We had climate change political fireworks on Radio National Breakfast over the past few days. (17-Nov-2017, 20-Nov-2017). The most radical item on Friday was the report on a challenge BHP contradictions between their financial support for the Minerals Council of Australia, and BHP's public policy 'positions' on climate change mitigation. BHP in alliance with Rio Tinto, provides the MCA with about 60% of its funding. The MCA claims all successful responsibility for Australia's climate and energy policy failure.
At its AGM yesterday, BHP which is now the world's biggest mining company, told lobby groups and politicians to "back off" and let the market resolve Australia's energy impasse.
The ways in which BHP - Rio Tinto are corporate entities with infrastructure and profit needs can be concluded from the cumulative interference of the MCA in australian government policy and politics. The ways in which their public relations agrees with the scientific and public recognition of the processes and dangers of climate change is naturally a different department.
It has been made quite plain that BHP wants reliable base load power for its continuous copper smelting operations, at Olympic Dam in South Australia - SA, and other 24 hour mining operations elsewhere, and through the MCA lobbies for another Coal power station, to feed with its coal mines, and supply energy to its mineral operations. All the pressures and demands of the MCA on successive australian governments are representative of what BHP really wants, as profit making, mining entity.
Public relation concessions to climate change, as presented by BHP and Rio Tinto, appear to be a public relations sham. Mining companies and their profit making dependents cannot be expected to be different to what they are, and expecting sincerity in actions is like asking obligate carnivores like big cats to become vegetarian.
The corporate leaders of our energy, mining, transport and manufacturing sectors run profit making entities that will not work well in any other way. Competing energy supplies that do not need fuel to mined, and that may not support 24 hour supply are both direct competition and bring risks of profit destruction from process interruptions. BHP complained of losing $140 million because of the SA blackout, although I am very sure an equivalent value of copper ore did not magically disappear from the universe. Conservative politicians have then been feral in blaming renewable energy policy in SA for blackouts ostensibly caused by an extreme storm.
It is worth noting that theDirectors of Minerals Council of Australia include people expecting to directly benefit from having the Adani coal mine. Mr David Overall is Chief Executive Officer of Downer EDI Mining Pty Limited, which has a letter of agreement from Adani to build its railway line to the coast. Members of the NAIF board deciding on tax-payer backed loans for this infrastructure, also have stood down over direct conflicts of interest within the mining industry.
As a culpable party, with a profiteering stake in the Adani mine, and many infrastructure interests in Australia, Downer EDI is now a target for blockading actions by #StopAdani activists, even in Sydney. A few ParraCAN associates were present.
Fran Kelly: The Minerals Council campaigned against the chief scientists, Alan Finkel, clean energy target. And its been lobbying for a new government funded, coal fired power station. The Australasian Centre for Corporate Responsibility says that this undermines BHP's stated positions on climate change. Justine Parker spoke with the activist groups executive director, Brynn O'Brien.
Brynn O'Brien: BHP wants to see a resolution to the energy policy chaos that we've seen in this country over the last decade. They believe in climate change, they support a 2° world, they support the Paris accord. Now that is very difficult, if impossible to reconcile with the positions taken by some of these advocacy groups.
Justine Parker: You say the Minerals Council has a pattern of vociferous and influential lobbying which has obstructed progress on climate related policy. But shouldn't BHP remain as a member of council and try to influence the council's positions from within?
Brynn O'Brien: Look, that's been BHP's position over a number of years, and over that time period, the Minerals Council's position didn't improve, and in fact, they got worse. The Minerals Council boasts in fact, about getting rid of carbon price, they were really essential in undermining the Finkel review clean energy target recommendation and the policy has now been killed off. So we have said to BHP that influence from within has failed, you really need now to justify to your shareholders why you are spending their money on memberships of this organisation that acts against your interest.
Justine Parker: But is it not the case that the Minerals Council's position have strengthened since it incorporated the Coal Association, and now BHP needs to re-assert itself.
