Our ‘beautiful coal’ must rival Trump’s: Canavan

Resources Minister Matt Canavan has warned that Australia’s energy markets in Asia are under threat.

Resources Minister Matt Canavan. Picture: AAP

Resources Minister Matt Canavan has warned that Australia’s energy markets in Asia are under threat as the US ramps up exports of coal and gas under President Donald Trump.

Echoing Mr Trump, Senator Canavan described coal as a “beautiful industry”, but he warned that “We cannot take our prized position in Asian energy markets for granted”.

He said anti-fossil fuel groups were placing energy exports at risk, aided by the Labor Party, which had cast doubt on the $16.5 billion Adani coalmine and opposed new gas developments at state level.

Senator Canavan called for a new bipartisan agreement to secure the future of the nation’s fossil fuel industry and ensure Aus­tralia would reap the benefits of surging Asian demand.

He said his recent trip to Japan and South Korea reinforced that Australian exporters faced growing competitive pressures from the US. “We have benefited in the last 50 years from being in the right place at the right time as Japan, Korea, China and hopefully now India have developed.

“That has largely coincided with a period where the US has been an energy importer, and therefore not a competitor to us in a large way in north Asia. That has now changed.”

Mr Trump made headlines with his recent State of the Union speech when he declared he had ended “the war on beautiful, clean coal … We are now very proudly an exporter of energy to the world.” The US has been a net energy importer since the 1970s but is on track to become a net exporter by 2022, according to the US Department of Energy.

It exports shale gas to Japan, and Senator Canavan said there was interest from Asian buyers in sourcing US coal.

“We have plenty of gas left to develop, but the US will be a competing supplier for Asia — there’s no doubt about that,” he said. “We still have a good opportunity, because we’re closer, but we’ve got to be sharp.”

As gas is cheap domestically in the US, that “frees up (its) coal ­potentially to find other markets”.

Australia exported a record $56.5bn worth of coal last year, and $22bn worth of LNG.

Senator Canavan said the coal industry was “a beautiful industry full of beautiful people who I constantly try and fight for”.

He said Australia stood to reap a windfall from growth in India and Southeast Asia, but it could not do so unless it reassured investors that new projects such as Adani’s mine could get off the ground. “The Adani Carmichael mine is now a bit of a totem to indicate where the future of the country is going, certainly in India, but also across the world.”

Labor is under pressure to clarify its position on the Adani mine, a key issue in the Batman ­by-election, which the party risks losing to the Greens.

The Deputy Opposition Leader, Tanya Plibersek, yesterday said Labor had continuing concerns about the mine’s economic and environmental feasibility.

She rejected suggestions by Adani Australia chief executive Jayakumar Janakaraj that this position risked inter­national perceptions about Australia as an investment destination. “We’ve got every right as a ­nation to say we’ll make decisions in our own best interests, in the best interests of our economy and our environment,” she told ABC’s Insiders.

The Minerals Council of Australia said Australia had a strong geographic advantage when selling resources to Asian markets, but it needed to contain costs.

EnergyQuest says Australian gas exported to Japan averages $11.09 a gigajoule, compared with $11.14/GJ for US-supplied LNG.

Australian metallurgical coal costs $96 a tonne to produce and $12.80 a tonne to ship to India (compared with $112 and $24 for the US), says the AME Group.