The politics of Coal Down Under
Republished from World Coal July/August 2019 issue https://www.worldcoal.com/magazine/world-coal/register/
Many readers may be aware that Australia faced a national election on 18 May this year.
Less well-known internationally though was how issues surrounding coal played an integral role in the outcome. For the record, the conservative Liberal government led by Prime Minister Scott Morrison defied most commentators and poll predictions, securing a win with an increased majority in the parliament.
While elections are about an array of issues, in the coal seats of the exporting states of New South Wales and Queensland opposition Labor members and candidates recorded strong swings against them. In the two heartland coal seats of both states surrounding Newcastle and Rockhampton, these adverse swings were over 14%.
Various seats in North and Central Queensland were expected to be retained or won by the Labor Party, but this did not go to plan for the major opposition party, making it difficult for them to achieve a change in government. Moreover, seats outside the coal-producing areas did not record any shift to the Labor Party. It is apparent there was a reluctance in blue-collar areas to support the party traditionally more aligned to their interests.
So, what was behind this disaffection with the Labor Party? Part of the explanation can be found in two prominent coal issues in the public debate for at least the past three years. Firstly, the proposal by the Adani group to start a new thermal coal mine in the Galilee Basin in Central Queensland, and secondly, the near-crippling rise of Australian electricity prices for business and households.
Many would be aware the Adani project – which involves a coal development in a new basin – had become a totemic issue for the environment movement, and they systematically sought to stop the project by whatever means possible through protest and on-going legal challenges. The disruption became a mainstream news item and was taken up by the urban-based media, where opposition to the project was apparent amongst inner-city voters far away from the mine site, 2000 km further south.
This interference annoyed Central and North Queensland residents, and their view was echoed across many mining and non-mining seats in regional Australia. These constituencies understood coal development means well-paid jobs in sometimes struggling areas and the opportunity for economic expansion.
The anti-development stance also exposed a raw nerve in mainstream Australia, who are cognisant of the overall contribution of the mining sector to the country’s prosperity. They saw little sense in stopping one particular coal mine when growing demand from India would quickly seek out an alternative source, and this would most likely be lower quality coal.
In the lead up to the May election, the Labor Party at the national and state level was perceived as unsupportive of the coal industry and the Adani project, with some senior parliamentary members actively wanting to see a demise in thermal coal exports. The Labor Party policy even argued coal workers should be ‘transitioned’ to more suitable employment.
They had calculated this would win more support in inner-city seats than they would lose in regional or outer suburban seats where there was a core of support for great Australian industries, such as coal production.
After the election and following the rebuff at the polls, the ruling state Labor Party in Queensland belatedly approved the go-ahead of the Adani’s Carmichael project, while the federal Labor Party was also forced to moderate its anti-coal posture.
The next issue that was and continues to be at the front of many Australians’ minds is the rising cost of electricity. The impact of rising prices brought about by the partial displacement of coal for mandated and highly subsidised renewable energy cannot be underestimated. This has had a substantial economic impact by rendering energy intensive industries less internationally competitive, but more immediate is the political implication where struggling household budgets find it an increasing burden to air condition their houses in summer and heat them in winter.
Australians understand that the future energy mix may well change. However, casting aside the contribution coal-fired power can make in terms of its inherent reliability and affordability is met with scepticism. Indeed, Labor proposes a much more aggressive switch to renewable energy, thereby eroding the dominance of coal at over 70% of the national electricity market.
This issue remains unresolved. However, outside the progressive inner-city seats, there is support for realistic initiatives to lower electricity costs, including for new build high efficiency, low emission (HELE) coal plants, which offer the cheapest and cleanest energy for Australian households and businesses.
The lesson from the last election is that many Australians in the outer suburbs and regions recognise the importance of the country’s long-standing bedrock industries and their valuable economic contribution. This includes the coal industry, which provides over 150 000 direct and related jobs and at AUS$66 billion in 2018, Australia’s largest export earner.
The Labor Party miscalculated this level of support, as Prime Minister Morrison credited his win on election night to “quiet Australians.” Encouragingly, there are now signs of a more accommodating and hopefully politically bi-partisan approach to the future of our export coal industry.
Looking ahead, strong demand for high quality Australian coal dictates that cumbersome processes should not unnecessarily delay approvals for new coal mine developments and expansions. For its part, the Coal Council of Australia will work closely with the Australian government to achieve both growing exports, and for high efficiency coal plants to be part of the country’s electricity grid.
Greg Evans, Chief Executive, Coal Council of Australia
Image: courtesy of www.bulkhandlingreview.com.au