Contenders for the title included the controversial decision of the New South Wales government to mop up the mess created by dirty deals in coal tenements, the strong performance of BHP Billiton’s coal division, and the failure of anyone to mention coal in a heated debate about Australia’s recent heat-wave.
The last point will need a bit of clarifying because it is hard to imagine the lack of publicity being a high point for anything.
However, as will be explained, the fact that an intense, name-calling, furore broke out over the relative merits of solar, wind and gas to power air-conditioning systems during a record-breaking heat wave was a significant win for coal.
Before getting to the power-source debate it is important to say a few words about BHP Billiton’s half-year production report and the NSW tenements shemozzle.
At BHP Billiton there was a remarkably solid increase in production of both metallurgical and thermal coal in the six months to December 31.
Metallurgical coal output totalled 21.7 million tonnes, a 30% increase on the previous corresponding period. Energy coal output was down by 5%.
BHP Billiton chief executive, Andrew Mackenzie, described the performance of the coal division as excellent.
“Our productivity continues to improve and this was most clearly demonstrated by our Queensland coal business, which ran at an annualised rate of 68 million tonnes in the December quarter,” Mackenzie said.
“Our productivity agenda is in full swing and we expect to carry strong momentum into the second half of the financial year.”
Translated by The Hog what Mackenzie is trying to say is BHP Billiton is not only producing more coal it is doing so with fewer employees at a lower cost and that means the business has become much more competitive on world markets.
In time, a lower unit cost of producing a tonne of coal will flow back into revitalised mine expansion plans and while even making that prediction is premature there is no doubt that lowering costs and raising productivity is precisely what the Australian coal sector needs to get back on a growth path.
In Sydney, the coal news was a little less satisfying but important nevertheless because a decision by NSW Premier Barry O’Farrell to cancel coal exploration licences allegedly issued corruptly will go some way to cleaning up the tarnished image of the industry in that state.
For shareholders of the company’s losing the licences, Cascade Coal and NuCoal Resources the cancellations where a hammer blow with ASX-listed NuCoal watching its shares plummet by 72% from Friday’s peak of 9c to trades around 2.5c.
NuCoal management, naturally, said it would appeal to the highest courts possible to regain the tenements, and would even consider an appeal under the Australian Constitution.
Whether NuCoal can win, or even if it does how long the legal process might take, are anybody’s guess whereas the message sent by O’Farrell is a powerful one: if mineral licences are issued corruptly they will be cancelled.
Important as the BHP Billiton production report might be, along with the decision to strip NuCoal and Cascade are of their coal exploration licences, the more interesting news was the news that never happened – the solar/wind no show in Australia’s heat wave.
What occurred, for anyone not up to speed on Australian news, is that much of the southeast of the country suffered a record-breaking burst of heat, which, in turn, triggered a record-breaking draw from air-conditioners.
The really interesting bit is that with the heat came a lack of wind during the day followed by the usual lack of sun during the night with the a big shortfall in the expected rate of electricity production from the top two forms of renewable energy.
Gas, according to gas-industry lobbyists, filled most of the gap left by the poor showing from wind and solar, but the real hero of the crisis was coal, which continued to provide the critically important base-load power to not just power air-conditioners but to provide the power to keep factories operating.
As a wake-up call for Australian governments, industry and households, the failure of wind and solar at a time of system stress could not have been louder.
The Greens might hate coal but they were kept cool by it last week when their champions were exposed as having an enormous flaw in their business credentials.
Coal: 1. Green power: 0. Again!