CoalWire 130, April 21, 2016

April 21, 2016

editor’s note

Community challenges to coal pollution in India continue with two separate panels finding power companies flagrantly flouted environmental standards. In Australia, the Victorian Government has taken decisive action to force three mines – which produce a little under half the coal used in the country – to dramatically increase rehabilitation bonds. The shift towards cleaner energy and away from coal exports has seen US coal production plummet. Meanwhile, BHP Billiton – the world’s largest mining company and a major coal producer – has been trying to sweet-talk financial analysts into believing that global action to limit a 2°C temperature increase, or less, won’t be all that bad for the company despite their coal exposure.

Bob Burton
CoalWire Editor

features

Behind the scenes BHP Billiton fears for thermal coal’s future

Barely a day goes by without one or more coal lobbyists proclaiming thermal coal still has a rosy future, but behind the scenes BHP Billiton fears otherwise, writes Bob Burton in EndCoal.

Tweet: Behind the scenes #BHPBilliton fears for thermal #coal’s future http://bit.ly/1MIRcdH @bobburtonoz

China to suspend new coal power plant approvals

China’s National Energy Agency will introduce a new policy mechanism that will tell 28 out of China’s 31 mainland provinces they should suspend approvals for new coal plants, writes Zachary Davies Boren in EnergyDesk.

Tweet: #China to suspend new #coal power plant approvals http://bit.ly/1NkRAiq @zdboren pic.twitter.com/YPefjDBGY3

campaigns

 Norwegian sovereign wealth fund dumps 52 coal companies

Fifty-two coal mining and power companies have been excluded from the Government Pension Fund Global, Norway’s sovereign wealth fund. Companies the fund divested from include Coal India and NTPC in India, China Shenhua CLP Holdings in China, Whitehaven Coal in Australia, AES and CONSOL Energy in the US and Aboitiz Power Corporation in the Philippines. The fund’s remaining coal investments will be reviewed by the end of 2016. (Norges Investment Bank,Guardian)

Tweet: Norwegian sovereign wealth fund dumps 52 #coal companies http://bit.ly/1XHYij8 #Norway #climate

Philippines climate agency urges shift away from coal

The Climate Change Commission, the lead national policy agency on climate, has urged the Philippines government to review its energy policy and “step away from coal” and instead “tap more renewable resources” to meet the country’s growing power demand. The Philippines has 27 proposed coal plants with a combined capacity of over 4400 megawatts (MW) under construction and a further 3100 MW proposed. (Climate Change Commission)

Tweet: #Philippines #Climate Change Commission urges government to move away from #coal http://bit.ly/1qCGOcR

top news

US coal production in nosedive: An analysis of US Mine Safety and Health Administration (MSHA) data shows US coal production has fallen by over 18 per cent since 2011 and in 2015 alone was down over 10 per cent on the year before. In 2015 coal production was 815 million tonnes. Preliminary MSHA data indicates Peabody Energy’s North Antelope Rochelle mine, the largest Powder River Basin mine, cut production in the first quarter of 2016 by almost one-third compared to the year before. (SNL)


White Rose CCS plant rejected: The Secretary of State for Energy and Climate Change, Amber Rudd, has refused planning permission for the proposed White Rose Carbon Capture and Storage project in the UK. The plant was proposed to be a coal and biomass-fired 448 MW project with Carbon Capture and Storage (CCS). During the assessment of the project the company disclosed the project was “heavily dependent on Government funding.” As a result of the company stating it had no alternative source of finance after the UK Government abolished the US$1.4 billion CCS Competition in November 2015 Rudd refused development consent. (National Infrastructure Planning Inspectorate)


Indonesian President vows to ban new permits in forests: President Jokowi Widodo has foreshadowed a presidential decree putting a moratorium on new permits for mining in forest conservation areas. While environmental groups have welcomed the announcement they caution that decrees, which are weaker than legislation, have lacked enforcement. They also note that vast areas of mining permits have already been issued so the immediate impact on the coal industry is likely to be minimal. (Wall Street Journal, Greenpeace)


Indian coal pollution riles review panel: A three-person panel, headed by a former Madras High Court judge, has recommended “severe and retrospective” penalties for three coal plants responsible for fly ash and water pollution of Ennore Creek near Chennai. The panel found fly-ash dumping had reduced the depth of the creek from over 4 metres to less than half a metre. The panel also recommended a moratorium on further developments until the Kosasthalaiyar River was restored to a healthy state. (Times of India, The Hindu)


Indian panel scolds NTPC for flouting need for covered wagons: A panel of the Ministry of Environment and Forests found environmental standards were violated by NTPC’s transport of coal in open wagons from its Bilaspur mine to the Sipat power station in Chhattisgarh. When the plant was approved in April 2002 it was stipulated the coal be transported in closed wagons. The panel recommended NTPC investigate measures to reduce coal dust emission and review the short and long-term impacts on the health of residents within one-kilometre on either side of the railway line. (Livemint, AsianAge)


Major reforms for Victorian mines: The Victorian Government has announced a major health package, air-monitoring stations and other measures in response to the recommendations of the inquiry into the 45-day long fire in the Hazelwood mine. The government also announced that rehabilitation bonds for the three mines in the Latrobe Valley would be increased from US$32 million to US$197 million by January 2017 to bring them in line with the mine operators’ own estimates. The government’s decision has been welcomed by Voices of the Valley and Environment Victoria. (Premier of Victoria, Environment Victoria)

From where I’m sitting, if the point of CCUS [Carbon Capture Use & Storage] is to reduce CO2emissions, EOR [Enhanced Oil Recovery] is about the last thing it should be used for. On the other hand, if the point is to redistribute vast amounts of money, it’s off to an excellent start,” writes Thomas W. Overton, an associate editor for POWER magazine.

news

Australia: Queensland bans underground coal gasification after sued company goes bust.


