Coal and gas industry is at risk

The decision to block Clive Palmer’s Queensland coalmine ambitions because of the potential impact on the Great Barrier Reef adds to a growing list of obstacles being thrown up by the Albanese government to energy projects that traditionally have been the bedrock of Australia’s economic prosperity. Confirmation of the decision to disallow the Central Queensland Coal project is the first time the federal government’s Environmental Protection and Biodiversity Conservation Act has been used to block a coalmine. The mine was blocked despite the fact coalmining had existed in the region from 1918 to as recently as 1964. Some will argue there are special factors at play given the federal government’s sensitivity towards efforts by the World Heritage Committee to have the Great Barrier Reef placed on the in-danger list. Federal Environment Minister Tanya Plibersek said the mine would have “unacceptable impacts” on the environment and risked releasing sediment into the Great Barrier Reef. But the decision to block the mine cannot be seen in isolation.

There has been a series of anti-development and price control interventions that are testing the confidence of companies as they consider billions of dollars’ worth of investments that ordinarily would provide the government revenues of the future. Business leaders have warned the federal government’s crackdown on gas producers will trigger supply shortfalls, smash investment and drive up energy costs. The Australian Chamber of Commerce and Industry and the Australian Petroleum Production & Exploration Association have warned Treasury that the mandatory code of conduct and government-determined “reasonable price” for gas will shatter investor confidence. The industry says the combined mandatory code of conduct and $12-per-gigajoule price cap are “the worst possible reforms at the worst possible time”.

Measures to restrict fossil-fuel developments will never be enough for extremists. The Greens say the decision is the “thin edge of the wedge” and want refusal of the Palmer mine to be the template for how future developments are treated. They say with 118 coal and gas projects in the pipeline there are 117 left to stop. The impact already is being felt with rising prices and, in the case of AGL, falling profits. AGL on Thursday reported a $1.1bn loss because of the writedown of its coal generation assets. Energy security and economic reality demand the Albanese government snap out of its anti-development mindset.