as a “major partner in every area of our national priority” including “energy that does not cause our glaciers to melt, clean coal and gas, renewable energy, [and] fuel for nuclear power”.

In Brisbane yesterday, Modi said the Carmichael project would “set a new standard for India-Australia co-operation”, and the rhetoric was backed up with a fistful of dollars: Adani was given a US$1 billion line of credit by the majority government-owned State Bank of India.

Queensland Premier Campbell Newman announced that in addition to the open-ended royalty holiday already on offer to the first mover in the Galilee Basin — and Adani is unquestionably the most advanced — the state government was willing to invest hundreds of millions of taxpayer dollars to fund the associated rail and port projects.

As The Australia Institute’s Richard Denniss points out this morning, for at the least the beginning of its projected 90-year life, the 11 billion-tonne Carmichael mine will pay no royalties, and would not proceed without subsidies. It will be interesting to see how Queensland taxpayers feel about that in the coming state election.

This was not the state government’s plan: only in August Deputy Premier Jeff Seeney told The Australian Financial Review that it was up to the proponents in the Galilee Basin to sort out their own project funding.

It speaks volumes that Australia’s largest coal project is now so completely dependent on government financial support.

But as the NSW government discovered with the Cobbora coal mine it hoped to sell off — underpinned by subsidised off-take agreements with power stations — even over-the-top state subsidies might not be enough to make an uncommercial project viable.

Queensland funding would be conditional on opening the infrastructure up to the other possible users in the Galilee, but, as Crikey wrote here last week, the two other major proponents are struggling to get off the ground. The scenario canvassed in today’s Courier-Mail, with not one but two state-funded rail lines built to the Galilee, is exceedingly unlikely.

Gina Rinehart’s Hancock Prospecting partnership with GVK is years away, mired in financing difficulties and a corruption scandal back in India, while Clive Palmer said yesterday his Waratah Coal was unlikely to take up Newman’s offer.

Palmer’s spokesman told Crikey the Newman announcement was pre-election political spin: “a good news story on the back of high unemployment figures”. Palmer remains miffed at the support for his two Indian rivals in the Galilee, and implacably hostile to Newman. As the spokesman said: “On one hand this government wants to sell assets and now they want to invest in helping one company.”

There are misgivings on India’s side as well. Quite apart from the legal challenge from India’s Conservation Action Trust, referred to here last week, Indian tweeters today bemoaned Modi’s support for the Carmichael mine, calling it a repayment for billionaire friend, supporter and chairman of the Adani Group Gautam Adani, who is on this trip (and has apparently joined five of the PM’s six recent overseas jaunts).

Modi is a reformer, and India is in the middle of a wrenching restructure of its coal industry, hoping to double production, opening it up to private investment and selling down the state-owned company Coal India, which mines the vast bulk of the country’s abundant coal.

Adani Mining is moving steadily, aiming to take a final investment decision by the end of next year and to produce first coal by 2017. Even with the finance it still has billions to raise and there are questions about the commitment of its partner in the rail project, Korea’s steelmaker POSCO.

There is a long way to go.

Comments & corrections

Nov 17, 2014


A real economic argument for coal

Niall Clugston writes: Re. “Crikey says: coal is finished” (Thursday). Crikey‘s editorial attempts to match climate change denialism with coal denialism. The world still has vast reserves of coal, and coal and other fossil fuels remain the main sources of fuel globally. Sure, listen to the science, but also listen to the economics. It would be lovely to slip into a economy powered by sunlight, but this is impossible without a lot of blood, sweat and tears. The current Crikey establishment seems to have a memory that extends no further than the latest tweet. I’ve apparently been involved in the environment movement before they were born. It’s easy to make snap judgements, but sadly the world doesn’t change because of the click of adolescent fingers.

Crikey, what ignorance

Geoffrey Heard writes: Re. “Crikey! Sorry…” (Friday). You didn’t know the origin of “Crikey”?  Here I am, an old-time journo, who has been taking your word for practically everything for years and promoting your sayings and site around the world, and now you tell me you don’t know the meaning of a key term you use every day. Your very own adopted moniker.

Only a couple of weeks ago I was explaining the meaning of “crikey” to a puzzled Canadian correspondent.  My mum wouldn’t let us use such a blasphemous term around the house (she would be horrified if she heard some of the words I use now!).

In fact, when signing up for Crikey the name with its whiff of irreverence, along with the name, writings, and reputation of the founder, was one of the main (oops, desperate pun — well, at my age you have to grab every chance you get, you never know when you won’t be in a condition to make another one) reasons for handing over my moolah.

Gosh (look that one up too), I’ll be scrutinising Crikey more carefully in future, by golly (also worthy of a check its its root).

So much for innovative and brave content

Anne Simpson writes: Re. “SBS insider reveals secret plan to kill Dateline” (Friday).

When Jim Carroll joined SBS, he said:

 “I am excited to be joining SBS at this important time in the Australian media sector when the ways our audiences engage with news and current affairs demands a commitment to innovation and brave content that gets people thinking about the world we live in.”

“It is a real honour to step into a leadership role with such a respected news service and I am determined to ensure that we continue to make a difference to Australians through the most accurate and informative coverage of national and international news and events.”

Please remind him of this commitment.