The Australia Institute says coal industry doing almost nothing to ease ‘energy poverty’

Peter Hannam, November 7 2014,  The Sydney Morning Herald
More coal won't necessarily improve the lives of the poor, a new report says.More coal won’t necessarily improve the lives of the poor, a new report says.

Claims by federal politicians that new coalmines in Australia would lift hundreds of millions out of poverty were merely echoing hyperbole by big mining companies, The Australia Institute said in a new report.

Prime Minister Tony Abbott described coal as “good for humanity”, while Environment Minister Greg Hunt said the planned expansion of the Abbot Point coal port in Queensland with its links to giant coalmines planned for the Galilee Basin “is about providing electricity to up to 100 million people in India”.

The Australia Institute, though, said coalminers were doing little to alleviate energy poverty directly and were exaggerating the link between coal use and economic growth.

Inquiries to major miners and industry groups revealed only minimal aid to the poor, and even then the assistance was usually in the form of solar panels or diesel generators – not coal.

“Coal generation is an expensive way to go about [alleviating energy poverty] and there are cheaper options out there,” said Rod Campbell, author of the All talk, no action report.

“Even coal companies are investing in other technologies” when giving aid, he said, citing BHP Billiton’s gift of solar panels in Pakistan as one example.

The report cited research by the International Energy Agency on Africa that found the cost of connecting communities more than three kilometres from the grid was about $US450 ($523) per megawatt-hour, often making alternatives more viable. Solar panels and small wind generators were less than $US300 per mWh.

In addition, big miners, such as Peabody Energy, also played up the importance of coal in sparking economic growth, describing the fuel as “a significant catalyst for economic growth”, the institute’s report said.

The link, though, is less causal than a correlation, Mr Campbell said: “It’s not coal use that’s making people busier and more productive – it’s the busier, more productive people who are sometimes using more coal.”

The debate over the role of coal has intensified in part because of coal’s higher carbon-dioxide emissions compared with gas and oil. The IEA, the United Nations Intergovernmental Panel on Climate Change and other global bodies say nations have a limited carbon budget to burn up if they are to avoid dangerous global warming.


The minerals industry, however, rejected the institute’s report.

“Claims that energy poverty is merely an issue of resources industry propaganda are as inaccurate as they are offensive,” Brendan Pearson, chief executive of the Minerals Council of Australia, said.

“There is no escape from extreme poverty without access to cheap energy, and the cheapest, fastest way to provide that electricity is through cheap, modern, lower emissions coal generation power,” he said.

The NSW Minerals Council described the report as  institute’s “latest media stunt in their ongoing campaign against the mining industry”.

“With almost three billion people globally without access to electricity, it’s no surprise that our major energy partners place a priority on providing cheap and reliable electricity to their populations,” Stephen Galilee, the council’s chief executive, said.

“It’s why global demand for thermal coal continues to grow, with increased volumes exported into all our major trading destinations, including the developing economies of China and India,” Mr Galilee said.

BHP Billiton said access to “affordable energy” was crucial to maintaining living standards and easing poverty, and fossil fuels – including coal – “can be expected to remain an important part of the energy mix for decades to come”.

For its part, Peabody said that coal “is at the heart of eradicating energy poverty”.

“It is absurd to suggest otherwise when world leaders, agencies and analysts all agree that [coal] has been – and will be – a major positive force,” the St Louis, Missouri-based company told Fairfax Media. “Coal lifted 650 million Chinese citizens from poverty since 1990 at a time when China’s GDP soared 850 per cent and use of coal-fuelled power increased eight-fold.”

Fairfax Media also sought comment from Mr Hunt.

Legal case

India’s Conservation Action Trust, the first foreign group to join legal action to stop an Australian coalmine, says more coal shipments to India alone would make little difference to alleviating energy poverty in the country.

The target of the action in the Queensland court is the Carmichael coalmine proposed by India’s Adani, which would have the potential to export as much as 60 million tonnes of coal a year through an expanded Abbot Point port.

“The high-quality, cost-efficient coal from the Carmichael mine is key to helping Adani light the lives of 100 million Indians,” a spokesman for Adani recently said.

However, Debi Goenke, executive trustee of Conservation Action Trust, said the mine would inflict only pollution on the poor and provide little benefit.

Many millions were struggling to get by on the equivalent of 50 cents a day and “have no capacity to pay for the electricity even if it arrives at their door,” Mr Goenke said on a recent visit to Australia. “Which 100 million are they talking about?”

An Adani spokesman said “providing affordable access to energy is a core focus of this company”, adding that other organisations such as the International Energy Institute had found inexpensive coal helps to decrease electricity prices.

The company had also spent money to improve communities, such as on health care and schools for “students from economically challenged backgrounds”, the spokesman said.