Coal at what price?

Are politicians and business serious about effectively addressing climate change? Australia has significant raw resource availability, it drives the nation’s economy, but who would have imagined, in the face of peak oil and the damaging effects of fossil fuels, the Victorian government would be entering a minerals extraction boom with a major focus on coal.

Coal: at what price?

Climate change and greenhouse emissions have become a hot political topic: the biggest emitter being coal. Australia, like the United States, is largely dependent on coal for income. With this in mind the Australian governments, together with other stakeholders have embarked on a process of attempting to transform coal into an environmentally friendly product even though all the costs and risks stack up against it.

Coal sequestration is the new technology being used for extracting the harmful C02 from coal, turning it into what has been called “clean coal”. In October, 2008, the Victorian Government passed Australia’s first stand alone legislation enabling permanent onshore storage of C02s. The Act comes into effect in January 2010. The carbon dioxide and other greenhouse gasses are to be injected into the earth’s cavities, some of which lay in strategically unstable and ecologically sensitive environments. In Victoria the Gippsland and Otway Basins have been earmarked by “national research organisations as having the greatest potential” for this kind of carbon storage. This is because they already have the vacuous channels required in the form of aquifers or old mine shafts. But the question is how safe are they?

Victoria’s “brown coal fired power station is already in the La Trobe Valley” and this is in convenient proximity to the basins, making the area Australia’s leading “Clean Coal Storage hub”. The storage will stretch from Morwell to the coast impacting on some of the nations’ most beautiful coastal scenery. The potential for damage to land and marine life is enormous.

Clean coal storage will also impact on the local economy. It is a development that could replace the existing primary industries, dairy farming and fishing, especially if there is leakage. What will happen to these industries is not yet known and so far there has been no consultation with the local communities.

Government urgency

On the October 30, 2009 the federal government put out tenders for carbon storage capture or so called “clean coal” (now known as “green coal” because the Australian Climate Justice Program, with the support of Greenpeace, lodged a complaint with the ACCC over the use of the term “clean coal”) in relation to a proposed new brown coal-fired power plant in Victoria. The government tenders followed the Department of Primary Industries’ Recourses Victoria Technical Forum in August 2009, which looked at presentations from various stakeholders on the best ways to proceed with the Victorian government’s mining agenda.

The whole process has been hurried through because as Andrew Bolt explained in the Australian Herald Sun on November 4, 2009 not only is Australia spending $7 billion a year in signing the Global Warming Treaty (money that is to be passed on to countries such as China and Bangladesh to offset adaptation to climate change in developing countries) but could also be faced with enormous fines - “10 times the market price of carbon” - if the governments’ green policies do not meet the UN expectations.

Let us be clear, rich countries need to help poorer nations to adapt to climate change and governments need to be accountable for their actions, or lack of them, but whose interests are really being served here? Is this coming mining boom truly in the interests of Australians and will it do anything to offset climate change?

Clearly, the overseas experience of coal retrieval and sequestration shows categorically there is no such thing as “clean” or “green” coal. However, long shipping queues plague ports as rail networks as they struggle to keep pace with coal exports. There has been a sudden shift in the acceptability of coal because it is now being heralded as “renewable”. The use of this term is very misleading.

Economic crisis drives production: it makes no sense

In 2008 commodity prices dropped significantly during the global economic crisis but the activities of the mining sector quickly rose on the back of acquisition opportunities emerging from the market downtown. Even the failure of BHP Billiton’s attempt to take over Rio Tinto did not alter its long term A+ rating. Share prices fell in some cases but a cursory glance reveals just how much investment activity is going on, especially in the fossil fuel industries.

Australian governments are dreaming if they think they can survive on these resources as the cost of global production rises alongside the devastation of the environment. Already there have been large protests about coal production and there will be more to come. The terms “clean coal” and “green coal” are not fooling anyone.

Carbon capture: the risks

According to the Australian government’s Department of Primary Industries website [DPI], “the term carbon capture and storage [CCS] is used to describe non-biological processes of capturing carbon dioxide from combustion at the source”. Carbon capture and storage is said to “reduce emissions into the atmosphere by approximately 80% to 90% but the process is also energy intensive and greatly increases the amount of fuel a power station needs with CCS by 25% - 40%”.

The science on coal sequestration presents as very impressive from the computer generated modelling but what do we really know about the experience of coal sequestration and C02 storage and what do we know about the toxic ash that comes from coal combustion? Moreover, how responsible are the companies that conduct these mining operations? Can we trust them?

Onshore storage

Onshore storage of the C02s is envisaged either in old mines or deep geological formations. The epi-centre of coal sequestration in Victoria is the LaTrobe Valley’s Hazelwood Power Station. Storage is expected to occur over a wide area that includes hill tops above communities and it includes the borders of an aquifer. Some of the storage facilities are also on fault lines and according to the most recent computer seismic modelling they could pose a significant risk of rupture [earthquakes] affecting nearby communities (Australian School of Petroleum data).

No one really knows how safe or secure the C02 storage is. “A general problem is that long term predictions about submarine or underground storage security are very difficult and uncertain and C02 might leak from the storage into the atmosphere”. There are a lot of disadvantages, the most obvious being the geographic distribution of old oil fields and the small amount of space they provide for storage. Some may also contain remnants of oil, which must be burnt off, this in turn offsets much or all of the reduction in C02 emissions.

Again according to the DPI website, “coal seams can be used to store C02s because C02 adsorbs to the surface of coal”. However, “the technical feasibility depends on the permeability of the coal bed. In the process of absorption the coal releases previously absorbed methane”. The methane can be recovered and sold providing it is economically viable to do so. The burning of methane would produce C02 and this in turn would offset any emissions advantage.

Aquifers

Government information suggests that “saline aquifers have been used for storage of chemical waste in a few cases” and aquifers have a greatest potential for storage volume. The disadvantage of saline aquifers is that relatively little is known about them. In 1986 a large leakage of naturally sequestered carbon dioxide rose from Lake Nyos in Cameroon and asphyxiated 1,700 people. While the carbon had been sequestered naturally, it may give some indication of the dangers involved in sequestering carbon and storing it in areas of salinity.

In 2000 as part of their climate change and environment campaigns Friends of the Earth International (US) embarked on a platform to try to stop the World Bank from funding coal, oil and gas mining because the impacts on the world’s poor and indigenous communities were so devastating and because it had such negative impact on the environment. In 2000 the risks were far less hazardous than they are today. Climate change has increased the chances of a major catastrophe and the public are kept in the dark about the risks. What we get are the mixed messages.

On the ABCs Four Corners program on November 9, 2009 the Federal Resources Minister Ian MacFarlane made the point that he did not believe another coal fired power station would be built in Australia. Nor did he believe that clean coal would ever get off the ground. Given these comments the Victorian state government is way out of step with its federal counterparts and seemingly with the majority of Australians; so why is the Victorian government going ahead with coal sequestration and storage? Could they be pre-empting an increased value in carbon credits under the Carbon Emissions Trading Scheme? Could it be that we will not only be storing our own C02s but everyone else’s as well?