MAC: Mines and Communities

Rio Tinto's clean coal idealism

Published by MAC on 2014-03-22
Source: Business Spectator,

Rio Tinto's clean coal idealism

Tristan Edis

Business Spectator

21 March 2014

According to newspaper reports, Rio Tinto's energy division chief, Harry Kenyon-Slaney, believes that the current climate change policy debate is idealistic and too focused on renewable energy.

Instead, society should refocus upon trying to improve the efficiency of coal-fired power stations and developing carbon capture and storage technology. Notes of a speech he will give today state:

"Knowing that coal is here to stay, it is fruitless to keep indulging in idealistic discussions about climate change."

At the same time Kenyon-Slaney has applauded the Abbott government's decision to review the Renewable Energy Target, according to The Australian.

If you take the time to look at the numbers in terms of coal use over the last decade and what's projected for the next decade by the International Energy Agency, then you'd have to agree that Kenyon-Slaney has a reasonable point.

There are a now countless gigawatts of freshly minted coal-fired power stations with decades of life in them littered around China. And if the IEA is right there could be a lot more in India (although India has some real troubles converting government plans into reality).

The problem is that if the IEA's projection of our future energy supply under current government policy settings comes true, than we're in for a world of climate change pain. Improving the efficiency of coal-fired power stations is like moving around the deck chairs on the Titanic - pursuing such a strategy would leave us with something like a one-in-10 to one-in-five chance of temperature rises above 6 degrees, which would be catastrophic.

Now carbon capture and storage technology would be fantastic, if ...

1) You could practically retrofit it to existing coal-fired power stations, not just use it on new power stations; and

2) It could be done at large scale and a reasonable cost; and

3) It could be ready to do this starting from no later than 2025.

I haven't had the chance to see Kenyon-Slaney's speech in full yet based on the media reports it seems eerily familiar to a speech by one of his predecessors back in 2003, Grant Thorne, who headed up Rio Tinto's Pacific Coal division.

Grant Thorne painted a glowing picture of how carbon capture and storage would play out:

"Over time, the widespread deployment of carbon capture and disposal technologies will allow the world to evolve to a hydrogen-based economy. In this future, we believe coal will have an important role as a low-cost, large-scale source of emissions-free hydrogen. This is an exciting vision for the coal industry."

He then pointed to a range of initiatives that would make this happen. This included a US government initiative known as FUTUREGEN which would build a 275MW coal power plant that would produce hydrogen. In addition he pointed to how the Australian Coal Association was developing an industry-funded initiative to progress zero-emission coal - COAL21 (they like capital letters).

According to Thorne, governments shouldn't put in place any policies to constrain emissions right now because it wouldn't do anything meaningful to reduce emissions because the key solution, in CCS, wasn't ready yet. But it would be in the future.

So what happened with all those capital letter initiatives he spruiked over a decade ago?

FUTUREGEN is now jokingly referred to as 'NEVERgen' - the plant was never built.

Now, as for COAL21 this was spruiked to provide $1 billion over a decade to research carbon capture and storage funded by voluntary levies on Australian coal miners. But in 2013 they changed the objectives of the organisation set up to administer the fund, ACA Low Emissions Technology Ltd (ACALET).

Now it's focused not just on reducing carbon emissions but also promoting the use of coal in Australia and overseas (kind of contradictory, maybe?). In addition, the requirement to pay the levy was suspended in 2012-13. What's more the levy, which is based on levels of coal production, isn't actually required to be paid to ACALET until it spends the money on actual projects. And guess what ... ACALET hasn't been spending the money particularly quickly with a $133 million underspend, according to a February report in Carbon and Environment Daily.

Even Federal Industry Minister Ian Macfarlane seems to be willing to acknowledge that carbon capture and storage is a pipedream. One senior Liberal referred to it as 'vaporware' (new computer software promised by companies to be delivered in the future that never eventuates but scares off competing software development).

Could it be that perhaps that talk of cleaning up coal as the central response to climate change may be a touch, to borrow Kenyon-Slaney's choice of word, "idealistic"?

Rio Tinto demands carbon capture progress, but doesn't want to pay for it

Cecilia Jamasmie

21 March 2014

Rio Tinto's energy division chief, Harry Kenyon-Slaney, said Friday the current climate change policy debate is idealistic and too focused on renewable energy and has urged governments to investment more in clean technologies, such as carbon capture and storage (CCS).

Speaking at the Energy Policy Institute of Australia meeting, the executive said it was clear the mining industry "can't just wish away fossil fuels," adding that any solution to climate change must recognize the ongoing significant role of fossil fuels in the global energy mix.

The executive added that coal, gas, uranium and renewables would all be needed to meet global energy demand growth of 69% expected in the next 20 years.

But the miner, along with other Aussie coal producers, has "paused" payments to the industry's overhyped Coal21 group, which was supposed to become a $1bn industry fund to finance clean coal technology "in response to difficult trading conditions in the industry."

The organization's objectives were modified last year and now the same group is focused not just on reducing carbon emissions, but also promoting the use of coal in Australia and overseas.

So his answer to Coal21's seemingly change of harts, is simple: "Knowing that coal is here to stay, it is fruitless to keep indulging in idealistic discussions about climate change," he told the audience.

Kenyon-Slaney added the industry has an obligation to take action on climate change, while avoiding loss of power for hundreds of people in Asia, providing power for 1.3 billion people still living without it and trying to prevent four million deaths each year because of toxic methods of processing.

His comments are already making waves:

"As if to highlight Rio Tinto's own lack of faith in the CCS, Kenyon-Slaney said the company had invested $100 million in the technology. This from a company that earns billions from coal mining each year -earnings that most analysts say is at risk if the world get serious about climate change," wrote Giles Parkinson for RenewEconomy.

"To put that investment into context," Parkinson adds, "a Perth-based start-up, Carnegie Wave Energy, has invested a similar amount in its new technology. It has yet to earn a dollar, but at least it has faith it will work."

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