by Guy Pearse

The greatest coal rush the world has seen is being conducted as if climate change is not happening, and coal is king.

It wasn’t always this way. Coalmining has a long history in Australia, but coal wasn’t an important export until the last few decades. Before 1960, Queensland had no coal-export industry. Most of the coal mined was used to fuel state-owned power stations, or BHP’s Newcastle and Illawarra steel mills. As recently as 1981, Australia was but a minor medallist in the global coal trade – exporting less than half as much coal as the US. But just as climate change inconveniently peeked over the horizon, Australia started to bet big on coal. As recently released cabinet documents reinforce, the Fraser government, with strong support from the eastern states, decided to use cheap coal to attract energy intensive investment. State governments provided export infrastructure, low royalties and long-term sweetheart deals between state-owned power generators and industries such as aluminium smelting. The demise of BHP’s steel production in Newcastle, the rise of Asian demand and a UN climate convention that let fossil-fuel exporters off the hook by counting emissions where fuels are burned were just some of the many green lights given to coal exporters.

The coal push became a rush, and Australia quickly became headquarters for a global trade that bakes as it booms: our thermal coal pushes cheap and dirty electricity on many countries, and our coking coal and iron ore underpin an Asian boom in the use of blast furnaces, the most emission-intensive steel-making option. (In developed countries, most steel is produced in electric arc furnaces fed with either scrap metal or direct reduced iron, which can be made without coal.)

Yet, the coal industry remains a benign abstraction for most, not much more than a hum of economic and political waffle on the periphery of everyday life: “biggest export, thousands of jobs, economic backbone”, “‘clean coal’ on the way”. Many link coal to global warming, but conclude that coal exports are a necessary evil. Few appreciate the incomprehensible magnitude and pace of the current rush, or ponder its climate-changing consequences. Right now, around 120 mines across New South Wales and Queensland export more than 280 million tonnes of black coal annually (Victoria’s vast brown coal reserves have not been economically viable as an export proposition).

Coal used to be labour intensive: in 1908 it employed more than three-and-a-half times as many people (as a share of Australia’s population) as it does today. The process is now largely automated. Coal is extracted with the help of gargantuan dragline excavators, hauled by three-storey-high trucks to piles from which conveyor belts tip it into freight trains, which can be 100 carriages long and take three locomotives to shift. It then clatters and grinds its way to one of nine coal terminals dotted along the east coast of Australia, where ships queue to ferry loads of up to 200,000 tonnes to ports around the world. Along with all the diesel and electricity used to extract and transport coal, mines release large quantities of methane, a greenhouse gas 23 times more potent than CO2. But these emissions pale in comparison with those released when the coal is burned offshore. A single train might carry a load that will generate the annual emissions equivalent of 6000 cars, a ship the equivalent of more than 90,000 cars. With every tonne of coal generating 2.7 tonnes of CO2, our exports generate more than 750 million tonnes of CO2 annually – much more than the emissions occuring in Australia. The plan to double exports before 2020 puts us on track to overtake Saudi Arabia as the world’s largest carbon exporter in the next 15 years.

There’s really no physical limit on the rush. Australia’s recoverable coal reserves are estimated at 40 billion tonnes; there’s enough to increase exports for the rest of this century. Around 40 new export mines or expansions of existing ones are under way, thousands of kilometres of new railway track are being laid, and new coal terminals are being built (and existing ones expanded) to handle a doubling of exports. The scale of the expansion makes it easy to forget that the industry is the result of more than a century of deliberate and generous government subsidy. Most coalmines built in the first half of the twentieth century were government-owned. When coalmining, power generation and railways were virtual state-run monopolies, it made sense to co-locate rail and power infrastructure close to the mines. As coal has become an export commodity and domestic power has been opened up to competition, the coal industry was gifted an unassailable competitive advantage courtesy of the taxpayer.

