As Yogi Berra said “it is tough to make predictions, especially about the future.” He could have added especially about the future use of energy.
Back in 2017, the International Energy Agency claimed that coal use would remain flat over the following 5 years to 2022. The results are now in. Coal use grew over the five years and hit a record annual demand of 8.3 billion tonnes in 2022.
The IEA is not Robinson Crusoe. They are just one of the many “respected” organisations who have got the predicted downfall of coal so wrong.
People have got it so wrong because they kept assuming coal was an expensive form of power. The IEA reluctantly admitted in their latest report that renewed coal demand was “mainly driven by being more readily available and relatively cheaper than gas”.
Of course, Australia continues to deny itself the use of this cheap and available fuel source. Australia has not been increasing its use of coal. The increased demand is coming from China, India and other Asian countries. Coal demand is up 8 per cent in India, 4.6 per cent in China and a whopping 36 per cent in Indonesia.
The cheaper electricity from coal is what allows those countries to take manufacturing jobs away from Australia and other countries.
Coal demand is even increasing in Europe, up 1 per cent over the past year. Germany has reopened 24 coal fired power stations in response to Russia’s war in Ukraine and the consequent interruption to its gas supplies.
Green activists often imply that Australia is somehow responsible for what they call a “climate crisis”. But their conclusions do not match the facts. Australia mines just 450 million tonnes of coal of the 8300 million tonnes that are used around the world. So Australia produces less than 6 per cent of the world’s coal production.
Because we have placed red tape on the opening of new coal mines, Australia has not benefited from the unexpected record demand for coal. During a year that coal demand surged, Australia’s coal production declined by 3 per cent. As the IEA noted, the muted coal supply response in developed countries like Australia and the US was partly because “poor perspectives for the sector dissuading financing and investment.”
Such anti-coal propaganda is not evident in non-western countries. The IEA concluded that Indonesia “proved to be the most flexible” and it increased its thermal exports by 9 per cent. Mongolia increased its exports of coking coal by 54 per cent.
The sad reality is that Australia is no longer viewed as a stable, reliable and accessible supplier of energy that we once were. Green and red tape is choking our opportunity to create wealth from the enormous demand for energy in our region as Asia grows.
That means fewer jobs for us but no decrease in the size of the global coal industry. We are too small to influence the global use of coal. But if we shut down our own mining jobs they will go to the other nations just like our manufacturing jobs have.
That brings to mind another Yogi Berra quote, “it’s like déjà vu all over again.”