Brynn O'Brien: What we need to see in order for the Minerals Council's position to be consistent with BHP's is actually total policy reversal on some issues. So BHP supports the carbon price, the Minerals Council says that it was important in getting rid of one. BHP supported a clean energy target, the Minerals Council opposed it, which led to its death. So the climate policy graveyard in Australia that we are face with, is due in significant part to the activities of this organisation, and those activities, have in fact, undermined BHP's interests over time.
Justine Parker: This seems like an obscure topic to be discussing. Why should the broader public be concerned about our biggest mining companies membership of an industry body?
Brynn O'Brien: I think because of the amount of influence that this body, and other bodies like it, enjoy in our political climate. The Minerals Council has been a very significant influence on australian democracy over a long period of time. BHP as it's largest funder, should be expected to be held to account by the shareholders and by the community, for their role in supporting these activities, which have undermined our national ability to deal with climate change and energy policy.
Justine Parker: Did you propose this resolution simply as a way to target the Minerals Council, and is the aim to deny it of its biggest funding source?
Brynn O'Brien: The Minerals Council is funded 60% by BHP and Rio Tinto. I guess the purpose of our resolution was to really make BHP accountable for its decision, and ask BHP to take responsibility for its role in funding an organisation that has had such a negative impact.
Justine Parker: Would you like to see the Minerals Council de-funded as a result of your campaigning?
Brynn O'Brien: I think that if BHP came to a reasonable assessment of the historical and current behaviour of the Minerals Council and how how it aligns, or in fact doesn't align with BHP's policy positions and financial interests, I think that BHP would make the decision to stop funding the minerals council. Yes, I would like to see BHP terminate their financial relationship with that organisation.
Justine Parker: Now BHP had said, that by the end of this year, it will publish a list of what it calls the material differences between its positions on climate and energy policy, and the positions taken by the various industry associations of which it is a member. Does this go far enough for you?
Brynn O'Brien: We certainly welcome this move, but we don't think it constitutes a change on their historical approach. The review that's being proposed by BHP doesn't look at the damage that's been done over time. It also doesn't give the transparency guarantees that we are seeking. And the important thing that BHP's public response does not do is that it doesn't set a threshold for termination of memberships with any level of objectivity, so that shareholders can have confidence that the company is thinking about these things in an objective and rational way.
Justine Parker: Is it not simply a sensible decision for an enormous company like BHP to have memberships of a range of industry associations?
Brynn O'Brien: In ordinary circumstances, yes, it simply is a sensible commercial decision. But we aren't dealing with ordinary circumstances in Australia. We have had an extraordinary degree of climate and energy policy chaos over a long period of time. In these circumstances there need to be limits on what a relationship between a mining company that positions itself as a leader on these particular policy issues, and an industry organisation which is very much a laggard in these areas.
Justine Parker: Since you launched your campaign, the chief executive of the minerals council, Brendan Peerson, has resigned. Shouldn't BHP now remain as a member of the council and see if things are going to change with the new leadership?
Brynn O'Brien: The damage has been done already to the Minerals Council brand, almost by its own hand. I also think that the roots of these policy positions, within the Minerals Council, run deeper than any one individual.
Justine Parker: Given the debate your resolution has sparked, and the fact that things are changing on the ground, is this job done?
Brynn O'Brien: Look we think there have been some hopeful moments but, Australia doesn't have a robust energy and climate framework, BHP needs to be accountable for its role in this state of affairs. We believe that BHP should be more accountable to its shareholders, and more transparent.
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. - Adam Smith - Wealth of Nations
Australia's coal sales pitch to the world of climate change
Mr Steve Ciobo, minister for trade, tourism and investment, always talks up Australia's relatively better average coal quality, and this argument is frequently used to promote the Climate Change compatibility of Australian coal exports. By extension it gets used to help the political viability of Adani's Carmichael Coal Mine project in Queensland. Too bad that that the poorer quality of Galillee Basin coal does not measure up, and the project is dammed on nearly all considerations. Projects should be approved or not based on their own merits and costs, not average past performance. For coal companies these days, past performance is no indication of future results.
