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Australia - July 16

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Many more articles are available through the Energy Bulletin homepage


Australia faces food crisis as rivers reach new low

Kathy Marks, The Independent
The drought in Australia's main food bowl, the Murray-Darling Basin, has worsened, with record low inflows into the river system in June and an even gloomier situation predicted for the coming months.

Neil Plummer, acting head of the National Climate Centre, described rainfall during the southern hemisphere autumn as "an absolute shocker", and said: "I'm gasping for good news". Wendy Craik, chief executive of the Murray-Darling Basin Commission, said the river system's condition was "critical... tending towards flatlining". She added: "We have got it on life support."

The basin, which straddles four states and is the size of France and Germany combined, produces 41 per cent of Australia's fruit, vegetables and grain.

Agricultural products worth more than £10bn are exported from the region annually to Asia and the Middle East.
(11 July 2008)



A gas supply disruption case study - the Varanus Island explosion

Big Gav, Peak Energy
An explosion at Apache's Varanus Island gas plant in Western Australia on June 3 cut off 30 per cent of the state's domestic gas supply. Supplies to mines and industry in the Pilbara region (the heartland of Australian iron ore mining) fell by 45 per cent.

The supply disruption was exacerbated by an inability to start alternative forms of power generation - the coal fired Collie power station, for example, had damaged turbine blades and could not immediately return to service.

This has had a large impact on the local economy (the WA Chamber of Commerce and Industry estimates the crisis will have cost the state $6.7 billion, assuming energy supplies are fully restored by December) and makes an interesting case study of the effects of a sudden reduction in energy supplies.

... The situation has been exacerbated by the lack of any contingency plans for a disaster, in spite of police warnings that these were needed and highlighting potential weaknesses at the facility. The company reportedly responded to one of the issues raised - the need to have spare parts available - by asking "How can we justify having a $8 million component sitting on the shelf ?".

... Gas supplies to mines and industry in the Pilbara region have fallen 45 per cent, those to the Goldfields have fallen by 20 per cent and the state's southwest, where most of the population lives, has seen a 20 per cent reduction for large industries and commerce, and a further 25 per cent drop for mid-sized businesses.

As a large swathe of business has been affected, almost every industry sector has been vocally complaining about how much suffering it is enduring and how much special assistance or priority access to energy supplies it needs.

... Summary:
Overall, the reaction to the incident has been less than inspiring, with the response largely being to switch back to the dirty and depleting alternatives of coal and diesel. No real thought seems to have been given to ways of making the state's energy supplies more resilient in future, or to the fact that diesel is getting increasingly expensive and will likely to be much harder to obtain in future years.

A better response would have been to instead begin planning to embed more distributed generation, along with smarter demand management, into the grid from a variety of sources. Given that WA has high quality solar resources, particularly in the north west where they are world class, and a vast amount of space for wind and wave power generation, I would hope that efforts are undertaken to start substituting (or at least supplementing) both coal and gas fired generators with alternatives that don't depend on the continued extraction of finite resources.

The most useful action taking during the crisis I've seen so far was Alcoa (the largest single user of gas) deciding to push ahead with WA's first "tight gas" development - the Warro gas field in the state's mid-west. Managing Director Alan Cransberg said that if it proves to be commercially viable it could supply up to 10 per cent of domestic gas demand - but denied the Varanus Island prompted the decision, instead pointing to the tight gas supply situation that already existed beforehand.
(11 July 2008)


Australia considers first new coal port in 25 years

Rob Taylor and Fayen Wong, Reuters
Australia's Queensland state is considering new coal mines and the country's first new export terminal in 25 years, investments that could increase shipments from the world's largest exporter of the commodity by 40 percent.

But the announcement has drawn fire on the eve of a report on emissions trading as Australia, the world's largest greenhouse gas emitter per person, looks to lead Asia on carbon trading.

Australia has benefitted hugely from a near-trebling of prices in just a year caused by surging Asian demand but also shipping bottlenecks at home, with supply tightness not seen easing for at least four years.

The Premier of Queensland state, Anna Bligh, said on Tuesday she was looking at a "trifecta" of options for new coal developments in the tropical state, including three new coal projects that could boost output by 75 million tonnes a year and a coal port with a capacity of up to 100 million tonnes.
Contributor's comment - Not content with being ranked as the largest emitter of greenhouse gases on a per-capita basis, Australia is planning to augment considerably its coal export capacity.
(15 July 2008)

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