May 2010


King Coal

By Guy Pearse
King Coal

Glenn Beutel has heard of The Castle but has no plans to see the film about a suburban family who win a David-and-Goliath battle to save their house from an airport expansion. Glenn’s plight is immediately reminiscent of that beloved Australian film, though: he is the last remaining homeowner in the tiny town of Acland, on Queensland’s Darling Downs, standing in the way of an open-cut coalmine. Yet, I mention the film tentatively, knowing that, although the script of his story is still being written, there’ll be no fairytale ending.

Glenn’s castle is not his house, but the public garden and war memorial into which his parents poured so much time and effort. “Mum had enormous empathy for our servicemen. A dressmaker during the war, she spent many mornings sewing military colours onto uniforms. She was pleased to do it for nothing.” There was a roll of honour in Acland’s public hall, but for her it was “a shame it wasn’t where everyone could see”. So she helped raise funds for a proper memorial and, since its establishment in 1991, Anzac Day has had a real focal point. Largely thanks to her and her husband’s years of voluntary work greening the town, Acland won the Inaugural Tidiest Town in Queensland award in 1988–89. Yet just before she died, when she asked the council to help maintain the median strips, one councillor scoffed that “we will bulldoze the lot”. When she requested that the bottle trees she had planted be retained, a senior council official quipped, “Looks like that went over her head.” Unlike Glenn’s mother, they were pretty confident Acland would be replaced by a coalmine. The insensitive treatment of a frail old lady still incenses Glenn.

The Beutels had always been proud of Acland’s coalmining heritage. Glenn’s father had worked in the old Acland colliery, which operated from 1927 until 1984. Glenn worked in mining elsewhere but always returned to the place where his family had, literally, put down deep roots. No one imagined that downtown Acland would be mined simply because coal lay a foot beneath the surface. Back when New Hope Coal commissioned Stage 1 of the new mine in 2002, it was far enough away for the company name not to sound too off the mark. The exodus began in 2005 when it became clear the company would probably win approval for Stage 2, which was to bring mining right up to the edge of town. Beutel says the company assured people in late 2004 that it wasn’t looking to buy Acland properties but at a town meeting in mid-2005 New Hope announced it was now interested. Almost overnight, people sold up, shut shops and the school was closed. Many thought they had to sell; others couldn’t imagine staying.

By the end of that year, about 85% of the town had been sold off. A few people stayed on, renting properties that had been sold to the company. The buildings were carted off one by one. The Uniting Church where Glenn attended Sunday school as a kid was converted into half-a-dozen shops by the highway near Toowoomba. As people left, looting began. At all hours of the day, the few remaining residents would see out-of-towners trashing houses and stealing anything they could get their hands on. When challenged, the unfamiliar faces would protest, “It’s all gonna be bulldozed and mined!”

In March 2007 the then deputy premier, Anna Bligh, came to town to officially launch Stage 2. By late 2008, the Courier Mail declared Beutel “the last man standing” in Acland. The first hints for Glenn to leave town were subtle enough. He acknowledged but disregarded most of the company letters enquiring of his interest in selling; he told a company man who showed up with a huge Christmas hamper, “I don’t want it. You’ve ruined all my Christmases.” More recently, the company’s environmental consultants and lawyers have moved in: now he receives letters threatening legal action, trees near his property have been felled and his relatives have been harassed.

I ask whether, rather than razing the park and shifting the memorial, the company ever offered to incorporate them into the mine plan. The ex-lobbyist and spin doctor in me steals the wheel for just a moment: “What a no-brainer. Turn this green patch into a little lookout on the edge of the mine – perfect spot for showing off the place to visiting VIPs, and saving that memorial is great PR! If it shifts this bloke so we can get moving, it’s got to be quicker and cheaper than having all those lawyers and consultants on our teat.” Glenn laughs hesitantly before confirming that if he had been guaranteed that his parents’ work could be saved, he would probably have shifted. But the company has never made such an offer. “That’s part of the horror, they want everything”: his town, his house and the ‘castle’ his family built.

It all seems so gratuitous. The Stage 3 Expansion Project – an open-cut mine right under Acland itself – was brought forward by New Hope in an ultimately unsuccessful bid to supply the Tarong power station. Yet, the company is pressing on anyway with upbeat talk about export markets and coal-to-liquids. Glenn is amazed at how the climate impacts of the coal rush are glossed over. New Hope Coal claims to be “clearly focused on minimising its carbon footprint”, but admits the mine will generate more than 700 million tonnes of CO2 over the life of the project, equivalent to more than 4% of Australia’s current total each year for 30 years.

