Adani: the dog that caught the car

Adani has finally received environmental approval from the Queensland government for its proposed Carmichael mine in the Galilee Basin. At this point, in a standard news story about a multi-billion project, we’d be reading about the domestic and global banks that were competing to be the lead financiers for the project, and those who would have to content with the crumbs. Along with that, there would stories about the partners and subcontractors who would get the lucrative work of construction.

Instead, we have a long list of banks and other funding sources that have announced that they won’t finance the project, or have pulled out of announced and existing finance arrangements. The list includes the Commonwealth (formerly a big lender to Adani), NAB, the Queensland Treasury, the State Bank of India, and global banks including Standard Chartered (another former big lender), Citigroup, JP Morgan Chase, Goldman Sachs, Deutsche Bank, Royal Bank of Scotland, HSBC, Barclays, BNP Paribas, Credit Agrilcole and Societe Generale. The US and Korean Export-Import banks have been touted as possible sources, but appear to have backed away. Even the Abbott-Turnbull $5 billion slush fund for Northern Australian boondoggles, seen when it was announced as a rescuer for Adani, now appears unlikely. At the recent Northern Australia Investment Forum, the fund was the centre of attention, but Adani apparently didn’t get a mention, unless it was implicit in Frydenberg’s claim that the government wouldn’t be investing in “white elephants”.

The situation with suppliers is just as bad. Adani sacked the engineering team from Worsley Parsons and the construction group from Posco (also a supposed equity partner) last year. A $2 billion announcement of work for Downer EDI seems to have vanished into thin air. And at Abbot Point, Adani, as owner, is engaged in a nasty brawl with Glencore, the current operator.

In summary, we appear likely to find out what happens when a dog catches the car it has been chasing. Adani and its backers have been denouncing green tape and “lawfare” as the only obstacles to the bonanza they have on offer. Now, the legal and administrative obstacles are gone, so they have only to line up the money, rehire the contractors and announce the starting date. My guess is that this will never happen.

41 thoughts on “Adani: the dog that caught the car

  1. I probably should have mentioned that the financial year before Whitehaven had a $78 million loss and $65.5 million in write downs. So it would only take ten years of $7.8 million profits to exceed that one year loss.

  2. @Ikonoclast
    I’m puzzled about your theory of change. The way I see it, first growth in emissions slows, then it stops (where we are now), then it turns down, then (after more of the same) it collapses. The collapse stage, as with the share prices of US coal companies, comes right at the end. How do you see it happening? Damascene boardroom conversions? The mob charging into the front gate of the Winter Palace and sweeping up the grand staircase, as in Eisenstein’s fictional October scene? The sudden introduction of a war economy. with General Motors switching its refrigerator factories to make machine guns instead? The last one really happened, so it’s not impossible like FTL drives, but vanishingly unlikely.

  3. @James Wimberley

    A fair question. Predictions are always risky of course. I think it will take what I call a “salutary disaster” to ensure we change course significantly. In other words, I believe human CO2 emissions will continue to grow, or at least not be ameliorated nearly fast enough, until some very large natural disaster occurs. This natural disaster will have to be unambiguously attributable to climate change. It will have to affect one or more rich and/or powerful nations and kill, injure or render homeless hundred of thousands if not millions of people. Once this salutary disaster occurs everybody, elite and ordinary persons alike, will become very, very frightened. Once they are suitably frightened by the demonstration effect(s) of nature’s vast power, they will actually do something serious about the problem.

  4. @Ikonoclast
    Re comment to James, I believe you are correct and unfortunately by the time “everybody, elite and ordinary persons” act it will be too late to avoid major climate change and a disastrous impact upon all humanity. In times past it took just a couple of decades for Europe to be plunged into an ice age that lasted a thousand years when global warming led to polar ice melt and disrupted the Gulf Stream. Look up some of the work on the study of midges and their relationship to climate change.

    The feed back loops involving the polar ice melt, release of methane from the permafrost, higher absorption of the sun’s energy as the polar ice retreats is truly scary. People who think technology will come to the rescue should think again, the technologies needed will in
    themselves likely require significant energy input to realise and would stoke pollution.

    It is optimistic to believe that given the present trajectory the world will keep global warming below 4 degrees let alone the 2 degrees that is the subject of much discussion

  5. @John Turner

    Look, I agree. I think the chances for abrupt climate change and other abrupt system changes in the biosphere are now considerable. I think it is quite possible that one or more such changes will happen in this century.

