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You can find the current article at its original source at https://www.theguardian.com/australia-news/2018/jul/02/matt-canavans-optimistic-coal-forecast-contradicts-his-own-department
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| Matt Canavan's optimistic coal forecast contradicts his own department | Matt Canavan's optimistic coal forecast contradicts his own department |
| (about 3 hours later) | |
| A senior federal minister has claimed new coal export figures strengthen the investment case for Adani’s Carmichael coalmine and the development of Queensland’s Galilee basin, but a report from his own department appears to show the opposite. | A senior federal minister has claimed new coal export figures strengthen the investment case for Adani’s Carmichael coalmine and the development of Queensland’s Galilee basin, but a report from his own department appears to show the opposite. |
| The Department of Industry, Innovation and Science released a report on Monday that included projections for global commodity prices and volumes. | The Department of Industry, Innovation and Science released a report on Monday that included projections for global commodity prices and volumes. |
| A story in the Australian claiming coal was set to regain its spot “as the nation’s biggest export earner”, overtaking iron ore in 2018-19, quoted the resources minister, Matthew Canavan, as saying “the market conditions are right” for Queensland’s Galilee basin to start digging up large amounts of coal. | A story in the Australian claiming coal was set to regain its spot “as the nation’s biggest export earner”, overtaking iron ore in 2018-19, quoted the resources minister, Matthew Canavan, as saying “the market conditions are right” for Queensland’s Galilee basin to start digging up large amounts of coal. |
| Coal is the dirtiest fuel on the planet and emissions from its use as a source of heat and energy make it historically the single largest threat to our climate. | Coal is the dirtiest fuel on the planet and emissions from its use as a source of heat and energy make it historically the single largest threat to our climate. |
| But it is also the largest source of electricity in the world, providing 41% of our electricity needs. | But it is also the largest source of electricity in the world, providing 41% of our electricity needs. |
| Clean coal relies on a series of technologies known as carbon capture and storage (CCS). In 2015, the International Energy Agency calculated that CCS could help reduce global carbon emissions by 13%, delivering a huge chunk of reductions needed by 2050 to keep below a 2C rise. | Clean coal relies on a series of technologies known as carbon capture and storage (CCS). In 2015, the International Energy Agency calculated that CCS could help reduce global carbon emissions by 13%, delivering a huge chunk of reductions needed by 2050 to keep below a 2C rise. |
| CCS technology aims to capture carbon dioxide generated at coal plants and store it underground in rock formations and aquifers. | CCS technology aims to capture carbon dioxide generated at coal plants and store it underground in rock formations and aquifers. |
| But so far no major coal power plant has managed to make CCS work on a grand scale. Costs have proved prohibitive - especially as low natural gas prices have made coal uncompetitive. | But so far no major coal power plant has managed to make CCS work on a grand scale. Costs have proved prohibitive - especially as low natural gas prices have made coal uncompetitive. |
| “At current prices we’d be mad not to open up the Galilee basin as soon as possible,” he was quoted as saying. | “At current prices we’d be mad not to open up the Galilee basin as soon as possible,” he was quoted as saying. |
| “Opening up the Galilee would generate 16,000 direct mining jobs and tens of billions in taxes.” | “Opening up the Galilee would generate 16,000 direct mining jobs and tens of billions in taxes.” |
| The report says the combined value of metallurgical and thermal coal exports will be $60.2bn in 2017-18, behind iron ore at $61.8bn. | The report says the combined value of metallurgical and thermal coal exports will be $60.2bn in 2017-18, behind iron ore at $61.8bn. |
| It says coal exports will be slightly lower at $58.1bn in 2018-19, and that iron ore earnings will be even lower at $57.7bn, as falling iron ore prices drive export earnings lower. | It says coal exports will be slightly lower at $58.1bn in 2018-19, and that iron ore earnings will be even lower at $57.7bn, as falling iron ore prices drive export earnings lower. |
| The Australian characterised that event as coal reclaiming its mantle as the nation’s “top export earner”. | The Australian characterised that event as coal reclaiming its mantle as the nation’s “top export earner”. |
| But the Department of Industry report says coal export earnings will quickly drop below those for iron ore again, as global coal prices continue to fall. | |
| It shows in 2019-20 coal export earnings will be just $51.1bn, while iron ore earnings will be $55.4bn. | It shows in 2019-20 coal export earnings will be just $51.1bn, while iron ore earnings will be $55.4bn. |
| The report cites a projected decline in the global price for thermal coal as the reason for the drop in coal export earnings. | The report cites a projected decline in the global price for thermal coal as the reason for the drop in coal export earnings. |
| The value of thermal coal exports is expected to decrease by 14%, from $23bn to $19bn, in 2019-20. | The value of thermal coal exports is expected to decrease by 14%, from $23bn to $19bn, in 2019-20. |
| The spot price of thermal coal is likely to fall from an average of US$99 a tonne in 2018 to US$74 a tonne in 2020, according to the Department of Industry. | The spot price of thermal coal is likely to fall from an average of US$99 a tonne in 2018 to US$74 a tonne in 2020, according to the Department of Industry. |
| “The sharp decline in 2019–20 export earnings will be the result of a forecast decline in prices, which is expected to more than offset the impact of minor growth in the volume of thermal coal exports,” the report says. | “The sharp decline in 2019–20 export earnings will be the result of a forecast decline in prices, which is expected to more than offset the impact of minor growth in the volume of thermal coal exports,” the report says. |
| The report says metallurgical coal export earnings are also forecast to decline over the next two years, by 5.7% to $35bn in 2018–19, and by another 11% to $32bn in 2019–20, as lower prices offset rising export volumes. | The report says metallurgical coal export earnings are also forecast to decline over the next two years, by 5.7% to $35bn in 2018–19, and by another 11% to $32bn in 2019–20, as lower prices offset rising export volumes. |
| The metallurgical coal spot price is forecast to decline from an average of US$193 a tonne in 2018 to US$148 a tonne in 2020, with the impacts of improved supply combined with weakening demand from China expected to outweigh growing demand from India. | The metallurgical coal spot price is forecast to decline from an average of US$193 a tonne in 2018 to US$148 a tonne in 2020, with the impacts of improved supply combined with weakening demand from China expected to outweigh growing demand from India. |
| The shadow energy minister, Mark Butler, said the figures from the report were being misrepresented. | The shadow energy minister, Mark Butler, said the figures from the report were being misrepresented. |
| “Minister Canavan and PM Turnbull may think it’s their job to present this as a booming market, but the Australian people, especially those living and working in thermal coal communities, deserve to be treated with respect and intelligence,” Butler said. | “Minister Canavan and PM Turnbull may think it’s their job to present this as a booming market, but the Australian people, especially those living and working in thermal coal communities, deserve to be treated with respect and intelligence,” Butler said. |
| “This is not a booming market, it is one in long-term structural decline as the world moves to lower-pollution forms of electricity generation to address climate change. | “This is not a booming market, it is one in long-term structural decline as the world moves to lower-pollution forms of electricity generation to address climate change. |
| “We need to manage the ongoing transition in our economy, including the long–term structural decline of thermal coal, with policies to create new jobs and industries and deliver a just transition to thermal coal communities. Anything short of that is selling workers, communities and our collective future short.” | “We need to manage the ongoing transition in our economy, including the long–term structural decline of thermal coal, with policies to create new jobs and industries and deliver a just transition to thermal coal communities. Anything short of that is selling workers, communities and our collective future short.” |
| Matt Canavan | Matt Canavan |
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