Coal news and updates

As the fossil fuel industry appears increasingly shaky, the cost to the federal budget of stopping all new coal and gas projects in Australia has plummeted – costing less than 20% of what it was estimated to just 2.5 years ago, according to official parliamentary costings seen by Guardian Australia.

The Greens have a policy of approving no new thermal coal or unconventional gas projects in Australia. That includes new mines, as well as expansions to existing mines.

In 2013 the party obtained costings from the parliamentary budget office detailing their estimate of how much revenue the federal budget would lose as a result of reduced tax and any other costs, if the policy was implemented.

It was then estimated the policy would result in the government missing out on $1.5bn over the forward estimates – the four years to July 2017.

The Greens asked for the same advice again this year and that figure dropped dramatically to just $290m over the forward estimates – the four years to July 2019.

With coal and gas prices dropping around the world, the number of new fossil fuel projects expected to be developed is now fewer than it was in 2013. In addition, the profits those companies would make – and the tax the government would therefore miss out on if they were banned – has reduced over the period.

The costings fit with several other developments in recent months.

• AGL recently pulled out of the coal seam gas industry in Australia, citing a lack of expected returns.

• Peabody – the world’s largest coal miner – has indicated it is likely to soon file for bankruptcy.

• ANZ alerted the Australian stock exchange that they had more bad debt than they thought, as a result of resource companies failing to make payments on their loans.

Of the $1.2bn wiped from the tax revenue the government would expect to get from new coal and gas projects, just $70m was a result of the minerals resource rent tax being scrapped. The vast majority was due to fewer and less profitable projects.

At the time of writing, the latest report used by the Parliamentary Budget Office to examine the number of future coal and gas projects was not available. But comparing the report used in the 2013 costing and the most recently available report (from October 2015) reveals a sharp decline in proposed coal and gas projects.

In April 2013, there were 19 coal mines that had been publicly announced – a number that had dropped to just 10 by October 2015.

Similarly, publicly announced liquefied natural gas, gas and oil projects had dropped from 12 to three over the period.

Source: The Guardian