    Human technology is puny compared to the forces of nature. Most people seem to have no proper appreciation of how puny our technology and its marshaled powers are compared to natural forces even on this planet. There is an enormous hubris today about human efforts and technology. I say this as a scientific humanist. This hubris is unfortunate because it leads to dangerous mistakes and oversights due to over-confidence.

    I’ve argued a certain point on this blog before but I am not sure many got the point. Humanity is fully contained within and part of nature (physical and biological forces). There is no way for humanity to transcend these forces. I mean this in the sense that is no way we can ever be un-contained by nature. We can harness nature’s forces, to a quite modest degree actually, but we can never supersede, obviate or escape them.

    Francis Bacon wrote in Aphorism IV (Novum Organum);

    “Toward the effecting of works, all that man can do is to put together or put asunder natural
    bodies. The rest is done by nature working within.”

    Nature is a given. The religious believe it is Deity created (which in my book is an attempt at explaining away not at explaining). As a scientific humanist, I take nature as “brute fact”. It is inexplicable, undeniable and just “there”. All of “nature working within” is a vast set of processes independent of us in almost all ways even though we as a sub-system are wholly dependent on it. Our society-economy a tiny sub-system of a massive “all-existent”, a system of interconnected processes ie. the largest real system conventionally called The Universe.

  6. Ikonoclast re

    Human technology is puny compared to the forces of nature. Most people seem to have no proper appreciation of how puny our technology and its marshaled powers are compared to natural forces even on this planet.

    You could argue that, if science, technology and sheer human ingenuity got us into the pickle, then, all being equal, the very same aught to be able to get us out of the pickle. In the recent regime change at the CSIRO, the new boss requested for the main problem to be outsourced and, in a schizophrenic way, with “his first priority is to raise morale” essentially crippling basic climate research in our leading scientific organisation which has already lost a fifth of its workers. As a Nation we have already outsourced major aspects of our life to market forces, where as now we are handing over our intelligence on the most pressing risk to a venture capitalist. So I would argue that science, tech and innovation should get us out of the pickles (within probabiity), but question wether market forces are suitably intelligent and responsible to succeed in such a monumental task?

  7. @Ootz

    A fair question. Of course, some pickles are irreversible. Indeed “pickles” themselves are irreversible. You know the kid of sayings. You can’t unpickle a pickle. You can’t unscramble an egg. You can’t unbreak an egg. You can’t put toothpaste back in the tube… and so on.

    “An irreversible process increases the entropy of the universe. However, because entropy is a state function, the change in entropy of the system is the same whether the process is reversible or irreversible. The second law of thermodynamics can be used to determine whether a process is reversible or not.” – Wikipedia.

    “In the context of complex systems, events which lead to the end of certain self-organising processes, like death, extinction of a species or the collapse of a meteorological system, can be considered as irreversible…. Ecological principles, like those of sustainability and the precautionary principle can be defined with reference to the concept of reversibility.” – Wikipedia.

    Given the mass extinction event currently underway due to human activity it is clear we can’t undo or reverse the actual damage we have done. On the other hand we could arrest the process of damage and/or diverge to a new, less damaging future than say one of human extinction, major climate change and “ocean death” for example. In time, with energy from the sun, life in the earth’s biosphere also could evolve new complexity.

    Science, technology and sheer human ingenuity could help us back out of this particular pickle. But they would have to be wielded in a new and very humble spirit before the power of nature. I say this not in any pantheistic or nature-worship manner but simply in a precautionary sense of paying a lot more attention to the possibilities of unforeseen consequences and working more subtly along with nature rather than trying to dominate it or sweep it aside, the latter two being impossible of course.

  8. Obviously you are not aware of the Shakespearean use of “in a pickle” as being in a fix or major trouble. In reality we don’t know very well how our massive CO2 emissions are going to unfold considering the error margins of all the predictions. Indeed this very fact makes the outsourcing of Climate change modelling even more critical.

    Further, major steps in human evolution have always brought changes in the environment, granted not on the scale as is happening now. Indeed the climate and environment have always changed too naturally. Our species comes from a mob of only about 1500 who somehow made it through the last interglacial and survived the vagaries of the last ice age. The nature of life has for millennia found ingenious ways to suspend your 2nd law of thermodynamics and in fact responds to serious setbacks with increased diversity and more complexity, see previous cataclysmic events in earths history. And of course tomorrow will be different to today, but will it be the kind of doom you are dwelling on, who knows? Similar, your estimation of human capacity to develop a way of dealing and adapting with the unfolding changes, are at best just assumptions.

