At the coalface
Putin’s actions provide Anthony Albanese with the justification he needs for scrapping the impost on coal miners. By Nick Cater.
It is four years since Anthony Albanese delivered the last rites for thermal coal predicting that the cause of death would be market forces.
“There’s no market for thermal coal,” he told ABC radio listeners in Melbourne. “What we are seeing globally is a shift to renewables. What we are seeing in India is a government that says that they will rule out importing coal in the next few years.”
Back then, the export price for coal was around $80 US a tonne. Today the price hovers at $350 US a tonne. Dozens of bulk carriers are parked off the Australian east coast waiting for a berth at congested coal terminals. Poland is desperate for our coal exports so they don’t have to pay for it in roubles. Exports to India are at record levels and the Adani mine in the Galilee Basin is up and running.
Seen through the eyes of the left, this is an egregious example of market failure. They’ve been telling us for over a decade that coal is on the way out. Coal mines, railways and port facilities were destined to be declared stranded assets by Monday week at the latest.
To the extent that the activists have succeeded in stopping the expansion of coal mining, the effect has been to push the value even higher. Since coal refused to die of its own accord, the Left’s best hope now is euthanasia administered through state intervention.
Labor, encouraged by both the unions and the Greens, is proposing a range of policies from a carbon tax to industrial relations to achieve what capitalism has failed to do. Should Albanese be elected on May 21, or worse form a coalition with the Greens in a hung parliament, the outlook for the resources sector is grim. We can be certain that when the House of Representatives next sits, the crossbench will be implacably opposed to coal mining, with the possible exception of Bob Katter. The Greens pledge to stop new investment in coal immediately and phase out thermal coal exports by the end of the decade. They will be in lock-step with the Teal Party, which as Brad Norrington exposed in The Australian last week, is beholden to funders with vested interests in renewable energy.
The Labor leader’s courtship of potential marriage partners in a hung parliament will be an awkward affair in which Albanese will find himself in the role of the half-pregnant bride. While he is no environmental ideologue, his statements on coal remain consistent with the views of his inner-city constituents, that is to say against the interests of the workers his party once represented. Albanese’s shallow endorsement of the coal industry since he became leader is nothing more than the pragmatic acceptance of political reality: Labor must win coal mining seats in NSW and Queensland if it wants to stay in the race.
The past performance of the Labor Party may not be a reliable indicator of future performance, as the small print says. It is worth noting, however, that the price of Greens support in the hung parliament 12 years ago was commitment to a carbon tax. This time Labor has one ready to go, albeit disguised as a safeguard mechanism.
Bit by bit, the untidy details of Labor’s energy policy are dribbling out. Energy and Climate spokesman Chris Bowen admitted last week that Labor, after all, will slap a carbon tax on large coal mines, in direct contradiction to previous statements by Labor candidates.
Bowen must be wearing blinkers. At a time when European nations are appealing to Australia to help them break Russia’s stranglehold on their energy supplies, we should be empowering the coal sector to meet the call, not burdening them with another tax.
Labor will further deter mining investment by appeasing the trade unions. Labor opposes the extension of Greenfield labour agreements from four years to six, despite the extra certainty it would give to mining investors. The Coalition’s proposal includes guaranteed minimum annual pay rises higher than the rate of inflation. Yet Albanese refuses to back it, instead obliging the naked self-interest of the ACTU.
While Australia has been absorbed in domestic politics, there has been a paradigmatic shift in energy policy in the rest of the world. In Europe, the invasion of Ukraine has exposed the folly of relying heavily on wind and solar backed up by Russian imports. German industry is being punished by high energy prices. The decision to scrap nuclear power made by former Chancellor Angela Merkel is obliging Germany to reinvest in fossil fuels.
German Chancellor Olaf Scholz has pledged to stockpile coal and gas reserves and build two liquefied natural gas terminals to break its reliance on Russia. Improbably, his decision has been backed by Scholz’s Green Party coalition partner. The Green’s former co-leader Robert Habeck, the minister for the economy and climate, declared in February that there are “no taboos” and the Greens understand the need for energy-policy trade-offs to support democracy and human rights. Those trade-offs include extending coal-fired power beyond 2030 and extending the lives of Germany’s three remaining nuclear power plants, which were due to shut down this year.
In California, America’s greenest and wokiest state, Governor Gavin Newsom is bugging Joe Biden for federal cash to keep the ageing Diablo Canyon nuclear plant running. That’s the same Diablo Canyon he promised to close down when he was elected in January 2019.
It is hard to over-state the significance of the shift in policy in the West. The energy crisis has exposed the danger of wishful green thinking which has played into Putin’s hands.
The consequences will be felt here sooner rather than later should Labor be elected with its rigid and dogmatic energy policy.
The proximate cause of the sharp rise in wholesale electricity prices that Albanese will no doubt seize as a stick to beat the government is the rise in the international price of coal and gas. The underlying cause, however, is the green coal and gas agenda that Labor has embraced. Life, as the slogan says, will not be easy under Albanese unless Labor is prepared to make trade-offs.
Putin’s actions have given Albanese the justification he needs for scrapping the impost on coal miners. Barring a second Scomiracle, we can only hope he has the courage to do so.