Issues Magazine


By Sally Woollett

Australia’s underground wealth includes coal, oil, gas, metals and groundwater. How do we use them and should we be exploiting them? How safe it is to tap into them and what if we run out? Further afield, mining has implications for one of the world’s major fisheries and for stability in an already fragile country. Find out more in Issues 99.

The month of May saw the CEO of Linc Energy, Peter Bond, dash across Australia in a jet powered by fuel from Linc Energy’s underground coal gasification demonstration plant in Chinchilla, south-west Queensland (p.4). Linc Energy’s business is in underground coal gasification and gas-to-liquids processes, and its aims are cleaner fuel production and power generation.

During UCG, coal is partly oxidised while still underground, and the synthesis gas used as a feedstock for chemicals, liquid fuels or electric power. “Many emerging and developing nations have large coal resources and little indigenous oil reserves. Underground coal gasification offers a potential solution to provide environmentally friendly and economically sustainable energy on a large scale,” says Greg Perkins of Linc Energy.

“The twin drivers of demand for our coal are as a fuel to provide electricity and as a key input for the manufacture of steel needed to deliver first world infrastructure in emerging economies,” says Nikki Williams, Chief Executive of the Australian Coal Association (p.8). She describes the Australian Anti-Coal Movement’s leaked document Stopping the Australian Coal Export Boom as a plan to manipulate legal processes and community opinion in order to damage one of Australia’s largest export industries.

One of the aims of the Anti-Coal Movement is to “change the story of coal from being the backbone of our economy to being a destructive industry that destroys the landscape and communities, corrupts our democracy and threatens the global climate”. The economy and the environment often sit head-to-head. Such opposing stories are not new, and they are not simple.

In Alaska, photographer Carl Johnson sees the same friction fuelling the debate about the proposed Pebble Mine in the Bristol Bay region (p.12). Here, the underground wealth is not coal but copper, gold and molybdenum. Johnson’s visual essay is a powerful portrayal of a place that is rich in natural beauty and habitat, and a land of culture, community and livelihood. This region produces half of the world’s sockeye salmon, with prime salmon habitat downstream of the proposed mine. There are complex interests and no easy answers – more than 70% of the area’s residents oppose the mine, but others are in favour because of the prospect of seasonally stable employment. “Early estimates suggest that the deposit contains as much as 26.5 million ounces of gold and 16.5 billion pounds of copper,” Johnson says.

Mining in Afghanistan has a very different set of challenges. Political instability, lack of infrastructure and the “resource curse” are three significant problems. Jeffrey Reeves, Research Fellow at the Griffith Asia Institute, explains the resource curse (p.20): “For poor states, mineral exports can cause the country’s currency to rise in value [which] can undermine growth in the country’s domestic industry as other products become too expensive to export (and thus too expensive to produce)”. Thus mining can be good in the short term but destabilising further down the track.

Back in Australia, the Mineral Futures Collaboration Cluster at CSIRO has been investigating the sustainability of our mining industry. An outcome of its research, “Vision 2040: Mining, Minerals and Innovation”, outlines the role of governments, communities and the industry necessary for “mining and mineral production [to] contribute positively to a sustainable Australia in 2040” (p.23). National approaches to policy and to mining impacts (such as impacts on communities) are high on the strategy’s “to do” list. Technology is a key part of sustainability, and its development is strongly linked to both the environment and to public perception, with the controversy of “fracking” for coal seam gas being one good example.

Safety is another important element of sustainability. Mining is a risky business even though Australian mining has a very good reputation by international standards. “The way to improve safety performance is to get the involvement of all at the workplace and manage safety rather than just comply with rules (i.e. make people think about their safety and take responsibility),” says David Cliff of the Minerals Industry Safety and Health Centre at the University of Queensland (p.29). Now that the easier improvements have been made, Cliff says, the interaction of multiple systems needs to be tackled. Failures in this area are harder to predict and thus prevent, he says.

Rare earth elements are vital to many of our modern gadgets, and to some “green” technologies too, says Gavin Mudd of Monash University (p.32). With mining problems currently limiting rare earth exports from China, from where 90% of rare earths are sourced globally, it is timely to look at the management of radioactive mining waste, he says. Environmental and public health impacts from a former rare earths refinery in Malaysia that is the proposed destination for a rare earth concentrate from an Australian project “highlights the strong need to be upfront, transparent and thorough on all aspects of rare earth element production, especially the radioactivity inherent in rare earth element ores,” Mudd says.

Despite their name, the rare earths are in good supply. However, the decline of another global commodity, oil, is widely predicted – and very soon. “Governments, communities and investors should be aware of the probability of future oil scarcity. Too many organisations, including superannuation funds, are investing in tunnels, toll roads, airports and the like, which will prove very unwise when oil shortages occur,” warns Bruce Robinson of the Australian Association for the Study of Peak Oil and Gas (p.34). He recommends a number of policy options that could be considered in Australia to reduce our vulnerability. Highly variable estimates of future production rates and prices go some way to explaining the “collective blindness” of decision-makers to peak oil.

What happens after peak oil? Samuel Alexander at the University of Melbourne and Co-director of the Simplicity Institute describes consumerism – an incredibly energy-intensive exercise – as a failed experiment, and sees our reliance on oil as fatal (p.40). High oil prices, Alexander says, “will add crippling costs to the globalised food trade, and this will unleash powerful economic forces that are likely to result in systems of food production and distribution that are much more localised and that use considerably less fertilisers, pesticides and packaging”. This will eventually extend to all commodities, he predicts.

This is just one of many lifestyle impacts Alexander describes. Members of one group, the Voluntary Simplicity Movement, have “downshifted” their levels of consumption and are living something other than a materially acquisitive lifestyle – a lifestyle that Alexander says will become a thing of the past whether we like it or not.

Minerals and fossil fuels are not our only sources of underground wealth. Following a national workshop in April, the National Centre for Groundwater Research and Training (NCGRT) says that injecting excess surface water into underground aquifers could help to secure our water supplies (p.40). Sites for future testing have been identified in Victoria, NSW and Queensland, and the technology is looking more affordable than desalination. “On the face of it, managed aquifer recharge looks tremendously promising, but we need a more detailed understanding of our aquifers, likely environmental impacts and, of course, we need effective rules and rights for injecting and recovering water on a large scale,” says Professor Tony Jakeman of NCGRT and the Australian National University.

The National Helium Reserve, set up in the 1920s to protect stores of the gas for military blimps and, later, rocket technology, is predicted to be empty by 2015, says Colin Scholes of the CO2CRC (p.47). Significant quantities exist underground in the US and elsewhere. However, in a situation similar to that of the rare earths, there are fears of a temporary shortage. New plants are coming online, but their ability to meet escalating demand is uncertain. On the upside, recycling of helium, for example in medical instrumentation such as MRIs, will develop as the commodity becomes costly.