    In fact your attitude could be best described as a denier, a denier of the possibility for humanity to deal appropriately with the looming changes and associated risks, with innovation, science and technology. As I mentioned above, it would appear that the critical factor is not science and technology, rather than intelligent and responsible governance.

  9. @Ootz

    I know what the idiom of being “in a pickle” means. That was clear from my response as I joked around a bit. 🙂

    But I am not being critical of you. As I recall, you are bilingual at least and you clearly know English very well even if it is your second language. You are well ahead of a monolingual English speaker like me when it comes to language knowledge.

    1. I agree, there are error margins in Climate modeling predictions.

    2. I agree, “major steps in human evolution have always brought changes in the environment”. I also agree “climate and environment have always changed too naturally”. Life on earth has “suspended” the 2nd law of thermodynamics as you say but only in the sense that it has used solar energy (energy from outside the earth system or biosphere) to increase complexity in the biosphere. This sense is important and indeed crucial as you indicate. So again we are in agreement.

    You also said, the biosphere “in fact responds to serious setbacks with increased diversity and more complexity, see previous cataclysmic events in earths history”. I would quibble only with the “increased diversity” part only if it was being implied that the biosphere would always respond with increased diversity (though there are ways I can see where that would mostly happen). And things can go on like this until the sun “burns out” in about 5 billion years time.

    I think we would both agree that the earth’s biosphere could eventually recover from a serious contemporary setback be it plus 6 degrees C of global warming from human generated CO2 emissions or a super-volcano eruption from the Yellowstone caldera, USA, or the Lake Taupo super-volcano caldera N.Z., for examples. However, the key point here is the time-span for a recovery, especially of the “new total evolved complexity of life” if I can call it that. The time-span of recovery is going to be enormous compared to human civilisational time spans and even enormous compared to the likely species lifespan of homo sapiens before its extinction.

    As they might have said on Star Trek. “Life will recover Jim but not in the time span of our civilization.”

    3. We even agree that “the critical factor is not science and technology, rather than intelligent and responsible governance”. Probably what we disagree on is the likelihood of that intelligent and responsible governance coming out of our current system. I pretty much see our current system as corporate capitalism and I see representative democracy within it as being critically weakened. I can’t see us saving ourselves without changing to a system of eco-socialism. That’s not to say it would be certain even then but I think our chances would be considerably improved.

  10. Thanks for that rog, in a way it is a good illustration for my argument to avoid blanket claims like “Human technology is puny compared to the forces of nature.” Also, it reinforces the absolute irresponsibility to reduce the scientific endeavour to model and forecast with better resolution of what is in stall for us climate wise.

    And again how irresponsible for the only national newspaper to yet again flog John Christy’s critique on climate models solely based on ground and atmospheric temp. So Ikonoclast, I suggest rather than railing against old religion you should focus on the new high priests in msm. And what about this dingbat venture capitalist CSIRO boss to say that row over climate science cuts ‘more like religion than science’. Not to mention the new Deputy Prime Minister of $100 lamb roast fame? Hence, I still argue for us not to fall into the trap of making wholesale statements and to mitigate or simply cope effectively with the actually eventuating changes in climate, we need intelligent and responsible governance.

  11. I haven’t propitiated you by indicating lots of areas of sincere agreement.

    “Human technology is puny compared to the forces of nature.” This is a blanket statement and for that my apologies. It needed a “relative” clause. “Human technology is puny compared to the larger natural forces of the earth, solar system and cosmos.” On the other hand, if technology is strong enough to disrupt the climate it might be strong enough to ameliorate that disruption. The “might” is necessary to stipulate because some processes are difficult to reverse and others impossible to reverse. This has to do with entropy of course. It could be summed up by saying it’s a lot easier to create a mess than to clean it up. It’s a lot easier to destroy than create.

    And as we know, there are likely AGW problems already “baked into” the climate system. There is the possibility that we have passed a point where system progression to climate tipping points might already have been initiated. None of these statements should be taken as me saying we should do nothing.