I head Mr Ciobo on RN breakfast radio this morning - 20/11/2017 , but as yet no link for his segment on ABC website has appeared.
Mr Ciobo said critics of australian coal exports are "living in a vacuum", because "Australian coal is better". This is exactly the MCA promotion line. It is a very poor argument for starting the Adani mine. The geology of the Galillee Basin has proven it to contain low quality coal resources by Australian standards. It is also 400 miles inland. It is true that Australia has good quality coal being mined close to our coastline. The very best has already been mined, and we and the world are left with a reducing average quality of coal, only extractable at increasing cost. Price paid is generally related to quality, so financially struggling coal power stations, as they are in India, are not likely to want the priciest coal, when the quality differential is low.
Adani conceded in court the ash content was about 26 per cent, roughly double the Australian benchmark. It is therefore hard to believe Adani's claim of a big reduction in "carbon footprint", using Galillee Basin coal compared to using Indonesian or Indian coal today. Adanis claims of 30-40 percent improvement need to be considered as unsupported exaggerations. Mr Ciobo's use of these claims show that Australian LNP excuses for a climate and coal policy are still derived entirely from the back of a coal industry sales brochure.
Getting out of coal, all together now
Other more important comparisons need to be made. Economics is not side of coal, banks and investors agree. It competes against the zero fuel costs and lower capital carbon emissions, and better reliability, of standalone or integrated renewable energy technologies. The LNP should count the costs of externalities, the costs to other people and future generations. People suffer the health costs of of breathing in the dark and tiny particles of coal burning pollution. There are the many future costs to 'other people' from climate caused by adding greenhouse gases to our atmosphere. The LNP is unable to distance itself from accusations it only cares about coal mates making money from coal deals.
The external costs of coal do really matter to governments of India and China, and most other nations signed up for the Paris climate treaty, because their peoples are most vulnerable to them. No need to wonder why coal power generation is being abandoned as fast as possible by India and China, and renewable energy investments are growing. I never hear our Australian government resource and investment ministers mention this. Mr Ciobo's and LNP climate and coal ideas are sales pitches from the Minerals Council of Australia. We don't need a change of government as much as Australia needs to rid itself of this pernicious coal lobby.
Our coal adds to our climate change
Australia is too vulnerable to climate change. We have had more frequent extreme weather, alternately with heatwaves, bushfires, then torrential rains with flash flooding. The rising rebuilding and re-insurance costs are familiar now to Australian voters in affected areas. Higher water temperatures and acidity are starting to exceed the Great Barrier Reef's limits for long term survival. Our popular coastlines will be encroached by rising sea levels. At risk are tourism industry jobs exceeding the total employment of the coal industry in Australia.
Our average atmosphere carbon dioxide is already too high, it has whizzed past 405 ppm, and growing at a rate of 3 ppm per year. This cannot be easily reversed, as carbon capture and storage is so far an expensive delusion.
The MCA ought to be declared an illegal organisation
Climate and Energy minister Josh Frydenberg also had a segment on today's RN, on the coal and anti-coal agendas at the Bonn climate talks. Mr Frydenberg admits of our dependence on coal, and boasted of the current adoption rates of renewable energy as a positive. Too bad other members of his government are still hooked by the Minerals Council of Australia, and our limited progress is despite, and not because of MCA climate policy blockade.
Atmosphere CO2 needs to be below 350 ppm to have a safe, stable climate system. China and India governments are planning and working to reduce their coal dependency and close coal power plants. The situation in China is that huge investments in renewable energy expansion are helping to shut down coal power plants, reducing China's carbon emissions and polluted air. In India, $15 billion dollars of coal power plants are for sale, going cheap, including Adani's, and no one wants to buy them.