Rio Tinto's clean coal idealism

The head of Rio Tinto's energy division argues that that 'coal is here to stay' and the focus needs to be on cleaning up coal. A 2003 speech from a Rio Tinto executive reveals how realistic that is.

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 predecessor 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”?

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