BHP has already made similar calculations in terms of standing by its existing coal assets but not strongly publicly pushing their role or growth in BHP’s portfolio. It prefers to quietly acknowledge the returns while emphasising the need for action on climate change.
This included forcing a change of approach and leadership at the Minerals Council of Australia in 2017. It threatened to withdraw from the organisation because its then chief chief executive, Brendan Pearson, was considered too assertive about the need to back coal and coal-fired power generation. No surprises who won.
Even the Australian banks have been scared into backing off financial support for new coal mines or coal-fired power stations because of fear of being targeted by environmental activists.
But the economic and political contradictions can’t be so neatly squared away in a country so heavily dependent on coal as its most valuable export, recently overtaking even iron ore. The strength of that trade continuing – and at improved prices – is not only vital for Josh Frydenberg’s budget. It would also help underpin Labor if the opposition wins the election.
Thermal coal, for example, is now trading at under $US90 a tonne, below last year’s record high of just over $US100 a tonne. Most analysts are predicting it will rise again this year to be just under $US100 due to the level of demand v supply. Hardly a collapse.
Political hypocrisy is one commodity certainly never in short supply.
In a speech praising the importance of mining to the Minerals Council last week, for example, Bill Shorten didn’t mention the future of Adani. He only mentioned the actual word “coal” once in a passing reference to support for jobs in the industry.
Unfortunately for Labor’s attempts to gloss over the differences until after the federal election, unions in Queensland are now loudly complaining about Labor’s refusal to back the development of the $2 billion mine. Their ambition for the creation of new, relatively high paying coal jobs at Adani is politically potent, particularly in areas of relatively high unemployment. And in terms of internal ALP politics, the preference for jobs is a strong counter to the anti-coal push by the party’s environmental activists.
Adani has spent years getting through various federal and state approvals but the state government still threw in a last minute blockage suggesting the miner owners had not done enough to protect the black throated finch – a claim the company dismisses as a biased tactic to stop the mine. Queensland deputy Premier, Jackie Trad, has been successfully driving the resistance to the mine from the partys’ left faction.
But the battle within Labor has now spilled into the open just ahead of the need of both sides to win seats in Queensland. And Richard Marles’ subsequent “clarifying” statement conceding the “important and enduring role” of coal in the transition to more renewables won’t stop that fight from intensifying.
The Coalition is trying to position itself as the pro-jobs alternative on Adani. But it too knows the electoral popularity of greater use of renewables and community support for action on climate change.
Despite the the urgings of some of his backbenchers to quit the Paris agreement on emissions reductions, Morrison understands how politically lethal this would be. Instead, he follows his immediate predecessor in insisting the Coalition is “technology neutral.” He can’t repeat often enough Australia will meet its target of a 26-28 per cent reduction in emissions on 2005 levels by 2030 while warning Labor’s much higher ambitions would wreck the economy and lead to higher energy prices.
So far, however, the attack on Labor’s “reckless” energy promises doesn’t seem to be penetrating too far into the public consciousness. The Morrison government looks more vulnerable over its own promise to get energy prices down.
The Coalition can’t make the link between emissions reductions, reliability and price register sufficiently with voters. Instead, voters register more the brutal demise of Malcolm Turnbull on the issue leading now to the much lamented exit of Julie Bishop. It’s all too hard.