Martin Ferguson just loves brown coal. Would have it with lunch, if he could. Thinks we’ll be shipping it out of the Latrobe Valley by the megatonne. The current Victorian government is equally excited about the idea, as was the previous one. But don’t worry about those pesky greenhouse emissions, because it’ll be green, too!. New technology will mean that emissions from brown coal will be “less than 0.2 tonnes of CO2 per megawatt-hour”, or less than half that of modern gas-fired baseload plants, according to the Brown Coal Innovation Network.
Wonderful. Great aspiration – and I support money being invested in CO2 capture and storage. Even if it arrives too late to clean up coal, we’ve still got to do something about steelmaking, and most likely we’ll have to do some air capture of CO2 in the long term future to get us back to a safe climae.
But let’s look at reality for a moment, and particularly as it applies to brown coal. Victoria’s brown coal has precisely one virtue as a fuel – it’s available in abundance in Victoria. It’s also virtually free – for a very good reason. Nobody else would want to buy it, because it’s too dangerous to ship anywhere.
The “new technology” proposed to export Victoria’s brown coal – “the next Pilbara”, though the next Newcastle might be a more accurate description – is essentially to heat-dry it. Once that’s done, it’s proposed to use coal gasification technology in new power stations, possibly combined with carbon capture and storage, to generate electricity with much-reduced greenhouse impacts.
However, there’s two issues here. Firstly, even in the current market where developing country customers are not particularly concerned about greenhouse impacts, why the hell would you buy Victorian brown coal when there’s plenty of black coal on the market, and plenty more sitting in the ground waiting for mining in Queensland and Indonesia – both closer to those markets?
And as for brown coal gasification, let’s just note that despite large piles of government money, HRL has just suspended its plans to build one of the things here, due to a VCAT decision that makes approval for the plant contingent on the federal government signing contracts to shutter some of the state’s older brown coal plants.
For what it’s worth, I’m not convinced that the policy outcome of the tribunal decision is optimal here, but the fact is foreign customers aren’t going to invest in unproven brown coal shipping and gasification technology when it can’t even be shown working on a commercial scale in its home state – particularly as there’s likely to be a glut of very cheap natural gas coming on the market in the next couple of years when the United States becomes a net natural gas exporter.
You should never say never, but I find it very, very, very hard to see how brown coal will ever be a viable export commodity even ignoring the moral dimensions. The Victorian government, however much it pines for mining royalties like Queensland and WA, needs to get over the delusion that brown coal is going to become a tradeable commodity in any relevant timescale.