Energy & Nuclear

On Monday I read in The Australian that the NSW Land and Environment Court ruled Centennial Coal had failed to adequately consider the impact of greenhouse gas emissions from its proposed Anvil Hill coal mine in the Upper Hunter and so the approval it got from government for its environmental assessment is void. So at least for the moment the new coal mine is not going ahead. It has taken a couple of days for me to digest this information. The judgment is radical, if not surprising, and perhaps worth considering in some detail.

According to the judgment: “The area of land which constitutes Anvil Hill has a deposit of approximately 150 million tonnes of thermal coal. The proposed open cut mine will produce up to 10.5 million tonnes of coal per annum. The mine is intended to operate for 21 years. The intended use of this coal is for burning as fuel in power stations in New South Wales and overseas. There is an existing contract for sale of coal to Macquarie Generation, which operates the Bayswater and Liddell power stations. About half the coal is intended for export for use as fuel in power stations to produce electricity generally in Japan. There is no dispute that burning of coal will release substantial quantities of greenhouse gases into the atmosphere.”

At issue was whether the Director-General from the Department of Planning was legally bound to require greenhouse gas impacts of burning coal by third parties in environmental assessment of new coal mines … whether ecologically sustainable development principles were taken into account.

In deciding that the environmental assessment lodged by mining company Centennial Coal in respect of the Avil Hill Project was inadequate and therefore that the approval from the relevant government department was “void and without effect”, the Judge commented that:

“Burning coal to produce GHG [Greenhouse Gas] emissions in NSW will be conducted in activities subject to regulation under the EP&A Act. Overseas burning of the coal is also likely to be subject to overseas regulation. The release of GHG from power plants is likely to be subject to increasing regulation nationally and internationally. Technologies relating to GHG are developing and may change over the next two decades.”

“…The fact that an assessment of GHG emissions alone was required demonstrates that regard was intended to be had to the future impacts of GHG. The problem of climate change/global warming is an increasing problem which is recognised by the Director-General in taking into account the environmental concern about GHG emissions by requiring an analysis of these and that must include the effect on future generations.

“… ESD [Ecologically Sustainable Development] requires that there be integration of environmental and economic considerations in decision making about projects. The Director-General required GHG to be assessed in the environmental assessment and therefore clearly intended that it be taken into account.

“…The Applicant argued that while the decision is a subjective one reached by the Director-General it nevertheless raises a legal question. The Applicant’s counsel argued that the Director-General had to ask himself two questions in relation to the environmental assessment, (i) did the environmental assessment comply with the EAR [Environmental Assessment Regulation] and (ii) if not, can it be said that it generally complies with those requirements. As the environmental assessment provided did not contain a detailed analysis of GHG in conformity with the EAR it was clear that the Director-General did not ask himself the first question and he therefore fell into legal error.

“…Given the quite appropriate recognition by the Director-General that burning the thermal coal from the Anvil Hill Project will cause the release of substantial GHG in the environment which will contribute to climate change/global warming which, I surmise, is having and/or will have impacts on the Australian and consequently NSW environment it would appear that Bignold J’s test of causation based on a real and sufficient link is met. While the Director-General argued that the use of the coal as fuel occurred only through voluntary, independent human action, that alone does not break the necessary link to impacts arising from this activity given that the impact is climate change/global warming to which this contributes. In submissions the parties provided various scenarios where this approach would lead to unsatisfactory outcomes such as, in the Director-General’s submissions, the need to assess the GHG emissions from the use of ships built in a shipyard which use fossil fuels. Ultimately, it is an issue of fact and degree to be considered in each case, which has been recognised in cases such as Minister for Environment and Heritage v Queensland Conservation Council Inc and Another (2004) 139 FCR 24, by the Full Court at [53].

“…The Applicant’s Points of Claim challenge the Director-General’s opinion that the environmental assessment prepared by Centennial was adequate because he failed to take into account ESD principles, particularly the precautionary principle and the principle of intergenerational equity. … the precautionary principle—namely, that if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

“… If the DG had adopted a sceptical approach to the climate change issue, and had declined to require the EA to address this (or to address downstream GHG emissions) because of this scepticism, and if in so doing he had failed to consider the precautionary principle, then there may be basis for legal complaint. That is not this case.

“…I also conclude that the Director-General failed to take into account the precautionary principle when he decided that the environmental assessment of Centennial was adequate, as already found in relation to intergenerational equity at par 126. This was a failure to comply with a legal requirement.”

Read the full judgment here: http://www.lawlink.nsw.gov.au/lecjudgments/2006nswlec.nsf/61f584670edbfba2ca2570d40081f438/dc4df619de3b3f02ca257228001de798?OpenDocument

I reckon, based on the tangle of legislation currently in place in Australia, that the judgement was inevitable. A real problem into the future is that governments (from both sides of politics) have enacted legislation based on environmental campaigning that is unreasonable. They have enacted legislation that is at core about stopping development including through use of the precautionary principle, rather than weighing up the costs and benefits of resource use.

