By Joel Fitzgibbon
17 March 2020
It’s that sinking feeling you get each time you hear the coal-demise lecture. Like last week, when we learned the University of NSW, where they have one of Australia’s best mining schools, had decided to divest itself of any fossil fuel related investments. Yesterday on this page, the University of Western Sydney’s Dr Phillip O’Neill was again proffering his coalmining doomsday message.
Building economic diversity and doing all we can to ensure our education and training systems are focused on the future employment opportunities within a given region, is the normal day-job of our elected representatives. It has certainly always been a priority for me, and I know it’s been the focus of our industry leaders, local councils and our training institutions.
Those sitting on their hands waiting for their coal mining doomsday prophecies to be vindicated are of no help to us. In this rapidly changing world, the coalmining industry is no more in transition than the next sector. Demand for the Hunter’s thermal coal is on the rise and last year we exported a record amount of the product through the Port of Newcastle. Our customers in the Indo-Pacific are building new coal-fired power stations as we speak and will continue to do so for some time to come. Asia-based investors building generators today will be hoping to sell electricity into their domestic markets for at least thirty years.
They say life is full of “lies, damn lies and statistics”. Many like to selectively play with the figures. But to quote the International Energy Agency: “expectations of the imminent coal collapse have come and gone before”. For completeness, the Agency also noted in December of last year: “Global coal demand (in 2018) increased by 1.1 percent, continuing the rebound that began in 2017 after three years in decline”. So, like most markets, its behaviour is not absolutely predictable, the numbers bounce around. Economic planning should focus both on diversity and the preservation of existing local coal jobs for as long as it is possible. That should be our focus.
That’s certainly what the coal companies are doing. Collectively, they are planning to invest more than $4.5 billion in approved and yet-to-be approved Hunter projects. To cater for growing output, the companies which rail our coal to port also have significant capital investment programs.
Meanwhile governments and industry are partnering to finance the further progression of technologies that are focused on greenhouse gas emissions and their subsequent storage or industrial use. The impact of emerging technologies is just one reason that assessing future demand is not so easy.
More than 90 per cent of our coal is exported but the balance is used in our own coal-fired generators. This sector is certainly in transition as our generators approach the end of their physical and economic lives. But while the fifty-year-old Liddell power station will close soon, the remaining three coal-fired power stations have at least a decade and more to run. Remember, even if we can further grow our renewable sector from 23 per cent to 50 per cent, half of our electricity supply will still by necessity, come from fossil fuel sources.
I’m yet to mention metallurgical coal, the product essential to steelmaking and to the modernisation of the big carbon emitters of the Indo-Pacific. Around one third of the coal we export through the Port of Newcastle is metallurgical.
Phillip O’Neill is quick to reflect on the educational attainment of our coal miners. While it is true the level of formal education is relatively low, our miners have their own significant skills specific to their industry and we should be focused on utilising those skills for as long as possible.
It is also true our miners make good money, money they’ll struggle to earn elsewhere, and money which flows into our regional economy everyday: into the retail, services and housing construction sectors. Another reason not to write-off the industry.
In the Hunter we are working hard to ensure that when Liddell closes, new local gas and renewable power generators help us maintain our status as the powerhouse of NSW. That’s also part of our economic diversity building program.
The coal mining industry directly and indirectly employs around 70,000 people across our region. We can walk and chew gum too.