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| Minister for Northern Australia Matt Canavan. |
Aiming to open up vast new deposits for export, the government is mobilising against warnings about the "end of coal" as it considers a $1bn loan for the Adani mine in central Queensland on the condition the cash will help further projects.
Resources Minister Matt Canavan told The Australian it would be hypocritical to stop coal production or exports on the grounds that developing nations should not use fossil fuels to drive their economic growth.
"We can't deny people the same benefits that we accrue from permanent and reliable electricity — that would be immoral," Senator Canavan said.
"For the foreseeable future, coal will remain one of the core parts of the energy supply mix to provide people with electricity."
Senator Canavan dismissed claims from Greenpeace and the Greens that demand for coal would shrink over the decades ahead, pointing instead to growing demand from Asia to justify opening up new mines in the Galilee Basin in central Queensland.
In a test of strength over coal exports, environmental campaigners have fired a volley of legal challenges at Adani's $16.5bn project in the hope of blocking all new mines, but the government is urging support for the Indian company and its customers.
Senator Canavan said Australians who used fossil fuels to fly around the world or used coal power to light their homes were in no position to deny the same power to Indian consumers who wanted cheap power.
"In the broader global context, it's also mean-spirited because this is life and death for people in other parts of the world," he said.
"They still use a lot less coal than we do.
"We can't deny them the same resource we use to lead our relatively rich and prosperous lives.
"Given that the developing part of the population is about 80 per cent of the world and will grow as a share of the world over the next 20 or 30 years, coal use will increase."
Despite fierce campaigns against coal projects in Australia, the latest world outlook from the International Energy Agency tips annual Australian coal production to rise from 408 million tonnes two years ago to 467 million tonnes in 2040.
Overseas coverage of the IEA report has emphasised the slowing demand for coal in Europe, the Americas and China over several decades, but it shows an expansion for Australia even when assuming a global agreement on climate change.
The IEA forecasts a $104bn investment in coal supply in Australia over the period to 2040 because of demand from Asian customers.
Senator Canavan said the forecasts countered claims about the end of coal.
"In the Asia-Pacific … coal demand has increased substantially this century and all of the major economies of the region are planning for coal to be a major part of their future development," he said.
Even so, the IEA warns that Australian government plans to tap new deposits in the Surat and Galilee basins will depend on demand from India — the same point made by critics of the Adani project, who believe it will not be commercially viable.
"A tapering of India's imports would make the economics of remote (Australian) projects that require infrastructure development increasingly questionable," the IEA said in its global review.
While the IEA says 500 million people will remain without electricity at all by 2040, the Overseas Development Institute warns against using coal to provide cheap power to the developing world on the grounds that air pollution from coal causes 770,000 premature deaths a year in China and India. It also says solar power is cheaper for local communities that lack connections to transmission grids.
Bloomberg New Energy Finance reported this week that solar power prices had fallen 62 per cent since 2009 and put it on track to become cheaper than coal-fired power in some parts of the world.
The cost of solar power would fall below coal by 2030, it said.
Adani is seeking a concessional loan worth $1bn from the Northern Australia Infrastructure Facility to help fund a rail line from the Carmichael mine to a coal-loading terminal at Abbot Point, near Bowen.
Senator Canavan said no decision had been made on the request but the "only reason" the funding could be justified was to open up more mines after Adani's project.
"There are three other mining companies with multiple tenements in the Galilee Basin that are not at the same developed stages — some of them are more advanced than others," he said.
"The rationale for the government being partners in building the coal line is that it opens up the first new coal basin in Australia for 40 years, that it can then help spur development of these other projects."
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