Bangladesh: Barge owners press government to drop ban on Shela river route through Sundarbans.


Germany: Coalition deal gives [in German] Greens energy ministry lead in lignite-mining state of Sachsen-Anhalt.

Sri Lanka: Environmental group considers legal action over flawed EIA for proposed coal plant.


US: Environmental groups file petition challenging new permit for Plaquemines coal terminal.


US: Landfill owner sues community group over criticism of Alabama coal ash dump.

companies + markets

Vattenfall agrees to sale of German coal projects: The Swedish government-owned utility Vattenfall has agreed to sell to the Czech company EPH its three wholly-owned coal plants, a 50 per cent stake in another and four operating lignite mines in Germany. Vattenfall will record a US$2.7 billion writedown on its assets and provide €1.7bn in cash as part of the deal. The sale agreement, which has been rejected by environmental groups, has yet to be reviewed by the Swedish Government and is not expected to be finalised until August. (Financial Times,The Tree)


Polish government rescue plan inches forward: Polish mining unions have agreed to a wage cut to allow the government-brokered split of the loss-making Kompania Weglowa (KW) into two. The eleven most viable mines will be transferred into Polska Grupa Gornicza, which will commence on May 1 with US$394 million invested by state-owned companies. While the European Union bans government subsidies for ongoing operations Poland is seeking to argue the funding – paired with wage cuts – is aimed at ensuring future mine profitability. (Reuters, Reuters)


BHP Billiton reviewing role in Colombian and Indonesian projects: The November 2015 tailings dam disaster at the Samarco iron ore mine in Brazil has had repercussions. BHP Billiton wants to ensure that, where it is a shareholder in a joint-venture mine, either it – or one of its partners – is also the mine operator. BHP Billiton is reviewing its role in the Cerrejon coal mine, the largest in Colombia, which is operated by the Cerrejon Coal Company (CCC). BHP Billiton is equal one-third owner of CCC along with Glencore and Anglo-American, with the latter seeking to sell its stake. BHP is also reviewing its role in developing the new IndoMet Coal Project in Indonesia. (The Australian, Reuters)


Analyst flags met coal crash: Financial analyst Morningstar concedes it has not been “bearish enough” on the likely decline in Chinese steel production and now estimates it will fall from the current 765 million tonnes to about 650 million tonnes by 2020. It argues rising scrap metal availability will boost steel produced from electric arc furnaces and undercut demand for metallurgical coal. Morningstar estimates the long-term price for metallurgical coal could be US$75 a tonne. (Morningstar)


Czech and Romanian mines cast about for lifelines: The government of the Czech Republic continues to negotiate with the major shareholders of New World Resources over the possible bailout or bankruptcy of OKD, its coal subsidiary. A minor shareholder has offered to buy OKD, which employs about 13,000 people, and keep it operating for a further five years. However, the terms of the offer have not been disclosed. Last week there was also a protest march by Romanian coal miners pressing the government to bail out the coal mine and power plant owned by Complexul Energetic Oltenia. (Reuters, Politico)


Annual Japanese thermal coal price falls:Tohoku Electric Power and Glencore have agreed on a thermal contract price of US$61.60 a tonne for April 2016-March 2017. This is over 9 per cent lower than last year’s price. Glencore has supplied between 20 and 40 million tonnes to Japan in recent years. While the initial contract price for the Japanese financial year has traditionally set the benchmark price, analysts believe the introduction of retail electricity competition in April is pushing utilities to negotiate deals at lower prices. (Platts, Reuters)

resources

Coal Report: Turkey’s Coal Policies Related to Climate Change, Economy and Health, Istanbul Policy Center, April 2016. (Pdf)

This 88-page report reviews the health and economic impacts of coal use in Turkey and the implications of the major proposed expansion of coal power.

The National Pollutant Inventory (NPI), Clean Air Action Network, April 2016.

Environmental Justice Australia (EJA) finds the latest data reveals a rapid growth in air pollution originating from the coal industry. EJA has also published the spreadsheets with the supporting data.

Tweet: New data shows #AirPollution death toll still higher than car accidents Alarmed? Take action http://www.cleanairaction.net.au/npi_take_action pic.twitter.com/lb1z83avP5

The incompatibility of high-efficient coal technology with 2°C scenarios, Ecofys, April 2016. (Pdf)

This 22-page report demonstrates the deployment of high-efficient, low-emission coal power plants, as promoted by coal lobby groups, is incompatible with the Paris Agreement aims of limiting global average temperature rise to well below 2°C above pre-industrial levels.