Last night Australia’s Prime Minister, John Howard, announced an inquiry into a possible carbon trading scheme for Australia. He was speaking at the Business Council of Australia Annual Dinner in Sydney and the Ambassadors of both the United States and Indonesia were present. Towards the end of his speech, which was very much about Australia’s economic outlook, he said:

“I do want to say something about the related issues of climate change and energy security. And I very deliberately link the two of them because you can’t think of the reaction of relevant countries to climate change without understanding the importance to them of energy security. And some of the heightened concern about climate change issues in recent months – indeed in recent years – are very directly related to energy security. And we need to understand some fundamentals about the two of them, put bluntly, there is no way that a country is going to embrace climate change measures or responses to the growth of greenhouse gas emissions, which in anyway imperial the energy security of that country. And this is particularly so of countries such as China and India, countries which are for the first time in four or five hundred years reclaiming, particularly in the case of china, reclaiming their position in the world economy, enjoying extraordinarily rapid economic growth – economic growth which is very largely fuelled and supported and facilitated by cheap suppliers of energy from countries such as Australia, but also from their own and from other sources – and to expect a country like china to embrace change in relation to the climate, which in some way imperials the energy security, just at a time when it is beginning to enjoy the fruits of economic growth and remarkable rates of economic growth, is to expect the unachievable and the unrealistic.

I think it is important to keep the challenge of climate change in perspective. I share your President’s view that it is happening and although I have been accused and continue to be accused of being somewhat of sceptic on the issue, the truth is I’m not that sceptical, I think the weight of scientific evidence suggests that there are significant and damaging growths in the levels of greenhouse gas emissions and that unless we lay the foundation over the years immediately ahead of us to deal with the problem, future generations will face significant penalties and will have cause to criticise our failure to do something substantial in response.

The debate of course is about the intensity and the pace of the damage being done by climate change and there will continue to be very intense debate about that. We’ve made it very clear that we won’t ratify the Kyoto agreement – we took that decision some years ago because we feared that ratifying that agreement in the form in which it then and still largely exists, could have damaged the comparative advantage this country enjoyed as a result of our abundance of fossil fuels and the importance of that abundance to Australia’s export and general performance – and nothing has happened to alter that fact. In the meantime, however, we have committed ourselves to achieve the target of 108 that was given to us at the Kyoto meeting in 1997 and we are on track to achieve, or as near as dam it, achieve that outcome within the time stipulated.

I think it’s very obvious, both from what Michael Chanay said, and from what others have said in recent weeks, that we do need to find, call it what you may, a new Kyoto. We do need, as a world community, to try and find a new global solution and that global solution must include all of the major emitters. And we have to understand some of the fundamentals that drove the original Kyoto. The original Kyoto was largely fashioned, I don’t say this critically, I hope I say it objectively, it was largely fashioned to accommodate the environmental goals and position of European countries. It was built with not sufficient regard to the position of a country such as Australia, a highly developed country which was a net exporter of energy, and therefore I think the formation of AP6, which includes in aggregate, almost 50 per cent of the world’s emitters, also close to 50 per cent of the world’s population and also close to 50 per cent of the world’s GDP, that particular grouping can provide an extremely sure foundation for the development of a new international covenant or new international understanding on this issue.

It is imperative from our point of view that as we look at such issues as an emissions trading system that we fashion here in Australia, and see fashioned globally, a trading system that protects the natural advantages that this country has. This country does have enormous natural advantages of our resource industries, not only coal and gas, but importantly uranium as well. And let me say that, something I’ve said on a number of occasion in recent weeks, and that is that there is no one single solution to the global challenge. We need to maintain the profitability that our great abundance of fossil fuels has given us, we need to accelerate the development of clean coal technologies, and the like, that were identified two and a half years ago in the Energy White Paper, we need to recognise that at the purifier, but not as a contributor to base power load generation, renewables, such as solar and wind can make a valuable contribution and we also need to recognise the capacity, particularly as we develop clean coal technologies with the inevitable consequences they have for pricing, we need to examine and keep on the table the nuclear option. It is some years off but in a couple of weeks time Dr Ziggy Switkowski ’s committee will report and it, will I hope make available in a very objective fashion, the analysis of nuclear power, both in terms of safety availability, supply and the economic of it in the whole climate change equation.

I’ve indicated in the past that I do not intend to preside over policy changes in this area that are going to rob Australia of her competitive advantage in the industries that are so important to us and I repeat that commitment tonight. I do welcome the contribution that the Business Council has made and many other people in the business community have made to tackling this issue. Many of you will know that over the past few weeks the Government has reiterated its broad approach and later this week I will meet some significant business figures, some of them are in the room tonight, who are involved in the resource sector to discuss aspects of the Government’s response to the climate change challenge.

