Whatever the outcome of Saturday’s green-tainted global-warming-fixated Wentworth by-election, it won’t knock King Coal off his economy-boosting throne. And there will be no prospect whatsoever of Australians bowing to greenie demands to give up eating meat in order to remove the atmospheric consequences of bovine flatulence. No matter how committed the Labor-staffed ‘Independent’ Dr Phelps may be to hike carbon emission targets (and stop the Adani coal mine), Australia will continue expanding further as the world’s biggest coal shipper and a major exporter of beef. Last week, just as former Liberal leader (and ‘unlosable election’ loser) turned anti-government activist John Hewson joined Malcolm Turnbull’s son Alex in his self-interested campaign to destroy the Liberal party’s parliamentary majority, coal regained its former title as Australia’s biggest export earner at $61 billion, just ahead of iron ore. And the forecast is for further big rises to come, especially for the greenie-hated thermal coal for electricity generation which has already hit a record $25 billion (the remaining $36 billion being steel-making coal) as it faces rapidly rising demand from Asia and India.
But this is not a case of Australia being a rogue stand-out from the world’s virtuous march to lower emissions; the latest official forecasts of total world coal demand by 2030 are for a 40 per cent lift in steel-making coal and another whopping 150 million tons of thermal coal. This all fits in with the expectation of BHP boss Andrew Mackenzie earlier this year that fossil fuels would continue to provide more than 70 per cent of a world energy market that by 2030 would have seen demand jump by a third; ‘There are very few commercially reliable and affordable solutions for base load energy supply without coal’.
That is exactly what Australia’s major energy providers have belatedly discovered as the excessive, uncoordinated, virtue-signalling and heavily-subsidised rush into renewables has resulted in a chaotic energy market. AGL’s interim chief executive Brett Rodman, has blamed the increasing risk of higher energy costs on the damaging price volatility arising from the excessive growth of renewables compared with ‘firming’ generation. And Origin Energy’s Frank Calabria blamed the continuing absence of a policy that promotes either existing firm generation staying in the market or new investment in guaranteed reliable firm generation while so much intermittent renewable power was being approved. Angus Taylor, reckons he has an effective answer, but needs the endorsement of every state later this month. He believes it will be difficult for states to withhold approval because of the potentially chaotic consequences of not doing so. In Victoria he says there is a one-in-three chance of blackouts this summer.
Taylor says we need to back investment in reliable generation because of there being so much intermittent supply that is damaging the economics of coal-fired power stations. His solution is to introduce a retailer reliability obligation that incorporates a trigger to introduce new firm generation into the market. This reliability guarantee will put an obligation on retailers to ensure they have enough capacity to meet their customers’ needs. It crucially ensures that reliable base-load generation is kept in the system to be there when wanted, not just when the sun is shining and the wind blowing. As Taylor asserts that Australia will reach its 26 per cent emissions reduction target, ‘our challenge is not to get more renewables into the system, it is to manage that intermittency, keep the lights on and keep the system affordable’. He supports the gradual move from subsidies to a free market and so has not gone down the track of an early end to the subsidies that are still making the intermittency problem even worse.
Like coal, meat is an easy target for environmental zealots; global livestock greenhouse gas emissions are claimed to make up between five and ten per cent of human-related carbon emissions. With the world’s population forecast to rise by three billion over the next 30 years, the number of cattle needed to meet beef and dairy demand would have to double – unless meat-eaters can be diverted into plant based diets such as soybeans, which may cause a different pollution problem.