Tuesday, October 13, 2015

Projects like Adani's are vital to lift India's millions out of poverty

Recent comments by India's Energy Minister Piyush Goyal should be compulsory reading for opponents of both the proposed Adani coal mine in the Galilee Basin and possible Federal Government amendments to national environmental legislation to deter vexatious environmental action.

Goyal reportedly told attendees at a Bengal Chamber of Commerce Environment and Energy Conclave last month that coal-based thermal power would remain "the staple power source for India".

He pointed out that most Western developed countries had "enjoyed the fruits of low-cost affordable thermal power for the last 150 years ... built their roads and ports, railways, airports, created large infrastructure and given jobs to their people", but that "today, we are being told about climate change ... without taking into account the concerns of the poor of India".

He added that:  "For the last 150 years, the West had coal — they reached a stage of development with $40,000-$70,000 per capita income and want poor Indians with $2000 per capita income to reduce use of coal ..."

This moral dimension should be kept in mind when people debate the desirability of increasing Australian coal exports.

Affordable electricity fuels the production and safe storage of food, clean drinking water, the mass manufacture of clothing and housing, the ability to heat and cool our living and working spaces, access to and safe storage of medicine, and improved transport options.  In other words, a better quality of life.  At least 300 million people in India have no access to electricity, and about 815 million people still rely on wood, dung and crop waste for cooking.

The United Nations has predicted that an extra 404 million Indians will live in cities by 2050, which will itself drive demand for additional grid power.

Narendra Modi's Government's new "Make in India" initiative, which aims to transform India into a new global manufacturing hub, will also necessitate significant investment in the size, quality and reliability of its electricity network.

Yet, while the Indian Government is exploring all options to improve the living standards, health, housing and employment prospects of its people, environmental activists in Australia seek to deny Indians the fuel to achieve this goal.

The International Energy Agency predicted that India will add another 342 gigawatts of coal-fired generation capacity before 2040, will overtake the US as the world's second biggest coal importer by 2020 and the world's largest coal importer by 2025.

New power station standards from 2017 will necessitate the importation of higher quality (i.e. high energy, low emissions) black coal, the type of which Australia, and Queensland in particular, has in abundance.

I published new research in June 2015 that found, using very conservative figures, that exporting an additional 120 million tonnes of high-quality Australian coal each year would enable 82 million Indians to access a regular and reliable source of electricity annually.

That Australia should take the opportunity to meet this demand, especially when cleaner Australian coal would replace lesser-quality Indian or Indonesian product, is a no-brainer.

As taxpayers, we should be grateful when any company, large or small, Australian, Chinese or Indian, seeks to invest in our country, employ people, build infrastructure and contribute to our enviable lifestyle by paying us taxes.

It is world demand for thermal coal that is driving new mines, not the other way around.  If the costs didn't add up, the private sector wouldn't want to invest its money.

It should be the genuine need of the market that determines whether a particular mine gets off the ground, and the final destination of its product.

The environmental movement can't be too confident of coal's "inevitable demise" when it is so desperate to increase taxes, shut mines, run court cases, ban new mine development and sponsor divestment campaigns.

If we are hungry, we can just go to the fridge, or put something on the stove.

If we feel hot or cold we can just turn on the airconditioner or heater.

If we need electricity we just put a plug in the socket.

Coal is the world's most important source of power because it is cheap and plentiful, and can run 24/7.  Solar and wind technology is yet to overcome the intermittency problem, and can't fully power a modern industrial economy.

Let's proudly help the citizens of the world's largest democracy to achieve a higher standard of living and reduce poverty.

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