Business/Robbery, etc. Fossil fuels boom as Trump KO’s net zero

Michael Baume I 16 November 2024 I Spectator Australia

It’s not just ‘drill, baby, drill’ for oil and gas, it’s also ‘dig, baby, dig’ for coal. President-elect Donald Trump’s vow to promote fossil fuels, weaken pollution regulations and reverse President Biden’s economy-hobbling climate agenda, were key domestic issues that helped win him the presidency for the second time. But implementing them will have a significant impact on the rest of the world – particularly Australia which, like the US, sees Asia as a market for what will be an expanding, rather than contracting, US fossil-fuel industry.

Add in the impact of Trump’s inevitable dumping of the Paris Agreement (the legally binding treaty on climate change that set what are now clearly unachievable objectives), and the Lowy Institute’s The Interpreter sees all this as ‘removing a key source of pressure on other major emitters, including China and India and will embolden climate sceptical politicians the world over to roll back existing commitments’. No wonder climate catastrophists like Christiana Figueres, the former UN climate chief, have labelled the Trump election win ‘a major blow against global climate action’.

It was US pressure in 2021 that was crucial in the Morrison Liberal-National government’s decision (and also Japan’s) to commit to the net-zero-by-2050 target that now, following Trump’s win, may no longer be in line with US policy.

The pressure opposition leader Peter Dutton is now under is having to decide whether to stick with the Paris Agreement and net zero or support the Trump policy and run the political risk of giving Labor (and the Teals) an emotive climate change election issue at next year’s federal poll. But Labor is sure to make climate an election issue anyway, not only through its attack on the Coalition’s nuclear power proposal, but also by further strengthening its emissions requirements and support for renewable energy. The Climate Change Authority’s Matt Kean responded to the Trump win by asserting Australia must now become ‘aggressive’ in emissions reduction to offset any US weakening.

Even before he takes command in January, president-elect Trump has cast a shadow over the current climate talkfest, Cop29, in Baku, Azerbaijan, where Biden’s climate envoy John Podesta is pressing policies that face reversal in a couple of months. On top of all this, The Interpreter claims that Trump, ‘an ardent climate sceptic’, is being pushed by conservative lobbyists to ‘withdraw from the overarching UN Framework Convention on Climate Change in a move which would see the US not only rescind its commitments under Paris, but vacate global climate negotiations altogether’.

Whatever emerges, fossil fuels are on the up. Under the heading ‘Coal Is One of the Biggest Winners from Trump Victory’, Barron’s financial and investment news reported that few industries soared as much as coal after Donald Trump won the presidential election. ‘Some investors think Trump’s election will lead to a coal boom… as his victory could extend the life of coal plants for years, resulting from plans to throw out the Biden administration’s stifling environmental rules’.

And Bloomberg reports that surging demand from artificial intelligence and manufacturing is Trump’s justification for the removal of Biden’s policy of encouraging the closure of units generating electricity from coal; ‘The US needs to be building more of these units, not shutting them down,’ declares Trump. So coal will continue as a major energy source, despite Paris Agreement pledges to reduce its use, with global coal demand even rising two per cent to a record level last year. This was largely because of increased use by China and India,’ with China accounting for two-thirds of global growth in coal-fired power generation capacity, with the prospect of even greater growth this year.

But Trump’s win was not the only recent good election news for Australian producers and users of LNG and coal – and consequently for the price of energy’s impact on? the cost of living. Sacking the Queensland Labor government has brightened the outlook for the local resources industry, particularly coal which had been a prime governmental target. Among other things, Labor’s sizeable defeat demonstrated that coal-bashing was not a vote-winner, particularly in seats covering coal communities where the average swing against Labor was two-thirds higher at a massive 10.9 per cent than in the rest of the state,

Federally, Labor’s uneconomic, socially disruptive and costly anti-emissions and renewable energy schemes (aimed at preventing a claimed impending climate catastrophe) rate well down the list of Australian voters’ concerns, far behind cost-of-living worries, with a recent Redbridge poll finding that 67 per cent of Australian voters list cost of living as their most important issue against only seven per cent for the transition to renewables and climate change, with most expecting the transition to increase their energy costs. And in a warning to the Greens (and the Teals), four times as many Green voters thought reducing their bills was more important than the energy transition.

But the main lesson may be for the Coalition. A clear factor in the Queensland election result was the involvement, both financial and in community activism seeking a better deal for coal, of the newly formed lobby group, Coal Australia. This effectively restores a direct coal voice that was submerged into the Minerals Council of Australia (MCA) more than a decade ago. According to the Australian Financial Review, Coal Australia’s creation in mid-year that was aimed at promoting the contribution of the coal sector to the Australian economy and advocating for constructive policy development, arose out of concerns that the MCA cannot provide these needs.

Despite the presence of five major coal companies on the MCA board, it has been notably absent in public defence of coal in the face of its continual denigration, financial isolation and governmental actions to its disadvantage, ever since, seven years ago, BHP (Australia’s biggest coal miner) threatened to withdraw its membership, and even more important, its funding, if MCA continued with its then pro-coal criticism of governmental action on emissions.

Unsurprisingly, BHP, which bows to its ‘progressive’ social licence mantra (and pressure from a noisy minority of activist shareholders), retains its climate purity by not being a member of the new Coal Australia. But most of the major coal miners, both Australian and foreign-owned, are already members or are likely to be. And suppliers, customers and communities are also involved. Also unsurprisingly, this creation of the new coal lobby group has prompted the MCA to rediscover its public support for coal, firstly in CEO Tania Constable’s excellent speech attacking the Albanese government at the MCA’s annual parliamentary dinner (see The Spectator Australia, 21 September) and then in a detailed minerals review outlining how, ‘A mix of generation technologies ranging from renewables and nuclear energy to fossil fuels (coal and gas) combined with carbon capture and storage is needed to deliver a reliable, affordable clean energy future.’ Coal, our plentiful, cheapest and most reliable energy source is at last getting the support it needs if it is to keep Australia’s lights on and industries working.

Author: Michael Baume