Why is Greg Hunt spruiking clean coal - Cory Bernardi, of course

As UN chief Ban Ki Moon urged divestment from coal, the Environment Minister seemed desperate to talk-up 'clean coal' technologies. Yet he would know they are too expensive to win under his Direct Action auction so what's going on here?

It’s all a bit weird.

Environment Minister Greg Hunt starts talking up the potential for clean coal during the week that the IPCC issues its final concluding part of the fifth assessment of climate science report. A report which leads the head of the United Nations, Ban Ki Moon, to say:

"I have been urging companies like pension funds or insurance companies to reduce their investments in a fossil-fuel based economy [and shift] to renewable sources of energy."

This week Hunt, in several media appearances promoting his newly passed Emissions Reduction Fund, chose to highlight some obscure, long-running and still non-commercial work by CSIRO researchers on powering diesel-fuel oil reciprocating engines with a coal-water slurry. The proponents of the Direct Injection Carbon Engine – or DICE, as it is called – hope that it could produce power with 30-50 per cent less emissions than a conventional coal power station.

The thing is that the research is still some way off from being a commercial proposition; its proponents say five years. Also given it requires investment in brand new, expensive kit that would need to last a decade or two, you’d have to question whether it’s rather modest improvement in emissions intensity (it would only just match the emissions of a gas-fired power station) would in fact hinder efforts to contain global warming to safe levels rather than improve them.

So the prospects of the DICE engine, or any clean coal technology for that matter, playing a notable part in an Emissions Reduction Fund’s achievement of its 2020 emission reduction target are slim to none. Indeed, the chances of it getting any ERF money beyond 2020 are grim too, if the scheme genuinely allocates funds based only on lowest cost delivered abatement.

Greg Hunt would know that.

He would be well briefed that the recent apparent breakthrough in capture and storage of coal emissions – the Canadian Boundary Dam Project – was hideously expensive. They spent $US1.24 billion to retrofit an existing power station to produce 110 megawatts of power to the grid. Assuming 80 per cent utilisation that’s more than $US14 million per effective megawatt, and you’ve got fuel costs on top of that.

By comparison a wind farm assuming 40 per cent utilisation (what newly constructed wind farms in Australia can achieve) comes in at $US5 million or so per effective megawatt with no fuel cost. Also, it can be built in one year instead of four or five, with that saving in construction time adding up to lot of avoided bank loan interest which weighs on the clean coal project.

But he’s not talking up how the ERF will help coal to appease those who are concerned about climate change; he’s doing it to appease and reassure his own party room colleagues.

Today we learnt from The Australian newspaper that Liberal Senator Cory Bernardi almost voted against the Direct Action legislation when it was put to Parliament last week. That single vote would have killed the legislation. Apparently Bernardi said that it took “every ounce of goodwill for me to vote for this” and Hunt had to offer him “certain reassurances”, which at present are not yet known.

Meanwhile Hunt’s boss, Prime Minister Tony Abbott, said on Tuesday this week:

“You can’t have a modern economy without energy and for now and for the foreseeable future, the foundation of Australia’s energy needs will be coal. The foundation of the world’s energy needs will be coal.”

Imagine being in Greg Hunt’s shoes.

Somehow you’ve got to get your colleagues to back policies that make some attempt, albeit modest, to lower carbon emissions. Do you think the best way to go about it is to say these policies will act to make a serious dent against coal, oil and gas; even if ultimately that’s what they need to do?

A large proportion of his colleagues think these commodities replaced the sheep’s back as the foundation of Australia’s prosperity. Talking up how effective your policy will be in countering the use of such fuels is a recipe for getting turfed onto the backbench.

So Minister Hunt’s grand charade continues.

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