We take a funny / angry swing at the suits at Four Corners who claimed that ‘coal is dead’ on Monday night.

WARNING: For those of you watching Four Corner’s – The End of Coal – on Monday night without the urge to hurl something at the TV screen, this blog post isn’t for you.

Its ‘unfashionable’ to work in coal.

To an ominous soundtrack, Kerry O'Brien launches his 43 minute eulogy for the ‘dead’ Coal Industry using passionate vocab. Claiming Australia has a ‘love affair with coal’ which is an ‘unfashionably dirty fossil fuel’ then he warned us all that the ‘war on coal is escalating’. Woven amongst this nonsense, is a bunch of facts that are treated as ‘side notes’ rather than the most poignant statements being made. He admits that 75% of Australia's energy comes from coal, exporting coal is the origins of $40 billion of dollars of our country's income, that the industry has been the source of our national prosperity for the last 30 years and that we have some of the richest coal fields on the planet, possessing the 4th biggest coal reserves in the world. He then quickly acknowledges that shifting away from coal would have severe impacts on our economy and our country.

But you’re right Kerry. Coal is unfashionable. And like a family-sized snuggy with four sets of armholes we bought on the internet last year for Christmas, we better ‘bin’ it before it gets socially awkward for us.

Four Corners rolled out a bunch of analysts from here and overseas who share their ‘opinions’ about the coal industry (none of them work directly in coal), with no voices of reason from the communities of people who our coal industry employs or any commentary from the industry itself. Kerry assures us that he reached out to Whitehaven and Adani for comment but they didn’t get back to him. What about ACARP or the Australian Coal Association? What about the Resources Council of Australia or Australian Mines and Metals Association? Surely these guys would have some useful insight to share?

Did your emails get stuck in their spam folders too Kerry?

Commodity Price Fluctuations & Coal Mine Profitability

Here is a map of general commodity price fluctuations over the last 100 years. Now the important thing here is that coal prices have fluctuated pretty consistently, in similar length cycles since the world began digging it out of the ground and burning it to power every economic endeavour since industrialisation. But the pundits are saying now that coal price will never improve and the coal boom is dead, holding grave financial fears for every coal project on the slate in the future.

Even analysts on the program itself admitted that it’s unfair and incorrect to forecast the profitability of a coal mine being established now in the current commodity price framework on today’s coal prices because prices will change over the life of the coal mine. In fact, if you look at the graph, you can assume they will change quite substantially every two years.

Adam Smith - pretty spot-on about economics.

This recent coal price slump has been protracted, by historical standards, but if the graph proves anything – it is that there is no historical precedent for an ongoing complete ‘flat-lining’ of coal prices or any commodity price for that matter – what goes down does always come back up.

And if we are to believe this guy, Adam Smith, who is the grandfather of modern economics – the only certainty in economics is the cyclical nature of it. So while the ‘goldfish’ analysts swim around the bowl and forget where they are every 5 seconds, the coal slump we are experiencing now is just forbearing a coal price increase. Its not a matter of if, its simply a matter of when.

International demand for coal forecasted to grow.

China is the world’s largest consumer of coal, (yet our largest export markets are the economically developed powerhouses of Japan and Korea), and they are making inroads towards reducing their reliance on coal. That is a statement of fact. What is up for question, is how fast they will achieve this given their more pressing issue of pulling hundreds of millions of their residents out of abject poverty.

The current coal price slump has not happened because coal is unfashionable, it has been an unfortunate set of market conditions that have arrived at the same time - diminished growth in demand from the world’s biggest buyer (China) and the structural mismatch in accelerated supply.

But demand for coal is forecasted to grow overall over the next four years. Says who you ask? Well, the International Energy Agency (also cited briefly in the Four Corners report) – the global research centre for energy forecasting and demand.

“We have heard many pledges and policies aimed at mitigating climate change, but over the next five years they will mostly fail to arrest the growth in coal demand,” says IEA Executive Director Maria van der Hoeven at the launch of her new report into global coal demand.

Global coal demand growth has been slowing in recent years, and the report sees that trend continuing. But it’s still GROWING. Coal demand will grow at an average rate of 2.1% per year through 2019, the report said. This compares to the actual growth rate of 3.3% per year between 2010 and 2013.

During a segment sledging Indian coal mining giant Adani for wanting to mine our clean, high quality coal in the Galilee Basin, more analysts admit that Indian Government is determined to bring affordable energy to the 280 million people living without power in India in the next four years and that Indian domestic production of coal can’t do this for them. They clearly state that importing coal, and lots of it, is the only way they’ll hit that target.

The tale of the angry bird and the plant. The humans stay silent.



Four Corners traveled over the Galilee Basin by chopper with environmental activist, Derec Davies of Coast and Country who is currently taking Adani to Land Court over a bird, some spring water and a plant, stalling the final approvals process and delaying the start of the project. Derec believes we may wipe out this bird, plant and dirty the water in the local area in the process of mining the coal at Carmichael Mine.

I noticed that the Four Corners journalist didn’t share a chopper with anyone speaking for the human owners of our plant hire companies in the local area with millions of dollars in debt and machines parked up all over their yards – to hear their view on whether Central Queensland could economically and socially benefit from the $4 billion to be invested in the development of the mine and associated infrastructure. The principle concern was for the bird, plant and the creek.

