Submission to NSW Government Planning Assessment Commission · Key issues are being deliberately ignored . We are currently living in a “Fool’s Paradise”, ignoring critical

Submission to NSW Government

Planning Assessment Commission concerning

R033/15 - Airly Mine Extension Project Review

by: Geoffrey Miell 23 September 2015

Key issues are being deliberately ignored

We are currently living in a “Fool’s Paradise”, ignoring critical issues which will affect our country in both the short term and long term.

Irrespective of politics, the key drivers of our society and economy from now on will be:

• Climate change; and • Energy. These two drivers are inter-connected. This submission briefly looks primarily at energy, and its relationship with the Airly Mine Extension Project. 23 Sep 2015 2 Geoffrey Miell - PAC R033/15 Airly Mine

We live on a finite planet, with: •Finite lands; •Finite oceans, seas, lakes and rivers; •A finite atmosphere; and •A finite Total Solar Irradiance (TSI) Good planets are hard to come by

23 Sep 2015 Geoffrey Miell - PAC R033/15 Airly Mine 3

Photo: NASA

Our civilisation is currently heavily dependent on fossil fuels for our energy needs

Global primary energy consumption: • Fossil Fuels: 78% • Wood & Dried Dung: 10% • Hydro: 6% • Nuclear: 5% • Other Renewables: 1% Source: PBS Documentary, Earth: The Operator’s Manual, 2012

Nothing happens without energy

Australian primary energy consumption in 2012-13: • Oil, including crude,

condensate and liquefied petroleum gas (LPG): 37.7%

• Coal, both black & brown: 33.1%

• Natural Gas: 23.6% • Renewables, including wind,

solar, geothermal, hydro, wave, tidal & biofuels: 5.6%

Source: BREE, Energy in Australia 2014, pp26-28


We behave as if our principal energy resources will go on forever The energy resources oil, natural gas, coal,

uranium and thorium are: • Finite • Non-renewable • One-time use • Depleting How much longer before our current principal

energy resources become scarce?


Global oil reserves to production

According to the 64th edition of BP Statistical Review of World Energy, published mid June 2015, our world has:


Global oil production in year 2014

Global oil reserves at end of year 2014

= 1700.1 giga-barrels

= 32.37

giga-barrels/year

52.5 years

1 giga-barrel = 1 billion barrels = 1 000 000 000 barrels = 158.99 billion litres = 6 117.86 peta-joules equivalent

Australia’s oil production peaked in year 2000 and is now in decline


Source: Energy Watch Group, Fossil and Nuclear Fuels – the Supply Outlook, Mar 2013, p53

In 2014 Australia produced 0.5% of the world’s total oil production. Australia’s R/P is 24.3 years from year end

2014. Source: BP Statistical Review of World Energy 2015

Australia’s worsening liquid fuel security situation

Australia is moving towards a situation, by 2030, we could have: • No refineries; • Less than 20 days of liquid fuel; and • 100% imported liquid fuel dependency. Currently Australia has 4 refineries, ~22 days of fuel stock and 90%+ oil/fuel import dependency Source: NRMA, Australia’s Liquid Fuel Security Part 2, 2014, pp6-7


US oil production is insufficient to provide US energy independence



In 2014 the US produced 12.3% of the world’s total oil production. The US is currently the world’s 3rd largest oil

producer. Source: BP Statistical Review of World Energy 2015

Global ‘peak oil’ is inevitable It is only a question of when

• Many producing countries have already passed peak oil production

• More post-peak countries must be compensated by ever fewer pre-peak countries



Will there be a post-peak oil world before 2030? – Some think so

The world’s oldest ongoing peer-reviewed scientific journal has stated:

“Following an earlier literature review, we concluded that a sustained decline in global conventional production appears probable before 2030 and there is significant risk of this beginning before 2020. This assessment excluded tight oil resources since these were classified as unconventional. However, on current evidence the inclusion of tight oil resources appears unlikely to significantly affect this conclusion, partly because the resource base appears relatively modest.”

Source: Philosophical Transactions of The Royal Society A, 2014 372: 20130179, Introduction: The future of oil supply, RG Miller & SR Sorrell, 2 Dec 2013, p17


What does a post-peak oil world mean for us?

• Less liquid fuels – petrol, diesel, LPG, kerosene, bunker fuel

• Higher fuel prices impacting on: – Nearly everything we do; and – Nearly everything we buy

Can we afford to live in a post-peak oil world? Can we carry on with business, with fuel at

$2/litre, $4/litre, or perhaps 10 ‘bucks’ a litre? What effect will high fuel prices have on mining? 23 Sep 2015 Geoffrey Miell - PAC R033/15 Airly Mine 12

Dr. Fatih Birol, the chief economist at the International Energy Agency: "One day we will run out of oil, it is not today or tomorrow,

but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day“, Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said.