I want to indicate to you tonight that the Government will establish a joint government business task group to examine in some detail the form that an emissions trading system, both here in Australia and globally, might take in the years ahead. I think it is important to involve the business community in an analysis of this issue because decisions taken by the Government in this area will have lasting ramifications for Australia’s business community. I think we all recognise that we have to examine in the time ahead how we might devise an emissions trading system which properly cares for and accommodates the legitimate interests, and therefore maintains, the competitive advantage that this country enjoys in the industries that are familiar to you.

We do not want a new Kyoto that damages Australia. We need a new Kyoto that includes Australia but includes Australia on a basis which is appropriate to our interests and our needs. So therefore I indicate to you tonight that we will be establishing, in discussion with the Business Council of Australia and other business groups and individual business leaders, a joint government business task group that will examine, against the background of our clearly identified national interests and priorities, what form an emissions trading system, both here in Australia and globally, might take to make a lasting contribution to a response to the greenhouse gas challenge, but in a way that does not do disproportionate or unfair damage to the Australian economy and the industries which have been so enormously important to the generation of our wealth and the development of our living standards over the last 10 or 20 years.”

The annoucement would have caught many commentators by surprise. Indeed just yesterday the Australian media was reporting a possible rift between the PM and his Treasurer, Peter Costello, on climate change because over the weekend the Treasurer had publicly endorsed the idea of a carbon trading scheme for Australia post Kyoto, from 2012. No doubt he knew the PM would announce the same, officially, last night.

Its all good timing with Ian Campbell, Australia’s Environment Minister, over in Nairobi at the United Nation’s Climate Conference. The government appears to be branding its new approach to climate change the ‘new Kyoto’.

According to ABC Online:

“The president of BP Australia and member of the Business Roundtable on Climate Change, Gerry Hueston, has told Radio National Breakfast it is a welcome initiative.

“It’s important now that the big emitters like the US and China and potentially India come on board because their involvement is the thing that’s going to actually make the big difference,” he said.

The executive director of the Australian Conservation Foundation, Don Henry, has also welcomed the announcement.

He says the Government should now set a target for reductions in carbon pollution.

“The crucial thing in any emissions trading scheme is first and foremost what cap, what reductions in greenhouse gas emissions you’re going to require,” he said.”

In a recent column for The Land (26th October) I wrote that there is a place for government policies which promote carbon sequestration with particular reference to logging trees, woodland thickening and also biochar:

“Actively growing trees sequest carbon dioxide and harvesting this timber moves the stored carbon from the forest to the wooden product, be it a railway sleeper or bridge girder.

Rates of carbon sequestration slow as forests age with old growth forests storing but not sequesting carbon.

But environmental activists don’t much like the idea of actively managing forests as this involves cutting down trees.

So we end up using materials like concrete, steel and aluminum whose production involves lots of energy – and lots of carbon dioxide emissions.

Indeed, early this year, the Federal Government supported the Australian Rail Track Corporation’s decision to no-longer use timber railway sleepers.

In the future, the 400,000 railway sleepers it buys each year will be concrete, which according to Mark Poynter from the Institute of Foresters of Australia this will result in an extra 190,000 tonnes of carbon dioxide emissions each year.

At the recent Australian Environment Foundation conference, Mr Poynter put this in perspective by explaining that while the Victorian government has promoted wind farms as part of its renewable energy strategy (estimated to be saving 250,000 tonnes of greenhouse gas emissions per year), about 75 percent of this saving has, in effect, been negated by the decision to use concrete rather than wooden railway sleepers.

While every bit perhaps makes a difference, the really large carbon savings are in our rangelands.

Well known ecologist, Dr Bill Burrows, has calculated that grazed woodlands in Queensland alone sequest about 35 million tonnes of carbon dioxide each year.

Indeed if woodland thickening was including in Australia’s official Greenhouse Inventory we might not need any more wind farms.

Incredibly, because of the way the Kyoto Protocol is framed, Australia’s national carbon accounting system counts savings from the banning of broad-scale tree clearing, but not carbon savings from regrowth or woodland thickening in western NSW and Queensland.

What about counting the carbon in woody weeds converted into biochar – a charcoal with soil ameliorant properties – created through the type of low temperature patchy burns once practiced by Aborigines?

It is perhaps time for environmental activists as well as state and federal governments to open both eyes when it comes to global warming and start accurately considering all the opportunities and costs of carbon sequestration in our forests and rangelands.”

It’s certainly time for the bureaucrats to start consider all the big mechanisms for carbon sequestration, if the PM has really rolled over on the idea of a carbon trading scheme.