Ultimately, Glenn knows he’s stuck between a combustible black rock and a very hard place indeed. It’s unclear just how close to his house mining may be allowed to occur or to what extent compensation might apply. The “just terms” constitutionally guaranteed in The Castle seem to be anything but in the real world. Far from the cities where most Australians live, on thousands of properties, the plot of The Castle is being replicated – but with a very different ending. The greatest coal rush the world has seen is being conducted as if climate change is not happening, and coal is king.

It wasn’t always this way. Coalmining has a long history in Australia, but coal wasn’t an important export until the last few decades. Before 1960, Queensland had no coal-export industry. Most of the coal mined was used to fuel state-owned power stations, or BHP’s Newcastle and Illawarra steel mills. As recently as 1981, Australia was but a minor medallist in the global coal trade – exporting less than half as much coal as the US. But just as climate change inconveniently peeked over the horizon, Australia started to bet big on coal. As recently released cabinet documents reinforce, the Fraser government, with strong support from the eastern states, decided to use cheap coal to attract energy intensive investment. State governments provided export infrastructure, low royalties and long-term sweetheart deals between state-owned power generators and industries such as aluminium smelting. The demise of BHP’s steel production in Newcastle, the rise of Asian demand and a UN climate convention that let fossil-fuel exporters off the hook by counting emissions where fuels are burned were just some of the many green lights given to coal exporters.

The coal push became a rush, and Australia quickly became headquarters for a global trade that bakes as it booms: our thermal coal pushes cheap and dirty electricity on many countries, and our coking coal and iron ore underpin an Asian boom in the use of blast furnaces, the most emission-intensive steel-making option. (In developed countries, most steel is produced in electric arc furnaces fed with either scrap metal or direct reduced iron, which can be made without coal.)

Yet, the coal industry remains a benign abstraction for most, not much more than a hum of economic and political waffle on the periphery of everyday life: “biggest export, thousands of jobs, economic backbone”, “‘clean coal’ on the way”. Many link coal to global warming, but conclude that coal exports are a necessary evil. Few appreciate the incomprehensible magnitude and pace of the current rush, or ponder its climate-changing consequences. Right now, around 120 mines across New South Wales and Queensland export more than 280 million tonnes of black coal annually (Victoria’s vast brown coal reserves have not been economically viable as an export proposition).

Coal used to be labour intensive: in 1908 it employed more than three-and-a-half times as many people (as a share of Australia’s population) as it does today. The process is now largely automated. Coal is extracted with the help of gargantuan dragline excavators, hauled by three-storey-high trucks to piles from which conveyor belts tip it into freight trains, which can be 100 carriages long and take three locomotives to shift. It then clatters and grinds its way to one of nine coal terminals dotted along the east coast of Australia, where ships queue to ferry loads of up to 200,000 tonnes to ports around the world. Along with all the diesel and electricity used to extract and transport coal, mines release large quantities of methane, a greenhouse gas 23 times more potent than CO2. But these emissions pale in comparison with those released when the coal is burned offshore. A single train might carry a load that will generate the annual emissions equivalent of 6000 cars, a ship the equivalent of more than 90,000 cars. With every tonne of coal generating 2.7 tonnes of CO2, our exports generate more than 750 million tonnes of CO2 annually – much more than the emissions occuring in Australia. The plan to double exports before 2020 puts us on track to overtake Saudi Arabia as the world’s largest carbon exporter in the next 15 years.

There’s really no physical limit on the rush. Australia’s recoverable coal reserves are estimated at 40 billion tonnes; there’s enough to increase exports for the rest of this century. Around 40 new export mines or expansions of existing ones are under way, thousands of kilometres of new railway track are being laid, and new coal terminals are being built (and existing ones expanded) to handle a doubling of exports. The scale of the expansion makes it easy to forget that the industry is the result of more than a century of deliberate and generous government subsidy. Most coalmines built in the first half of the twentieth century were government-owned. When coalmining, power generation and railways were virtual state-run monopolies, it made sense to co-locate rail and power infrastructure close to the mines. As coal has become an export commodity and domestic power has been opened up to competition, the coal industry was gifted an unassailable competitive advantage courtesy of the taxpayer.

Nothing captures the government’s role in developing Australia’s coal industry quite like the eulogies to Sir Joh Bjelke-Petersen. As Bob Katter Jr put it, were you to remove the close relationship between Sir Joh and Sir Leslie Thiess from history, you would “erase the coal industry from the face of Queensland”. Having paved the way for Thiess (along with Mitsui and Peabody) to establish Queensland’s first big export mines, Bjelke-Petersen championed the expansion of the coal industry, assisting with substantial infrastructure and a five-cents-a-ton royalty rate that companies such as Utah and Mitsubishi found impossible to refuse. As a young MP, Katter had serious doubts about public investments that he saw as “irresponsible risk-taking”; now he says Joh was nation-building. However, there’s no mention of the jury finding that Sir Les bribed Sir Joh so he would win coal projects, and no mention of the 453 million tonnes of CO2 that Queensland’s coal exports now add to the atmosphere annually. Taking all this into consideration, Katter’s youthful caution looks inadvertently prescient: it was irresponsible risk-taking, and it will come back to bite us.