Source: The Independent (UK), interviewed by Steve Conner, published 3 Aug 2009

Governments & industry appear not to be heeding this message


Global natural gas reserves to production



Global gas reserves at end of year 2014

Global gas production in year 2014

= 187.1

trillion cubic metres

3.46 trillion m3/year

= 54.1 years

1 trillion cubic metres = 1 000 000 000 000 cubic metres = 38 200 peta-joules (average, IEA)

Australia’s ‘easy’ gas could all be gone in 2 to 3 decades, most of it exported as liquefied natural gas


Incr

easi

ng c

osts

to

ext

ract

Source: Energy White Paper 2012, p136

EDR Sub-EDR

US gas production has plateaued and is expected to decline soon



In 2014 the US produced 21.4% of the world’s total gas production. The US is currently the world’s largest gas producer. Source: BP Statistical Review of World Energy 2015

Global gas production is projected to peak soon



On 13 October 2014, then PM, Tony Abbott said :

“Coal is essential for the prosperity of Australia. Coal is essential for the prosperity of the world. Energy is what sustains prosperity and coal is the world's principal energy source and it will be for many decades to come.” Source: ABC, Four Corners, “The End of Coal?”, broadcast 15 Jun 2015

Coal is certainly one of the world’s principle energy sources now, but for how much longer? What does the evidence say?


Global coal reserves to production



Global coal reserves at end of year 2014

Global coal production in year 2014

= 891.53 giga-tonnes

8.1 giga-tonnes/year

= 110 years

1 giga-tonne = 1 billion tonnes = 1 000 000 000 tonnes Includes all known global anthracite, bituminous, sub-

bituminous & lignite reserves on a tonnage basis, but there’s significantly less than a century on an energy basis

Most important coal countries in 2014 (all coal, both black & brown)

Rank 1 Country

Rank 2 Country

Rank 3 Country

Rank 4 Country

Top 4 % Share

of Global Total

Reserves (Mtonnes) (% share)

USA 237 295

26.6

Russian Fed. 157 010

17.6

China 114 500

12.8

Australia 76 400

8.6 65.6

Production (Mtoe) (% share)

China 1 844.6

46.9

USA 507.8 12.9

Indonesia 281.7

7.2

Australia 280.8

7.1 74.1

Consumption (Mtoe) (% share)

China 1 962.4

50.6

USA 453.4 11.7

India 360.2

9.3

Japan 126.5

3.3 74.7


Mtoe = million tonnes oil equivalent = 41.87 peta-joules (IEA) Source: BP Statistical Review of World Energy 2015, pp30, 32-33

World hard coal production 1960 – 2100 by region


Source: Energy Watch Group, Fossil and Nuclear Fuels – the Supply Outlook, 2013

China’s R/P is 30 years from year end 2014, hence the steep decline after 2020-25

2012 Projection

Airly Mine Extension Project is for 20 years production (or until 2035)


Will Airly Mine remain viable towards the end of its operating life in a very challenging future for coal?

2015-35

Scenario of world supply of fossil fuels and uranium


2012 Projection

World fossil fuel supply is close to peaking, with declining global oil production consequently initiating a rising energy deficiency that coal and/or gas will be unable to compensate for. Source: EWG, Fossil and Nuclear Fuels – the Supply Outlook, Mar 2013, p132

NSW base-load electricity generating assets are ageing


Source: NSW Parliament, Public Accounts Committee Report 6/55 –Nov 2012, The Economics of Energy Generation, Fig 20

Mount Piper is the youngest NSW coal-fired power station, expected to retire by 2043. Wallerawang was retired last year. Where will our affordable energy come from in future?

Comparing levelised costs of electricity (LCOE) generation (2011 A$/MW-hr)

TECHNOLOGY AETA 2012*

AETA (excl. CO2

price)

UKDEC 2011*

IEA 2012

IEA 2010*

Supercritical pulverised (S/P) brown coal

162 95 - - -

S/P brown coal +CCS 205 192 - - -

S/P black coal 135 - 145 89 - 94 - 68 103

S/P black coal +CCS 162 - 205 153 - 196 167 - -

Combined Cycle Gas Turbine 96 - 108 81 - 93 118 49 97

CCGT +CCS 142 - 166 137 - 161 162 - 122

Nuclear (Gen 3+) 94 - 99 94 - 99 - 83 91

PV – non-tracking 212 - 264 212 - 164 485 243 391

Wind – on-shore 111 - 122 111 - 122 139 87 83

23 Sep 2015 Geoffrey Miell - PAC R033/15 Airly Mine 25 Source: BREE, Australian Energy Technology Assessment 2012, p91, * Includes carbon price

Australian political party targets on energy & carbon emissions

• The Greens: “Power Australia with at least 90% renewable energy by 2030, by increasing the Renewable Energy Target.” greens.org.au/clean-energy-roadmap

• Australian Labor Party: 50% of Australia’s large-scale energy production generated using renewable sources by 2030. abc.net.au/news/2015-07-22/ ... /6638880

• The Coalition: Reduce Australia’s carbon emissions by 26 to 28% on 2005 levels by 2030. smh.com.au/federal-politics/political-news/ ... , 12 Aug 2015


In conclusion – the big picture • Our civilisation is currently heavily dependent on fossil fuels

for our energy needs, and these are depleting rapidly at unprecedented rates.