Nothing captures the government’s role in developing Australia’s coal industry quite like the eulogies to Sir Joh Bjelke-Petersen. As Bob Katter Jr put it, were you to remove the close relationship between Sir Joh and Sir Leslie Thiess from history, you would “erase the coal industry from the face of Queensland”. Having paved the way for Thiess (along with Mitsui and Peabody) to establish Queensland’s first big export mines, Bjelke-Petersen championed the expansion of the coal industry, assisting with substantial infrastructure and a five-cents-a-ton royalty rate that companies such as Utah and Mitsubishi found impossible to refuse. As a young MP, Katter had serious doubts about public investments that he saw as “irresponsible risk-taking”; now he says Joh was nation-building. However, there’s no mention of the jury finding that Sir Les bribed Sir Joh so he would win coal projects, and no mention of the 453 million tonnes of CO2 that Queensland’s coal exports now add to the atmosphere annually. Taking all this into consideration, Katter’s youthful caution looks inadvertently prescient: it was irresponsible risk-taking, and it will come back to bite us.

Only not just yet, as successive generations of politicians and bureaucrats have decided that doubling the stakes to stay at the table is the way to avoid paying coal liabilities. Just keep playing, and let the next generation cash in what’s left of the chips. Having spent billions subsidising coal exports into existence, governments won’t walk away. That would mean having to say “no” to friends and ex-colleagues: to Australia’s largest coal union (the CFMEU), which has regularly been federal Labor’s biggest external donor; to coal baron Clive Palmer whose Mineralogy Pty Ltd is the biggest external donor to Queensland’s Liberal National Party; and to former premiers, treasurers and ministers now paid by the coal industry. It would also mean saying “no” to senior politicians on both sides of politics who have recently made what locals call “fortunate purchases” of rural properties on which coalmining is anticipated. The media tips a 200% to 500% return on these properties, but only if the coal rush rolls on.

Governments are behaving as if the more hopeless their coal addiction, the less likely it is they will be asked to quit. Not a single Australian coal-fired power station has been closed to reduce emissions. Antique 1960s power stations are being dusted off, and a dozen new ones are in the planning stage. Much of the coal rush is only viable thanks to government subsidies to build, for example, ‘missing link’ railways. Queensland is currently spending more on coal-related infrastructure ($15.6 billion) than it has made from coal royalties over the past decade ($11.4 billion). For that $15.6 billion, the government, in partnership with the private sector, could replace more than one-third of Queensland’s existing coal-fired power stations with renewable energy generators. Instead, the “smart state” wants to spend it on doubling the amount of ‘world-class’ coal it exports. It also wants to salve Queensland’s budget by privatising coal-related port and rail assets, thereby hooking more private investors to the coal addiction.

In NSW the planning laws have been rewritten so that protections that would normally apply can be swept aside by ministerial fiat once a project is declared to be of state significance – which most coalmines are. Although 16 NSW rivers have been permanently damaged by careless mining – mainly as a result of subsidence caused by long-wall coalmines – the government is happy to consider coalmines underneath the water catchments of Sydney and the central coast. Calls for a kilometre-wide buffer around rivers and aquifers have been dismissed. Meanwhile, the Keneally government is getting back to the business of buying its own coalmines – even though the estimated value of the coal-fired power assets it is looking to privatise has reportedly fallen from $35 billion to $6 billion in just over a decade.

In Canberra, Kevin Rudd calls the coal industry “the backbone of regional Australia”. His resources minister, Martin Ferguson, regards new coal-fired power stations as inevitable and warns against holding back coal export growth. With the explicit aim of doubling exports, federal environmental approval and billions of dollars in subsidies are being given to expand port, rail and road infrastructure. And billions more are propping up pilot projects to help maintain the illusion that ‘carbon capture and storage’ might clean up Australia’s coal industry. On the other side of politics, where climate-change sceptics choose the leader, one of Tony Abbott’s first items of business was visiting a Hunter Valley coalmine to declare that this “great industry” should flourish – not merely survive.

When Shenhua funds a new rural health clinic in Gunnedah, when Rio Tinto’s Coal & Allied sponsors Newcastle’s NRL team, when BHP Billiton and Xstrata fund drought-relief concerts by the Sydney Symphony, coal stealthily locks in permanency. With each state-owned coal asset that is privatised, an implicit guarantee is given that the coal industry’s expansion will be unfettered. But it is not the governments addicted to coal that are the victims; most victims of the climate chaos being fuelled by Australian coal are yet to be born in places like Bangladesh and sub-Saharan Africa. The ordeal of the more immediate victims of the rush – Glenn Beutel and the thousands like him – is unknown to most Australians.