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Adani and NEG

October 19th, 2017

I’ve published a couple of articles. One, in the Guardian , expands the argument of this post on Adani. The other, in The Conversation, is a response to the Turnbull government’s energy policy, which managed some remarkably good press, though that seems to be fading away as the realities become more evident.

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  1. Svante
  2. John Quiggin
    October 19th, 2017 at 15:16 | #2

    Thanks, fixed now.

  3. I am and will always be Not Trampis
    October 19th, 2017 at 15:33 | #3

    The conversation article was a bewdy I thought so I highlighted it.

    I don’t think many coalition rednecks realise coal powered energy and dispatchable power are b not conducive for each other.

  4. October 19th, 2017 at 17:38 | #4

    The IEEFA report on Abbot Point is here: http://ieefa.org/ieefa-australia-escalating-financial-risk-adanis-abbot-point-coal-terminal/
    As far as I can make out, the port is still a cash cow, and very profitable by itself – but Adani have bled it white to prop up other lossmaking parts of the empire.

    May be worth noting that while coking coal is a safe business for the moment, as alternative sources are hard to come by and the structural decline of pig iron making is slow, that does not hold in the long run. Direct reduction of iron ore with natural gas as a known technology , and Austrian steelmaker Voestalpine have opened a large DRI plant in Corpus Christi, Texas. The same company is leading an EU-funded project to replace natural gas with catalysed hydrogen, at pilot not lab scale. The chemistry is straightforward, Ur’s basically a matter of cost. At the moment a shift to this technology would not work without a carbon price, but that is no longer inconceivable. And as renewables expand, there are prospects of large potential supplies of near-free electricity that would otherwise be curtailed.

  5. John Quiggin
    October 20th, 2017 at 06:06 | #5

    @James Wimberley

    I think it’s a cash cow as long as the take-or-pay contracts last. After that not so much.

  6. Ken Fabian
    October 20th, 2017 at 08:46 | #6

    If Turnbull thinks he can deliver policy certainty he’s dreaming. Although I suspect that isn’t the real intent here, rather it’s that the LNP hopes that blame for failure to deliver it can be shifted onto others for not coming on board with this NEG policy.

    It believe that no energy policy certainty can emerge without a policy that enables a ramping transition to low to below zero emissions; energy cannot be detached from climate and emissions because the climate problem is never ever going to go away, not in the lifetimes of Australians now living. The increasing frequency and intensity of real world impact of climate change will bring the intersection of energy, emissions and climate back into the spotlight again and again and again.

    Tricky wordplay is indeed the foundation of LNP energy and climate policy – coal plants are renamed “low emissions” as well as “dispatchable”, gas plants that let us down when most needed are “reliable”, cutting support for renewable energy as it approaches the last hurdles to becoming affordable and reliable is named “energy guarantee”. And reaching emissions targets are not a road to climate stability, they are kowtowing to economically harmful “green” led international agreements.

    But the debate has changed; except for the hard core Right Australians no longer fear the economic impacts of renewable energy and except for the hard core right, voters accept that the climate problem is real. Turnbull’s use of economic alarmist fears of renewables and Abbott’s reversion to climate science denial no longer have the resonance they did even at the time of the last federal elections. Gestures to appease the hard Right will lose them moderates to Labor, Gestures to appease the moderates will lose them the hard Right to ON and Bernardi’s AC.

    Despite energy policy being a losing game, where delay has stopped being their friend and misdirection and blame shifting are losing efficacy, Turnbull has no other options but to misdirect and hope that ongoing policy certainty can be blamed on others for not getting on board with this NEG policy.

  7. Smith
    October 20th, 2017 at 12:30 | #7

    George Christensen is negative about the NEG. He has realised that it puts a cap on emissions.

    This is where Malcolm Turnbull is too clever by half. He thinks he can fool enough of the people enough of the time. And not just that, he thinks he can fool different people in different ways. But he only ends up fooling himself.

  8. rog
    October 20th, 2017 at 13:21 | #8

    Judith Brett wrote a good article, published in the august Monthly, outlining Turnbulls obstacles (as represented by T Abbott) and advised that in the face of consistently poor polls now was the time for Turnbull to grasp the nettle and make some policy decisions that could break the cycle. Two issues were SSM and emissions/energy. The time has passed and it seems that Turnbull has missed out on an opportunity to put his own stamp on the country.

  9. rog
  10. Smith
    October 20th, 2017 at 14:34 | #10

    @rog

    “Grasp the nettle … put his own stamp on”. While he’s at it, he should also grab the bull by the horns.

  11. October 20th, 2017 at 19:24 | #11

    @Smith
    “I smell a rat! I see it floating in the air! Come, let us nip it in the bud.” – Apocryphal intervention in the Westminster House of Commons.

  12. gmhendo
    October 22nd, 2017 at 09:28 | #12

    @James Wimberley
    James it seems that the Adani holding of the 99 year lease on Abbot point is ultimately in the Caymans. So it won’t show too much of a taxable profit in Oz. Adani has a significant re-finance of Abbot Point coming up and that might be a problem for them, more so if the lenders come to see that Carmichael is very dubious.
    I understand the 60 million tons per year projected output has been revised down to 25 million tons. That will reflect in the proposed expansion of the port. The quadrupling of Abbot Point capacity could be deferred. I was told also the the port was only running at half capacity right now, leaving export space without too much capex.

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