BHP boss dumps on future of coal

Sydney Morning Herald
Thursday 16/9/2010 Page: 1

THE world's largest miner, BHP Billiton, has weighed into the climate change debate, warning that Australia should "look beyond coal" and towards other energy sources. The chief executive of BHP Billiton, Marius Kloppers, said Australia's economy will suffer if it does not significantly reduce its carbon emissions in anticipation of a global carbon price. "Failure to do so will place us at a competitive disadvantage in a future where carbon is priced globally", he said.

BHP Billiton is one of the world's largest producers of thermal coal, which made up about 8% of its revenue last year. And while BHP Billiton and the broader mining industry have acknowledged the need for action on climate change. Mr Kloppers is now calling for Australia to take a lead on the issue. The mining industry, through the Minerals Council of Australia, was one of the most fierce opponents of the Rudd government's emissions trading scheme.

The call by Mr Kloppers, made at a business lunch in Sydney, is unlikely to be given a warm political reception. Both sides of politics are too scared to canvass the end of the coal industry because of the votes they would lose. Instead, both back the development of clean coal technology, such as carbon capture and storage. Mr Kloppers stressed the need for a clear price signal on carbon emissions and recommended a combination of a carbon tax, land use actions and a limited emissions trading system, which could apply to electricity generators. He said Australia's energy production was particularly carbon intensive and the highest among OECD countries in terms of tonnes of carbon emitted per unit of energy. Coal-fired power stations account for almost half of the country's emissions.

"Australia will need to look beyond just coal towards the full spectrum of available energy solutions", he said. The new Minister for Climate Change, Greg Combet, who has been charged with developing a policy involving a price on carbon, avoided mentioning coal when responding to the Kloppers speech. "My three priority areas are support for renewable energy, greater energy efficiency in industry and households, and working towards the introduction of a carbon price", he said. "I will be working with other parliamentarians, the business community and the environmental movement to build consensus and to discuss the best way we can achieve a price on carbon".

On the weekend, Mr Combet assured the coal industry that it had a sound future. Mr Kloppers emphasised the need for the revenue generated by any carbon price to be returned to the economy - for example, through tax cuts - to offset the cost impact of businesses and individuals. All of us who care about this issue need to also recognise that making a difference comes at a price, and it cannot be glossed over", he said. If Australia was to take the lead by implementing a carbon price before a global agreement was struck. Mr Kloppers said, it needed to ensure investment did not go offshore to countries without a price on carbon.

The opposition later, Tony Abbott's, has so far ruled out allowing coalition MPs to sit on a cross-party committee which will be established by the end of the month to discuss potential responses to climate change. The key independent MP Tony Windsor said Mr Abbott's position was a shame and Malcolm Turnbull and the opposition climate change spokesman. Greg Hunt would have to "have a lot to add". A spokesperson for the Energy Supply Association of Australia said Mr Kloppers had given "an interesting speech, but it doesn't change the energy supply sector's view in support of an efficient and equitable emissions trading scheme that is capital forming and allows a sensible transition to a lower emissions energy sector over time".