Scott Morrison’s administration is celebrating rising coal exports and pledging to send a shipment of coal to Ukraine
The Russian invasion of Ukraine continues to send shockwaves through global energy markets – sending the price of oil, gas and coal to near all-time highs – but Australia’s government has done little to hide its glee at the increased earnings set to be gleaned by Australia’s fossil fuel industries.
As North America and Europe look to cut ties, many countries have been scrambling to find replacement supplies of oil, gas, and coal. This has led prices to rise.
Consumers are paying the price for higher energy prices. With petrol prices rising to unprecedented heights, and coal prices rocketing, wholesale electricity futures in Australia have increased by almost 30% since the start of this year. These futures are also back at near-all-time highs.
The disruption caused in Ukraine by the conflict has led to a surge in global coal prices. Some markets have seen prices exceeding US$450 per ton (A$608)).
The price of coal from Newcastle, Australia for March delivery is still above US$330 per ton (A$445). This is a record high. European oil prices remain above US$110 a barrel, prices that have not been seen since 2014.
Much of the Asian gas market is pegged to the oil price, and so the region’s gas prices have followed oil higher.
Someone has to pay for it. That person will be the consumer. Scott Morrison, the Australian prime minister, and his government have welcomed the high price of fossil fuels.
“Total coal exports in the three months to January were $24.27 billion – a staggering 159% increase on the same period a year earlier and 18% above the earnings for the three months to October 2021,” federal resources minister Keith Pitt recently celebrated in a statement.
Australia has even promised to make a coal donation to Ukraine which prime minister Scott Morrison said will “power up their resistance”. However, there are still doubts about when and if it will actually happen.
There had initially been speculation that Australia had simply arranged for additional coal to be sent from a neighbouring country, like Poland, in an arrangement that would mirror those similar to Australia’s provision of arms and humanitarian assistance.
RussiaIt claims that sanctions will prevent it from meeting climate targets
Morrison clarified, however, that the coal would be shipped from Australia to a port in Ukraine.
“It’s our coal. We dug it up. We’ve arranged the ship. We’ve put it on the ship and we’re sending it there to Ukraine to help power up their resistance and to give that encouragement,” Morrison said during a press conference on Sunday.
“We understand that it can power up to about a million homes and this is incredibly important.” The 70,000 tonnes of coal would be enough to fuel a medium-sized coal fired generator for around 3-5 days.
Whitehaven coal spokesmen confirmed that the Australian government will cover the cost of the coal and its delivery. At current prices that would be paying Whitehaven as much as $31 million for the donated coal, using taxpayers’ money.
The government will transfer the delivery of coal from Trafigura to the commodities trading company Trafigura.
“In a very tight global market where demand for our thermal coal remains very high, Whitehaven has managed to secure the extra supplies without impacting existing contracts to other international partners,” Pitt said in a statement.
It’s not clear if or when the delivery of the coal may be made, given Russian warships are patrolling the Black Sea, effectively blocking access to Ukraine’s ports.
Around one-third of Ukraine’s electricity generation was provided by coal-fired power stations before the conflict. Supplies have been tight, with much of the country’s coal mining industry located in the contested Donbas region.
This article was produced by Renew Economy and republished under a content sharing agreement.
Source: Climate Change News