Now I’m not saying that the creek, the bird and the plant don’t have legitimate claim to be cranky about the impact the Carmichael Coal Mine may have on their environment and I’m not mocking the need for environmental considerations to be investigated in the mining industry. Not at all. What I’m asking for is commensurate consideration and air time to be given to the impact on the humans living in Australia if the industry it currently thrives on is hampered, discouraged or shut down at pace, with no contingency in place.

Given we are the apex predators, we have earned the evolutionary luxury through centuries of scrapping our way to the top of the food chain, of at least having an opinion in these matters. So why weren’t the ‘people’ who will be affected by shut down of this project to save the bird, plant and creek, being asked for their two cents if this is to be a balanced view?

Why Coal Divestment Campaigns will Fail

The malarkey of the ‘divestment’ movement in fossil fuels, led in-part by untouchable billionaires Bill and Melinda Gates and a man who has a catchy rap song about divestment on Youtube, is all about encouraging investors to sell their fossil fuel stocks for altruistic reasons.

Valerie Rockefeller, heir to one of the largest fossil fuel generated family fortunes on the planet, shares some ‘facts’ about coal divestment. Over the past five years, the SMP has gone up 5% but coal stock prices have gone down by 71%, stating that investing in coal ‘simply doesn’t make any sense any more’. To put more money into coal is ‘denying science’ and ‘denying the data’. What she isn’t saying – is that divestment in coal right now is about the profitability of coal companies in the face of slumped prices, prices caused by the economic principles discussed above, instead insinuating that investors are dumping coal stocks for ‘altruistic’ reasons – which is simply not the case on this scale.

Now one thing money markets almost never are: is altruistic. Stock markets exist to make money for investors. So if there is a campaign encouraging investors to divest in fossil fuel stocks for altruistic reasons, it will cause an unnatural devaluation of these stocks which is not consistent with the performance of the companies, their profitability or their market capitalisation. Cheap, undervalued stocks on markets rarely last long – meaning that no matter how many people are altruistically divesting in coal stock, there will be a greater proportion of profit-motivated individuals who will likely still trade them and make a bunch of cash on the flip-side, ultimately returning these stocks to a price equilibrium.

It is a very long bow to suggest that if Al Gore, Bill Gates, the Rockefeller family and a handful of other wealthy celebrities, who are in the top 2% of our planet’s richest people encourage us regular folk to sell our meager portfolios of fossil fuel stocks that they will bankrupt the coal industry on a commercial level. Good luck fellas. Or Fellers.

Our investment in the coal industry is ‘baffling’ to a Rockefeller.

Valerie Rockefeller can’t believe why Australia, who she considers to be a progressive, wealthy country isn’t more motivated to be ‘a part of a solution’. We’re stuck in the past, instead of looking towards the future, she alleges. She then goes onto to insinuate inappropriately close relationships between our Government and the coal industry. She believes that what is happening in the Galilee Basin is ‘heartbreaking’ and she is baffled as to why we would be facilitating the Carmichael Coal Mine establishment.

I’m sure after a rap-over-the-knuckles from a millionaire whose life’s work is spending the money earned by her ancestors three generations removed from the dirty spoils of fossil fuels – that all of us regular Australians who earn our living supplying labour, services and products to the highly lucrative and large coal industry really had a long, hard look at our professional choices.

And the sledge she took at the coal mining industry for being too close to the Government made no one raise an eyebrow – anyone in business knows you should probably have a good working relationship with your largest debtor.

I know it must be hard for her to understand the economic necessity of finding and keeping work where you can. I’m sure that almost everyone working in the coal industry would trade jobs wearing filthy, blackened PPE for the long-lunches enjoyed by the handful of people lucky enough to spend their days trotting around the world as professional venture capitalists and philanthropists. Its great work if you can get it, I guess.

Coal is not dead.

Coal - having a midlife crisis but not dead yet.

Coal is not dead. Not even close. It’s probably entering its twilight years, but it’s still taking Samba classes on a Wednesday night and water-skiing on its weekends. It’s still very much alive. It does face an uncertain future and you won’t get argument from anyone anywhere that the industry will ultimately cease to exist at some point long into the future. It will be outmoded, or our reserves will run out or both.

Until then, Australia will continue to be a major global supplier of clean, ethically and safely mined coal for decades. That said, we don’t deny there is a transitioning happening. What happens to Australia and our national prosperity when this transition is happening is what needs to be managed and we need to find jobs and ensure structural re-skilling over time for the hundreds of thousands of Australians employed by, or supplying to, this sector.

The reason we have the luxury of sitting inside our houses spending 43 mins of our life on an unbalanced, unfair and incorrect investigative reporting on our nationally funded TV station is because Australia enjoys a level of economic wealth and prosperity that affords us both the time and media air space to talk about softer subjects like climate change ad infinitum. Media commentary delivered to your living rooms by the energy generated by coal.

If we ‘bin’ the coal industry on the basis of these alarmist and short-sighted arguments, plunging 54,000 Australian families into joblessness immediately and wiping $40 billion off our export terms, then maybe climate change will seem less urgent than the need to return a giant chunk of our population to above the poverty line once again or to correct our surging unemployment rate.

So if the irony here is lost on you, I’ll spell it out. That the prosperity the coal industry has afforded this country, has given us the opportunity to take it for granted, subsequently turn on it and come after it with our pitch forks and torches wanting it dead. And we better light those torches real good. Because if we shut down the coal industry tomorrow, we’ll be back to rubbing sticks together again until renewables become even remotely affordable and scaleable.

A subject for another time perhaps. All this ranting has made me tired. Please comment, share and debate.