Wednesday, November 09, 2011

Carbon tax, the Sydney/Gunnedah/Bowen Basin & coal seam gas

Late yesterday the heavens opened. The torrential rain that followed beat in through partially open windows, overflowed gutters and ran down inside the glass. Water on power boards blew the circuit breakers. We put new boards in and got the power back on, but the internet connection was not properly restored until this morning. Sigh.

Yesterday the carbon tax legislation passed the Senate. In Sydney today's Daily Telegraph carries the banner headline "Just who's going to pay our bills?"  An editorial is headed Heaven-sent tax for the select few and begins: "THIS government never learns."

To my mind, the debate is a bit silly.

One side says the sky will fall, costs will sky rocket. The other side and especially the Greens talk in almost millennial terms about a bright new future. Nice atmospherics within the political theatre perhaps, but in a way it all misses the point.

Now that the legislation is through, the final political results will be determined by what actually happens over the next few years as a consequence of the legislation. I don't think that we really know that yet. We just have to wait and see.

The Government is talking about an advertising campaign to promote the legislation. Why bother? It's not going to have any real impact on public opinion, other than perpetuating current debate.

In an apparent segue, the popularity of geography and geology in Australia has declined somewhat since I was a kid. That's a pity, for it helps understand some current political issues in this country.

Australia is often described as an ancient continent in geological terms with the western two thirds of the continent having a basement of Precambrian rocks between 570 and over 3,000 million years old. Eastern Australia is much more recent, although "recent" is a relative concept.

At the risk of gross simplification, I am still writing up my own notes in this area, the eastern seaboard of what is now Australia lay well to the west of the current coastline.

Deposition into the eastern sea occurred. In places, the water was shallow enough for corals to form. Subsequent folding and faulting, the break-up of the giant continent  now called Gondwana and volcanic activity all worked on the geology. One result was the creation of a large basin - the Sydney, Gunnedah, Bowen Basin - flanked on one side by the Lachlan Fold Belt, the New England Fold belt on the other. That Basin reflects the old sea. The original deposition resulted in the creation of huge coal deposits that run from south of Sydney well into Queensland.

  Coal mining and especially the extraction of coal seam gas has become a major political issue. Initially the discontent was a little below the main media horizon, although I did write about it on the New England Australia blog as one element in New England's environmental wars. The possible extraction of coal seam gas from coal seams under urban Sydney then brought the issue within the metro purview. We now have a 3,200 kilometre arc of political discontent.

The issue has now become politically significant to three Governments, Queensland, NSW and the Commonwealth. Key parts of the Gunnedah portion of the Basin - the Liverpool Plains -  fall within Tony Windsor's New England electorate. The Government depends upon Tony Windsor for its survival in general and for the prospective passage of the proposed mining tax legislation in particular. Mr Windsor has made it clear that some form of action on coal seam gas will be the price of that support.

The disputes over mining and coal seam gas raise some quite complicated and in some ways intractable issues. The domination of political discussion by refugees, the carbon tax and Labor's leadership issues as well as the country nature of the protests means that main stream reporting of the coal and coal seam gas imbroglio has been quite superficial. You can expect to hear a lot more about it over the next two months.    


Anonymous said...


While I'm happy to 'do my bit' towards a cleaner future for kids and grandkids I cannot understand how we can be allowing the offshore purchase of carbon credits as part of this current scheme - given the quite large price differential. Or is this yet more smoke and mirrors by those opposed to the basic concept that today's Aussies should contribute towards the future health of future Aussies?

Fine by me to give certain polluting industries a means of financing their movement to a cleaner method of operation; but why allow this to be achieved by basically exporting our dollars? I really would much rather any funding roundabout to be held within our economy.

I guess the above demonstrates only one thing - my own ignorance at this stage.


Jim Belshaw said...

The argument runs this way, KVD.

Our aim is to reduce net carbon emissions in general, not just Australian. We can reduce net carbon emissions by cutting emissions and/or by increasing carbon absorption. We want to do all this in the most cost effective way.

If Australian industry is limited just to local offsets rather than the lowest cost offsets, an additional cost is imposed without affecting the end carbon result.

Anonymous said...


Accepted, but ours are 'set' at $20 plus - and then to increase, while overseas they 'trade' at $8-9, not forgetting India at $1

Your last para is fine, except it would be a shame if our industry were able to satisfy this regime after being granted a credit of $20+ by 'purchasing offsets' at $8-9

As I say - I don't understand. Mainly the bits in 'quotes'.


Jim Belshaw said...

Why would it be a shame, KVD?

So long as there a reasonably rigorous assessment process of the credits themselves, being able to buy cheap credits will ease the adjustment process.

Rod said...

Hi Jim,

On coal seam gas why do you think this has become such a major political issue? I see so many posters saying "NO CSG, Water is Life" and I can't help but wonder if it is more appropriate to say "NO CSG, Fear is Life!" My interpretation for the Northern Rivers (The Gunnedah-Bowen basin may be slightly different) is lots of people being worked into a frenzy, a development of fear over knowledge. A bit like the terrorists coming on leaky boats! But maybe I'm missing something.


Jim Belshaw said...

Rod, the thing that you may be missing is that CSG has become lightening road for a whole range of other issues. There are also specific features with CSG that concern people.