• A post-peak fossil fuel world appears probable before 2030, with consequent increasing scarcity of fossil fuels together with probable rising prices.

• Alternative affordable energy solutions are available now to replace existing coal & gas-fuelled electricity generation assets – we must quickly begin an orderly, substantial transition away from fossil fuels BEFORE fossil fuels become scarce. Failure to do so risks our energy security & prosperity.

• The major political parties are pledging substantial reduced carbon emissions and/or fossil fuel utilisation targets.


The outlook for Airly Mine and the Lithgow LGA community

• Approval for the Airly Mine Extension Project appears questionable on an economic basis, given there is a continuing glut of coal at present. Nearby Angus Place mine (also owned by Centennial Coal) was placed in ‘care and maintenance’ in March 2015 due to poor market conditions. Airly Mine was restarted from ‘care and maintenance’ in March 2014 in the same apparent market conditions.

• The long-term viability of Airly Mine (and coal mining in general) appears questionable given the projected structural changes to global coal production in the 2020s and beyond, competition, and changing attitudes towards fossil fuels.

• Lithgow must prepare for a post-peak fossil fuel world BEFORE it inevitably arrives, or risk further economic losses.


Questions to ponder: 1. Nothing happens without energy. Where is our affordable

energy mix coming from in the next decade (the 2020s) and beyond?

2. Is Australia’s long-term energy security & prosperity at risk?

3. Will Airly Mine remain economically viable until 2035, and beyond, in these challenging times?

4. If the Airly Mine owner becomes bankrupt within the next 25 years, due to deteriorating economic conditions for the mine owner, how will the mine’s continued environmental obligations be met?

Thank you for your interest and attention. This submission’s author declares he has not made any political donations ever.


Further Background Information 1. GEM Energy, Capstone Turbine and The University of Toledo USA, Critical Power and Data

Center Summit, Keynote Address, The Nexus of Energy and the Risk in the 21st Century, by Dr. Robert L. Hirsch, Senior Energy Advisor MISI, 7 Nov 2012, 30min49sec, https://www.youtube.com/watch?v=2_paA-lm1zw

2. Post Carbon Institute, Drill, Baby, Drill: Can Unconventional Fuels Usher in a New Era of Energy Abundance? by J. David Hughes, Feb 2013, http://www.postcarbon.org/publications/drill-baby-drill/

3. ABC 7:30, How long could Australia survive if fuel supplies dried up? segment, Reporter Matt Peacock, 4 Nov 2014, 7min46sec, http://www.abc.net.au/7.30/content/2014/s4121593.htm

4. Waterloo Institute for Complexity & Innovation, WICI Occasional Paper No. 4, Twenty-First Century Snake Oil: Why the United States Should Reject Biofuels as Part of a Rational National Security Energy Strategy, by Captain T. A. ‘Ike’ Kiefer, Jan 2013, http://wici.ca/new/resources/occasional-papers/#no.4

5. Clean Energy Action, Warning: Faulty Reporting of US Coal Reserves, by Leslie Glustrom, Oct 2013, http://cleanenergyaction.files.wordpress.com/2013/10/warning-faulty-reporting-us-coal-reserves.pdf

6. Screen Australia / Smith & Nasht, Dick Smith – Ten Bucks a Litre, 4 Aug 2013, 54min33sec, http://www.youtube.com/watch?v=4M50QwQHZM8

7. Beyond Zero Emissions / University of Melbourne, Zero Carbon Australia Stationary Energy Plan, by BZE Executive Director Matthew Wright et al., Second Edition Aug 2011, http://bze.org.au/zero-carbon-australia/stationary-energy-plan


https://www.youtube.com/watch?v=2_paA-lm1zw

http://www.postcarbon.org/publications/drill-baby-drill/

http://www.abc.net.au/7.30/content/2014/s4121593.htm

http://wici.ca/new/resources/occasional-papers/no.4

http://cleanenergyaction.files.wordpress.com/2013/10/warning-faulty-reporting-us-coal-reserves.pdf

http://cleanenergyaction.files.wordpress.com/2013/10/warning-faulty-reporting-us-coal-reserves.pdf

http://www.youtube.com/watch?v=4M50QwQHZM8

http://bze.org.au/zero-carbon-australia/stationary-energy-plan

Documents

Submission to NSW Government Planning Assessment Commission · Key issues are being deliberately ignored . We are currently living in a “Fool’s Paradise”, ignoring critical