    I am not sure that I railed against “old religion”. I indicated its point of view and mine in a very limited way on one topic, that of first cause. I agreed we need “intelligent and responsible governance”. I do not think we will get it under this system which is hard-wired to expand production without taking negative externalities into account. The “new high priests in msm” are shills, pens for hire. They write what this system demands of them. To remove their lies and obfuscations from the discourse at this stage would require the removal of oligarchic capitalist power in the msm at least. This could all change. A salutary climate disaster (say a rapid collapse of ice shelves causing a sea level rise of 500 cm in a decade or the failure of an ocean conveyor current) could frighten even the oligarchs.

  12. Correction above: In my example I meant 50 cm in a decade. That is feasible though hopefully not likely. A rise of 50 cm in a decade would do massive damage combined with storm effects including more powerful storms.

  13. No worries Ikonoclast, there are many issues I agree with you too and I like your thinking aloud approach on this thread, in an attempt to make sense of the complexity of the problem.So, please understand that I am supportive of the gist of your narrative outlined above, I am just not ready yet to write the obituary to humanity yet. One should never give up hope and let us not forget that yesterday we got in touch with one of the universe most profound events still gravitating through space.

    “To remove their lies and obfuscations from the discourse at this stage would require the removal of oligarchic capitalist power in the msm at least. This could all change. A salutary climate disaster”

    I would have thought, the Arab Spring, Syria and the recent burning of the ancient World Heritage forests in Tasmania were “salutary”. However, with all the other major destabilising factors such as population growth, inequality and global economic roller coaster, it may not necessary be climate which will be forcing change. Global military forces call climate change a “threat multiplier” and most are taking it seriously except here!

    Leadership in both the US and UK has driven their military forces to take action to integrate the potential disruptions from climate change into core defence planning processes. In both countries it was the lawmakers who spearheaded the charge.

    For example, we know that US Pacific Command sees rising sea-levels to be a significant threat to people in geographically vulnerable locations.

    The integration of climate-related risks management into planning processes has led to a range of specific measures designed to facilitate early responses to disaster situations and provide US leadership throughout the region as well as capturing lessons learned into a comprehensive data base.

    In New Zealand, a progressive NZDF took on these issues as core planning drivers as early as 2011.

    The Australian Defence Force should try to catch up to our friends and allies. This will take political leadership as well as strong commitment from our senior officers. There’s much at stake for our reputation in our region and in the Australian community.

    Admiral Chris Barrie, the former chief of the Australian Defence Force

    Given the treatment CSIRO just got, it will be interesting to see how much of Chris Barrie’s advice above has been taken aboard in the delayed new Defence White Paper due in April.

  14. /Sorry, moderation issues again (2 links) so will split the offending comment

    No worries Ikonoclast, there are many issues I agree with you too and I like your thinking aloud approach on this thread, in an attempt to make sense of the complexity of the problem.So, please understand that I am supportive of the gist of your narrative outlined above, I am just not ready yet to write the obituary to humanity yet. One should never give up hope and let us not forget that yesterday we got in touch with one of the universe most profound events still gravitating through space.
    “To remove their lies and obfuscations from the discourse at this stage would require the removal of oligarchic capitalist power in the msm at least. This could all change. A salutary climate disaster”
    I would have thought, the Arab Spring, Syria and the recent burning of the ancient World Heritage forests in Tasmania were “salutary”. However, with all the other major destabilising factors such as population growth, inequality and global economic roller coaster, it may not necessary be climate which will be forcing change. Global military forces call climate change a “threat multiplier” and most are taking it seriously except here!

    Leadership in both the US and UK has driven their military forces to take action to integrate the potential disruptions from climate change into core defence planning processes. In both countries it was the lawmakers who spearheaded the charge.

    For example, we know that US Pacific Command sees rising sea-levels to be a significant threat to people in geographically vulnerable locations.

    The integration of climate-related risks management into planning processes has led to a range of specific measures designed to facilitate early responses to disaster situations and provide US leadership throughout the region as well as capturing lessons learned into a comprehensive data base.

    In New Zealand, a progressive NZDF took on these issues as core planning drivers as early as 2011.

    The Australian Defence Force should try to catch up to our friends and allies. This will take political leadership as well as strong commitment from our senior officers. There’s much at stake for our reputation in our region and in the Australian community.

    Admiral Chris Barrie, the former chief of the Australian Defence Force

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