Adani’s Carmichael Mine and Australia’s cult of coal



If construction for the Carmichael Coal Mine, mooted to be larger than London, finally goes ahead this year, it will cement Australia’s status as a dismal outlier on energy politics. Its politicians appear prepared to sacrifice all considerations—be they environmental, land rights, or economic—at the venerated altar of coal. It seems the bad boys and girls of yesteryear, their Christmas stockings always full of coal, have grown up to run the country and projected their resulting tortured fetishisation of coal onto the luckless country.

Should the proposal survive its remaining legal challenges, a colossal mine complex, consisting of five open cut mines and six pit ones will be constructed in remote central Queensland by the shadowy Adani Corporation. It will be one of the world’s largest. It will also be in direct contravention of the government’s pledged dedication to fighting climate change, locking in decades of emissions. As Bill McKibben writes, ‘You can’t have both the Paris climate agreement and Adani’s Carmichael coalmine. Full stop’.

Yet both Federal and Queensland State governments have not merely approved this project—they are rolling out the red carpet. Proving that cloying servility to the resources sector is not merely the monopoly of the political right, QLD Labor declared the project ‘critical infrastructure’ in order that its approval might be fast-tracked. Meanwhile, the Federal government is mulling a $1 billion loan so that Adani can construct a 189km railway linking Abbott Point to the mine in the Galilee Basin. Federal Labor is marginally better, ruling out the lavishing of Commonwealth funds on the operation, but refusing to block the project from going ahead.

This highlights the outsized influence of fossil fuels when it comes to Australian politics. More recently, Australia’s ruling party, the Coalition, have elevated their pro-coal sentiments into a peculiar form of political theatre. Last month, Treasurer Scott Morrison addressed the parliament, brandishing some hardened, black orb telling the Opposition to not be afraid. A striking symbolism was at play here. The literal use of coal as a prop can be seen as a performative denial that coal is ceasing to be the prop it once was for the global economy.

Equally dramatic has been the strange assuming of a role previously unfamiliar to the coalition: concerned bleeding hearts. When he was resources minister, Josh Frydenberg remarked on approving the mine, saying ‘I think there is a strong moral case here, it will help lift hundreds and millions of people out of energy poverty, not just in India but right across the world’. Current Resources Minister Matt Canavan has essentially repeated the claim, albeit with a dash more inanity. Perhaps most outlandishly, former environment minister Greg Hunt commented that we were past the colonial days of dictating to less powerful nations their best interests… and therefore had to approve a $16 billion mine operated by a company accused of fraudulently overcharging their domestic constituents.

It is here instructive to recall the claims, directed against the Carbon Tax circa 2010, that Australia couldn’t act alone on climate change. Now that everyone but Australia seems to be finally fronting up to the challenge, these arguments have quietly been abandoned. The ‘we can’t act until the rest of the world does’ motif has been retrospectively unveiled, revealing rank hypocrisy. These new, odd-fitting moral arguments leveraged to support coal are ever as disingenuous. Perhaps they should cease their hopeful tugging on the heartstrings of the Australian people and cut those connecting them to their resource sector puppet masters. The resort to moral arguments, moreover, reads as a tacit admission that the economic ones don’t hold up.

Let’s position this in the context of the global market and outlook for coal. China hit peak coal in 2014, and has recently announced the abandonment of 85 coal-fired power stations, in order that it might comply with its energy plan. India, meanwhile, is rocketing towards solar, with the aim of installing 100GW of solar capacity by 2022. The Indian Energy Minister has called for the Indian private sector to be weaned off coal imports as solar becomes ever cheaper. The International Energy Agency has indeed warned that the viability of massive coal mines such as Adani could be compromised by slowing demand of growing economies like India.

In Southeast Asia, particularly industrial up-and-comers like Indonesia and Vietnam, coal demand is set to rise until 2020, but the outlook from thereon is highly uncertain. Coal demand from beyond 2025 is expected to drop sharply. The viability of the Adani coalmine depends on an extremely optimistic reading (to put it mildly) of the trend of coal demand in Asia. All these nations are moving to diversify their energy makeups, and have made commitments to reduce their greenhouse gas emissions, such as the INDCs agreed to under the Paris framework.

If you’re in doubt as to whether this is the right prognosis for coal’s fortunes, consider that no private financiers are willing to fund new coal-fired power stations in Australia. This comes from a report commissioned by the Turnbull government. Similarly, the only reason the government is considering the $1 billion loan to the Adani Group is because of the latter’s inability to secure private backing. Of the major Australian banks, so far only Westpac is yet to definitively rule out funding this project. This brings us to the next bewildering act in Turnbull’s troupe—the contortionist performance when it comes to free market economics.

The fierce opposition of Australia’s hard right to decisive action against climate change has twisted their usual commitment to free markets. At one point, it made sense to argue that, bereft of considerable subsidies, renewables were unable to compete against fossil fuels. However, as a tipping point has emerged and the odds have shifted against coal—to the point where zero private backers will consider new coal stations—clearly Australia’s ruling politicians have decided that they support coal and corporate welfare before they support the free market. Polling confirms that this is contrary to the wishes of voters, who nominated health, education and renewables as their preferred destination for public funds.

Opposition to action on climate change has even perverted the aesthetic taste of coal’s acolytes. As prime minister, Tony Abbott took a tilt at wind farms, calling them ‘visually awful’ (open cut coalmines, contrastingly, are of course sublime and beautiful). It’s only appropriate, given the hopelessly quixotic nature of the government’s quest to maintain the supremacy of coal.

The folly of allowing a disreputable foreign corporation to construct Australia’s largest coal mine, subsidised by taxpayer dollars, into a flat world market for coal, delivering a negligible amount of enduring jobs, when climate authorities have told us that most of the remaining fossil fuels must stay in the ground, should be apparent to all. This is not merely a poor policy choice, about which reasonable people can disagree. This is a monumentally bad idea that combines environmental disaster with economic recklessness. Parlour tricks and histrionics aside, the truth is clear: so fixated, so obsessional, has Australia’s cult of coal become, that coal’s fortunes are to be valued above any and all rational considerations.

Jack Shield was the July-December 2016 Climate Change and Energy Security Fellow for Young Australians in International Affairs.

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