Only not just yet, as successive generations of politicians and bureaucrats have decided that doubling the stakes to stay at the table is the way to avoid paying coal liabilities. Just keep playing, and let the next generation cash in what’s left of the chips. Having spent billions subsidising coal exports into existence, governments won’t walk away. That would mean having to say “no” to friends and ex-colleagues: to Australia’s largest coal union (the CFMEU), which has regularly been federal Labor’s biggest external donor; to coal baron Clive Palmer whose Mineralogy Pty Ltd is the biggest external donor to Queensland’s Liberal National Party; and to former premiers, treasurers and ministers now paid by the coal industry. It would also mean saying “no” to senior politicians on both sides of politics who have recently made what locals call “fortunate purchases” of rural properties on which coalmining is anticipated. The media tips a 200% to 500% return on these properties, but only if the coal rush rolls on.

Governments are behaving as if the more hopeless their coal addiction, the less likely it is they will be asked to quit. Not a single Australian coal-fired power station has been closed to reduce emissions. Antique 1960s power stations are being dusted off, and a dozen new ones are in the planning stage. Much of the coal rush is only viable thanks to government subsidies to build, for example, ‘missing link’ railways. Queensland is currently spending more on coal-related infrastructure ($15.6 billion) than it has made from coal royalties over the past decade ($11.4 billion). For that $15.6 billion, the government, in partnership with the private sector, could replace more than one-third of Queensland’s existing coal-fired power stations with renewable energy generators. Instead, the “smart state” wants to spend it on doubling the amount of ‘world-class’ coal it exports. It also wants to salve Queensland’s budget by privatising coal-related port and rail assets, thereby hooking more private investors to the coal addiction.

In NSW the planning laws have been rewritten so that protections that would normally apply can be swept aside by ministerial fiat once a project is declared to be of state significance – which most coalmines are. Although 16 NSW rivers have been permanently damaged by careless mining – mainly as a result of subsidence caused by long-wall coalmines – the government is happy to consider coalmines underneath the water catchments of Sydney and the central coast. Calls for a kilometre-wide buffer around rivers and aquifers have been dismissed. Meanwhile, the Keneally government is getting back to the business of buying its own coalmines – even though the estimated value of the coal-fired power assets it is looking to privatise has reportedly fallen from $35 billion to $6 billion in just over a decade.

In Canberra, Kevin Rudd calls the coal industry “the backbone of regional Australia”. His resources minister, Martin Ferguson, regards new coal-fired power stations as inevitable and warns against holding back coal export growth. With the explicit aim of doubling exports, federal environmental approval and billions of dollars in subsidies are being given to expand port, rail and road infrastructure. And billions more are propping up pilot projects to help maintain the illusion that ‘carbon capture and storage’ might clean up Australia’s coal industry. On the other side of politics, where climate-change sceptics choose the leader, one of Tony Abbott’s first items of business was visiting a Hunter Valley coalmine to declare that this “great industry” should flourish – not merely survive.

When Shenhua funds a new rural health clinic in Gunnedah, when Rio Tinto’s Coal & Allied sponsors Newcastle’s NRL team, when BHP Billiton and Xstrata fund drought-relief concerts by the Sydney Symphony, coal stealthily locks in permanency. With each state-owned coal asset that is privatised, an implicit guarantee is given that the coal industry’s expansion will be unfettered. But it is not the governments addicted to coal that are the victims; most victims of the climate chaos being fuelled by Australian coal are yet to be born in places like Bangladesh and sub-Saharan Africa. The ordeal of the more immediate victims of the rush – Glenn Beutel and the thousands like him – is unknown to most Australians.

Lance Batey and his wife, Kate, have never heard of Acland, but they’re living a similar nightmare. They moved to the Mudgee region ten years ago after a decade living on a yacht. Before that, Lance ran one of Sydney’s roughest pubs, eventually leaving hospitality to put the brawls behind him. Now he’s fighting three coal companies that are encroaching from all sides. He and Kate deeply regret the move. The relentless expansion of mining has made their dreams of growing grapes for the local wine industry impossible. When Lance tasted diesel in his home brew, he knew coalmining dust was contaminating his tank water. Now, like everyone else here, he drinks bottled water and has a chronic cough. The fresh air is gone, as is the peace and quiet. At least once an hour a 2-kilometre long train thunders past, just 300 metres from his house; the noise lasts 15 minutes, and the trains run 24 hours a day. Once the expansions of the nearby mines are complete (and the railway upgraded using federal funds), the trains will pass twice as often.

