The Group of Seven’s ultimately unremarkable commitment to phase out fossil fuels over the next 85 years only partially reveals the dynamics of commercial self-interest and tactical first-world politics that have successfully driven a wedge between big petroleum and diminishing coal.
The idea that gas sits as a transition fossil fuel that will smooth the world’s embrace of a low carbon future has long been part of the seaborne gas industry’s pitch for long-term relevance. But it is a view that now clearly distinguishes the drillers from the miners in the debate over how the world should manage its carbon dioxide problem.
Pretty plainly, folks like Woodside chief executive Peter Coleman are saying that the gas industry has been weak-kneed about differentiating nice clean gas from its dirty cousin in carbon, thermal coal.
Coleman’s pitch to the World Gas Conference in Paris last week was strident, almost convincing and very certainly crowd pleasing. Nuclear-fuelled Paris, you see, sits at the epicentre of the rapidly shifting tectonics of coal.
France is making a rapid exit from the coal cycle. The national mood was captured two weeks ago with its global insurer Axa announcing disinvestment from coal, in a decision that triggered considered regional discussion about the future legal liability attached to the production and use of a commodity that is a major contributor to climate change.
The underlying proposition there is that thermal coal mining is analogous to big tobacco. The miners know it is bad, they know it is the single biggest contributor to anthropomorphic climate change but they keep selling it.
Now, I am pretty sure that is not the path Coleman wants the gas drillers to walk more aggressively. Nonetheless, his pitch is that coal is dirty, gas is not and all this chatter about making coal somehow cleaner is encouraging inappropriate investment decisions.
Coleman’s shift to an openly divisive stance on coal reflects the medium-term risk unrestrained coal might pose to his very long-term gas business.
For the rest of this article, click here: http://www.afr.com/business/mining/coal/bhp-billitons-andrew-mackenzie-defends-coal-in-battle-with-gas-20150609-ghju33