Why almost all Australian coal ‘needs to stay in the ground’

Australia must leave almost all its coal in the ground, as well as a good chunk of its oil and gas, if the world is to have an even chance of keeping global warming to 1.5C.

That’s according to calculations published in Nature today, which found the lion’s share of fossil fuel reserves worldwide must remain untapped if we’re to stay at the lower end of the target set in the 2015 Paris Agreement on climate change.

Coal requires the biggest drop in production overall — around 90 per cent worldwide by 2050, compared to 60 per cent for oil and gas, according to Dan Welsby, a researcher at University College London’s Institute of Sustainable Resources and co-author of the study.

And Australia is no exception, Mr Welsby added.

“For some … countries in the Pacific region, for example Australia, they have unextractable coal reserves of 95 per cent.”

“Unextractable” reserves are those that must be left in the ground to limit warming.

The study comes days after federal Resources and Water Minister Keith Pitt said Australia has no plans to stop mining and exporting coal “well beyond 2030”.

“Coal consumption throughout Asia is forecast by the International Energy Agency to grow over the next decade to meet the energy demands of countries like China, India and South Korea,” Mr Pitt said in a statement on Monday.

“Australia has an important role to play in meeting that demand.”

Shifting goalposts

About 80 per cent of the world’s energy needs are supplied by burning fossil fuels, with coal releasing more carbon dioxide per unit of energy than oil or gas.

Keeping fossil fuels in the ground has been a mantra in climate change circles for years.

For instance, then-United Nations climate chief Christiana Figueres said in a 2013 speech that most of the world’s coal reserves should not be extracted.

It wasn’t until 2015 that UCL Institute of Sustainable Resources researchers first quantified the proportion of “unextractable” fossil fuels if the world hoped to stay under 2 degrees of warming.

They found 82 per cent of coal, 49 per cent of gas and 33 per cent of oil reserves would need to remain in the ground.

Carbon emissions have since steadily increased (with a fleeting pandemic-related dip) and focus has shifted from 2 degrees of warming to 1.5,  said Will Steffen, a climate researcher with the Australian National University and author of the Climate Council report Unburnable carbon: Why we need to leave fossil fuels in the ground.

The goalposts have shifted, and the newest calculations from UCL, he said, depict a more urgent situation.

“In 2015, they were looking at a 2-degree target. Now, of course, there’s a lot more consensus that 2 degrees is really dangerous,” Professor Steffen said.

For Australia, which relies heavily on mining and exporting coal, the new study’s recommendations are particularly daunting, Professor Steffen said.

“By 2050, we basically have to leave 95 per cent of it in the ground.”

The figure applies to coal reserves — that is, coal in mines that are already operational or being developed, such as Waratah Coal’s proposal in Queensland’s Galilee Basin.

Reserves are a fraction of the nation’s actual coal resources, which is all the coal we know exists from geological surveys.

“The critical calculation we need to do is to find out just how many reserves we have on the books. How many of those are already operating?” Professor Steffen said.

“And if that [adds up to] more than 5 per cent of reserves, then that means absolutely we cannot open up any new ones, including in the Galilee Basin.”

‘Glimmers of hope’

The researchers acknowledge that their calculations paint a “bleak picture”, with no guarantee that the world will stay under 1.5 degrees of warming, even if fossil fuel production is drastically cut.

“We use a carbon budget in our modelling that’s compatible with only a 50 per cent probability of meeting the 1.5C target, which is one of the headline goals of the Paris agreement,” Mr Welsby said.

“And if we want a higher chance of staying below 1.5C, then we have to, of course, keep more carbon in the ground, more fossil fuels in the ground, and therefore there has to be higher rates of decline of production from today.”

Their estimates of “unextractable” fossil fuels are likely to be at the lower end, as they don’t take into account future feedback systems that could release additional carbon into the atmosphere, accelerating warming even further.

For instance, if northern hemisphere permafrost melts, it can release huge quantities of stored methane and other greenhouse gases, which melts more permafrost.

Carbon removal technologies such as carbon capture and storage (CCS) had little effect on the researchers’ calculations.

“The speed of the transition [away from fossil fuels] has to be so rapid … that when you adjust for the role of CCS, it does change things a bit, but not dramatically,” Mr Welsby said.

Indeed, CCS has been implemented to an extent in Australia, such as the Gorgon gas facility in Western Australia, but fell well short of its target.

But there are, Mr Welsby added, “glimmers of hope” as the cost of renewables, such as solar and wind power, continues to drop.

“By no means are we suggesting these are easy reductions, no matter the region in question.

“So, it really is a case of having the political will to resist the temptation of extracting every last bit of fossil fuels … and focusing on really pushing hard on the low-carbon economy.

Professor Steffen sees vast opportunities for Australia to export renewable electricity via undersea cables from northern Australia, or hydrogen generated using solar or wind power.

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“We have enormous renewable opportunities, solar and wind, more than any other OECD country. And we have a potentially huge market on our doorstep, up in South-East and East Asia in particular,” he said.

“And technologically, we can produce massive amounts of electricity using renewables at very low cost, because solar is much, much cheaper than a coal-fired power station, for example.

“The handwriting’s on the wall economically. This is where we’re going globally.”