The nearby village of Wollar is atrophying. Half its residents have left and, with all the noise, most of the mine workers know better than to live in town: they live 40 kilometres away in Mudgee where you can still get a good night’s sleep. “You try finding a mine manager who lives near a mine,” Lance challenges. “We have no option. We can’t sell the house.” It sat on the market for four years without a single nibble, and real estate agents simply said, “It’s too close to coalmines.”

“There’s no market for people like us. No one but a mining company would buy and they’re not hurrying.” Lance talks for hours about his battles with a range of bureaucracies over noise, dust and water contamination, but it boils down to what he calls “Rule Number One – the company wins in every case.”

The stories are much the same wherever you go across the widening and tightening black-coal belt in New South Wales and Queensland: in Acland, Alpha, Camberwell, Chinchilla, Felton, Gunnedah, Mudgee, Muswellbrook, Stratford, Stroud, Wandoan and Wyong, to name but a few. It’s the same whether people are living on sprawling properties that have been farmed by the same family for generations, on lifestyle blocks or in small country towns where, ironically, the “tree changers” moved to get away from the noise and pollution of the city.

Initially, some like the idea of a new mine or extension; coal companies thrive on the divide-and-conquer dynamic this creates in communities. Companies speak of peaceful coexistence, of only being interested in the ridge country, of “not wanting to come through the fence”. Prominent locals are hired to help with community relations; councils and businesses think dollars and jobs. The mines start 20 or more kilometres away; they don’t wake you at night – and you don’t notice the dust. As new permits are granted, the mines converge, and small villages sell up. The complaints intensify: wine tainted by coal dust, livestock not eating dust-covered grass, sick horses, dairies refusing milk from the area, creeks drained like bathtubs overnight. Then, the larger towns – which boomed initially with the influx of mine workers – start noticing the dust, and hearing the inexorable grinding of diesel machinery. As a parasite moves on its host, the mines feast on a town, looming on all sides; then residents find themselves at the bottom of the property market unable to get out. The community rethinks its position, but it’s too late. The inevitable exodus has left them without economic diversity and doubly dependent on coal.

Along the way, even committed community opposition is no match for the mines. Lacking resources and clout, volunteers spend countless hours writing submissions in response to environmental impact assessments, parliamentary inquiries and public consultation processes. They research the minutiae of regulations meant to protect them against excessive exposure to noise, dust and other amenity loss. They gather evidence, taking pictures of cracked and polluted riverbeds, and botched grouting repairs. They research the demonstrated health impacts of the industrial “infra-noise” that keeps them awake all night. Traumatised and consumed, they chase their tails, learning Rule Number One over and over: the company wins in the end.

Only in its wish to delve under the prime agricultural land atop the headwaters and aquifers of the Murray– Darling has the industry confronted formidable opposition. Farmers on the Liverpool Plains and the Darling Downs have the resources and know-how to give mining companies a black eye – old money affords lawyers, consultants and media advisers. Recently, the Caroona Coal Action Group in the Liverpool Plains scored a significant courtroom victory, with a Supreme Court judge finding that access arrangements being used by a BHP Billiton subsidiary to prospect under an exploration licence granted in 2006 were invalid because banks and others with an interest in the land were not consulted. A temporary headache for the industry, it’s also a golden opportunity for coal-addicted politicians to make mining laws even more miner-friendly. The food-versus-coal campaigns could spark a rethink of Australia’s support for the coal rush – and become much more than localised “NIMBY” battles. However, this seems unlikely; much of the support base of these campaigns is highly conservative and sceptical about climate change. These are people like Alan Jones: Jones grew up in Acland and describes the town’s decline as sickening and repugnant, saying Glenn Beutel should “Stay there. Bugger them!” – but he also calls climate change “‘junk science”.

So the coal rush rolls on, with no one really challenging the legitimacy of coalmining in the face of climate change – and with people like Barnaby Joyce in the midst of it all telling us we should ignore the “environmental goose-steppers” and consider mining coal in Antarctica as well. Few realise that Australia will soon become the world’s biggest carbon exporter. And with few exceptions, no one wants the fight. Most can’t imagine our economy would still double in size by the mid-2030s if we phased out coal production entirely. We know precious little about what’s being gambled on coal: the rivers, farms, towns, schools, war memorials, families and countless dreams. Perhaps it’s time we started asking “What’s the rush?”

Guy Pearse
Guy Pearse is a research fellow at the Global Change Institute, University of Queensland, a former political adviser, lobbyist and speechwriter, and the author of High & Dry and Quarterly Essay 33, ‘Quarry Vision’.

Coalminers' world tour
Phillip Adams and Guy Pearse in conversation on Late Night Live

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