Brown promises allure of gold in new coal economy


Australian Broadcasting Corporation

Broadcast: 15/05/2012

Reporter: Greg Hoy

Brown coal in Victoria's La Trobe Valley could soon be a major resources export according to Federal Resources and Energy Minister Martin Ferguson.


CHRIS UHLMANN, PRESENTER: The Australian economy now rides on the back of a mining truck, with mineral exports fuelling the top end of the two speed economy. Now, a controversial new export industry is being proposed. The plan is to sell millions of tonnes of Victorian brown coal to overseas markets like India and Japan. Greg Hoy reports.

GREG HOY, REPORTER: After decades feeding the furnaces of four giant power stations producing Australia's cheapest, if most carbon intensive, electricity, to deliver 90 per cent of Victoria's needs, many increasingly believe, despite ongoing protests, mining of the brown coal fields of Victoria's La Trobe Valley and beyond has barely scratched the surface.

TED BAILLIEU, VICTORIAN PREMIER: It's a resource that if we can find a way to use with reduced emissions, then that's a benefit to Victoria and a benefit to the Victorian and Australian economy.

GREG HOY: The dream that clean technologies can drive development to the brown coal export industry on the scale of the Pilbara is shared by Resources Minister Martin Ferguson and many investors along Melbourne's fine old financial hub of Collins Street.

LES ERDI, MELBOURNE BUSINESSMAN: The potential is unbelievable. We will have in Victoria a new Western Australia.

GREG HOY: But government support for such a notion waves a red rag at the Greens.

CHRISTINE MILNE, GREENS LEADER: People want to know what is the way to a sustainable future and more jobs for them, not a way of a politician coming in saying, "Don't worry about the realities of climate change, we will just give you more mining."

GREG HOY: Victoria's largest power station, Loy Yang, is in turn fed from the largest open cut mine in Australia. But it's just a slice of a $430 billion tonne reserve of dirt cheap brown coal in Victoria - storing more energy, it's said, than the north west shelf. Its high moisture content means brown coal produces 30 per cent more greenhouse gas than black coal. Regardless, government has called for tenders to enable new huge resource allocations.

TED BAILLIEU: We have an enormous resource in Victoria, and we ought to be looking at ways to use that resource.

GREG HOY: There's clouds of fine coal dust down here. Loy Yang mine's four giant bucket wheel excavators work 24 hours a day, between them extracting some 31 million tonnes of coal per annum. But this massive mountain of coal will be simply dwarfed by what's being proposed by governments, Federal and state, keen to cash in on the world's grower hunger for fuel.

CHRISTINE MILNE: To go down to a coal region at the end of the fossil fuel age knowing that countries like India have already applied a coal tax on imports; knowing that Tata, one of their largest organisations, is saying, "Why would you invest in coal-fired power?" - it's actually not fair.

TREVOR BOURNE, CEO, EXERGEN: It's not past its prime, I think what's more important is there's more technologies now that can unlock the value that's in the La Trobe Valley, and it literally is hundreds and hundreds of years and billions and billions of dollars.

GREG HOY: So what are these magic new technologies? Trevor Bourne is CEO of Exergen - now bidding for one billion tonnes of brown coal for both export and local supply, with shareholders including India's Tata Power and Japan's Itoshu, Exergen is trialling technology for the La Trobe at the Beaconsfield goal mine in Tasmania, where brown coal slurry is dumped down a heated one kilometre shaft to extract 80 per cent of moisture content, and so slash greenhouse emissions.

VOX POP: If Exergen gets it right, then we guarantee our future economically, whilst also creating new export opportunities in terms of the potential export of brown coal, whilst at the same time securing reliable power for Victoria.

CHRISTINE MILNE: We've heard a lot about clean coal for a very long time, and the fact of the matter is it's nowhere near being technically and financially feasible.

TREVOR BOURNE: We would hope that we sometimes in the three to five year range we would be... you know, start the construction of a commercial facility.

GREG HOY: That's a similar time frame to Yallourn Power Station's plans for a pilot plant that developer Ignite Energy claims will reduce brown coal emissions by 50 per cent, for a fuel that is far cheaper than black coal. But no one is more supremely confident of his clean power technology that 90-year-old Melbourne businessman Les Erdi.

LES ERDI: The cheapest electricity we have, but the dirtiest, right? And this is why I can clean it.

GREG HOY: A prominent member of Melbourne's Jewish community, Les Erdi is a hotel magnate who has invested many millions in technology developed by Israeli scientists for Australia's Green Earth Energy Limited, which aims to separate the oxygen from brown coal CO2 emissions, then use the remaining carbon as recycled fuel. So is it ever really going to happen?

ROB ANNELLS, CHAIRMAN, LAKES OIL: It could happen today. The technology exists to have far more efficient power stations right now, today.

LES ERDI: The biggest revolution, whatever came to this country in energy is no dot, no thought object it. If you want to put a $10 million bet, I make a $10 million bet on it.

CHRISTINE MILNE: Certainly, we've got to be open to whatever new technology can deliver, but what we're finding is that all of these so-called solutions still end up as high emissions alternatives compared with renewable energy technology.

ROB ANNELLS: Yesterday and the day before there wasn't too wind... wasn't very much wind around. I mean, we'd have to switch the lights off. Where is the power going to come from? There is no alternative.

GREG HOY: Meantime, the nation's largest energy retailer, AGL, is now seeking regulatory approval to take over the brown coal behemoth Loy Yang. AGL wouldn't be interviewed, but even if the proposed carbon tax was more than double market analysts say, Loy Yang would remain the cheapest electricity generator. So rumours of a death knell for brown coal, it appears, might have been premature. And if certain dreams come, true more will be dug up - indeed some say the sky is the limit.