Book review: Big Coal - Australia's Dirtiest Habit

Vanguard November 2013 p. 10
Alex M.

 

We should all read this book by Guy Pearse, David McKnight and Bob Burton. Real insights into the political skulduggery and profit maximising behaviours of those associated with what the authors call ‘Big Coal’ can be found within its 257 pages.

The authors show, amongst other things, that big mining corporations as well as individual ‘coal barons’ have an inordinate level of influence on federal and state governments. That is perhaps no real surprise for the more critical amongst us, but the writers back up their arguments with substantial research.

‘Big Coal’ and its costs

The costs to Australia and the global environment of the coal mining and coal seam gas (CSG) extraction bonanza are revealed in the book.

Coal burning and its extraction make up the largest source of greenhouse gases in the world. What is more the consumption of coal in industrialising countries such as China and India, and even the advanced capitalist countries, is increasing.

On the basis of the increased global demand and surging exports of Australian coal the writers state that ‘Australia will help produce more CO2 emissions than Saudi Arabia currently does with its current massive exports of oil.’(Pearse et al 2013, p.6)

The emission of greenhouse gases worldwide is exceeding the worst-case scenarios previously postulated. The catastrophic prospect of 4 - 6° C warming by the end of the century is an alarming possibility. The mining and export of Australian coal is ‘making the dirtiest energy easily available and encourage[s] the developing world to industrialise in the worst possible way.’ (Pearse et al 2013, p.6)

Aside from the environmental costs, there are other costs to Australia that spring from ‘Big Coal’. In Chapter One the writers examine what they call ‘the real price of coal’. In setting up their analysis of the real price of coal our three writers provide some historical context regarding the importance of coal in Australian development. Coal has been pivotal in this country’s industrial development, particularly in electricity generation after the Second World War. Coal burning power stations however, produce more than electricity. They also produce air pollution:

Perhaps the most alarming effect of pollution composed of material produced by burning coal is on children. Burning coal produces pollutants like nitrous oxide and particles as small as 2.5 microns wide (a human hair is 18 microns) , and both of these adversely affect lung development … Air pollution triggers attacks of asthma, and children, … are highly susceptible to pollutants such as those emitted by coal fired plants. For adults, exposure to nitrous oxide and tiny particulate matter is correlated with the development of lung cancer. (Pearse et al 2013, p.27)

In the Hunter Valley in NSW, a region which has had long experience with coal mining and coal fired power stations (and most recently with CSG drilling), the impact on people’s health has been marked.

A 2012 Sydney University report Health and Social Harms of Mining in Local Communities: Spotlight on the Hunter region found increased levels of ‘cancer, heart, lung and kidney disease and birth defects.’ A previous study in 2008 found ‘that 113 tonnes of toxic metals (such as antinomy, arsenic, cadmium, chromium, lead and mercury) were emitted into the air of the Upper Hunter, along with over 13,200 tonnes of sulphur dioxide and 62,000 tonnes of oxides of nitrogen.’(Pearse et al 2013, p.28)

The environmental and health costs of the current coal boom are just part of the problems associated with ‘Big Coal’. Another problem that comes with ‘Big Coal’ is its distorting effect on Australia’s political economy.

‘Big Coal’, the state and the distortion of the Australian economy

At present, five companies account for more than two-thirds of black coal mined here. These entities are: BHP Billiton, Rio Tinto, Xstrata, Anglo American and Peabody. (Pearse et al 2013, p.61) The first four are multinationals with diversified mining interests, whereas Peabody is solely concerned with coal mining. All of these companies are ‘overwhelmingly owned by institutional investors, most of them foreign owned.’ (Pearse et al 2013, p.63)

A sizeable number of the institutional investors are banks. Both Australian and overseas banks have been providing billions of dollars in financing to fund port extensions, new mines, rail and road infrastructure and sundry other services. As Pearse, McKnight and Burton point out, institutional investors such as banks operate to maximise returns, not to worry about harm to the health of workers, short and long term environmental damage and the like. Consequently, decisions are taken ‘that are not about what’s good for Australia, and even less about what’s good for the environment.’ (Pearse et al 2013, pp.66-7)

Also subjected to scrutiny are individual ‘coal barons’ such as Gina Rinehart, Clive Palmer, Andrew ‘Twiggy’ Forrest and Nathan Tinkler. Others such as Peter Bond and Chris Wallin who choose to remain out of the public eye feature in the book too. Plenty of information is supplied about the investments and backgrounds of the ‘coal barons’ whose number includes overseas or ‘offshore barons’. The background information here is almost worth the price of the book on its own.

The power of the coal industry is detailed in the chapter called ‘King Coal’s muscles’. In this chapter the authors spell out how ‘Big Coal’ gets its way with federal and state governments. The strategy has changed recently:

After the best part of two decades, where the mining industry had grown accustomed to setting out its agenda publicly and following up behind the scenes to ‘work things through’ with federal governments of both major political persuasions, the game had changed. In just three years the mining industry had waged and largely won three bitter fights with the federal Labor government where they relied on big-budget advertising blitzes to turbocharge their behind-the-scenes lobbying campaigns. (Pearse et al 2013, p.133)

The coal industry and its lobby groups have seen off the emissions trading scheme (ETS), helped topple Rudd, weakened the Carbon Tax and ‘gutted the extension of the Resources Super Profits Tax’ amongst other things. (Pearse et al 2013, p.134) The three writers show that ‘Big Coal’ is too powerful, and its pursuit of coal mining and export at all costs has seriously distorted the Australian economy. The chapter also highlights how shallow bourgeois democracy is in this country.

Much more can be found in the book. It is to the credit of Pearse, McKnight and Burton that in researching and writing their book they bring to light the costs to Australia and the world of the current coal boom.

 

Read this book.