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Carbon Pricing: First Reaction

July 13, 2011

Northern Power Station in Port Augusta

South Australian Premier Mike Rann spent yesterday touring the Upper Spencer Gulf – that is, Whyalla, Port Augusta and Port Pirie – the areas that Tony Abbott predicts will now be wiped out by a carbon pricing regime.

Mike Rann reports that OneSteel is eligible for a high rate of assistance and for $300 million to encourage investment and innovation in the steel industry. The assistance flows because OneSteel in Whyalla is classed as emissions-intensive, trade-exposed industry.

In Port Augusta Premier Rann met the mayor and spoke about the future of the Alinta-owned power stations. Alinta made it clear that the Northern Power Station will not close and neither will the Lee Creek coal mine which is expected to remain viable and productive until 2030. Alinta has said it intends closing the older and dirtier Playford coal-fired power station, but they will replace it with a gas-fired plant – this shift from carbon to cleaner fuel being the purpose of pricing carbon in the first place.

Then in Port Pirie the Premier detected only confidence about the future of Nyrstar smelter, which has plans to modernise their lead, zinc and silver operations to reduce lead and carbon emissions.

“The Upper Spencer Gulf Cities will also greatly benefit from the increased mining activity in South Australia, which has seen the number of mines increase from four to 17 in the past nine years, with another 30 in various stages of development.”

Meanwhile the joint bid by Peabody Energy and ArcelorMittal for Queensland’s Macarthur Coal – the biggest coal takeover in Australian history – settles Abbott’s scare campaigning in one blow.

Official government figures confirm that across Queensland and NSW there is $15.9 billion of coal projects, including rail and port works, that have started construction,. This activity is based on expected growth of more than 60 percent between now and 2015/16.

Yet The Australian today says this is just the tip of the iceberg and quotes another $20 billion in coal expansion plans.

The Abbott fear rhetoric already sounds hollow.

4 Comments
  1. July 13, 2011 5:22 pm

    What? “The Australian” actually publishing a news item that actually provides evidence for the Gillard Government’s Coal Price policy?

  2. July 13, 2011 6:42 pm

    The first thing you read on the Macarthur Coal web page:

    “Macarthur Coal Limited is the world’s largest producer of (seaborne) low volatile pulverized coal injection (LV PCI) coal product used for steel making. As a supplier to the world’s leading steel producers, Macarthur Coal exports its entire product around the globe.”

    Let me repeat, “Macarthur Coal exports its entire product around the globe”. Apart from Macarthur Coal paying more for the diesel that runs its trucks and plant, it’s not impacted much by the carbon tax with comparison to coal miners supplying coal to domestic power stations.

    So Chinese and Korean and Indian steel makers will benefit from cheap Australian coal, whilst Australian energy consumers (ie, everyone of us) gets slugged with higher energy costs.

    How is that a good outcome?

    As for the $300 million that OneSteel is getting – where is that money coming from? From whose pocket will that money be extracted from first? What other expenditure has been foregone in order to give OneSteel that money? After all, there’s no “money tree”. There’s just taxpayers, like you and me.

  3. John Carroll permalink
    July 13, 2011 7:33 pm

    The Abbott fear campaign maybe hollow but it must be hoped that it is the people (voters) who are not vacuous.

    It is a lot to expect the self interested to become objectively analytical, but in light of recent media issues in the UK, perhaps a degree of scepticism could slowly dawn on those that take their information from limited and biased outlets.

  4. July 13, 2011 8:01 pm

    mostly you will find that the private sector is undertaking these sort of initiatives without incentive or compliance requirements because it makes good economic sense and ensures the sustainability of their businesses. In the same way that Coca Cola has 32 water recycling plants around the world. Legislation is only needed to round up the stragglers and the cynical opportunists. Thanks for the insider information on this Bob.

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