The Case Against

THE FELTON CLEAN COAL DEMONSTRATION PROJECT
THE CASE AGAINST

Compiled and Submitted by the Friends of Felton

To the TOOWOOMBA REGIONAL COUNCIL April 2008


Summary

The so-called Felton Clean Coal Demonstration Project (hereafter referred to as the Felton Coal Project) is a Stage 1 development proposal being advocated by Ambre Energy Pty Ltd for a site at Felton, 30 km south west of Toowoomba.

The Friends of Felton is a representative group of concerned residents and citizens, totally opposed to the development. The grounds for the Group’s opposition are simple and include the following:

Large scale coal mining is totally out of character with the social and cultural history of the Felton district.

The Felton area is characterised by intensive, diverse and sustainable farming with some family names having persisted in the district for a hundred years.

Governments have a major role to play in weaning Australia off its dependency on coal for energy production. They can do this by vesting ownership of the licensing role with local communities that have to suffer the externalities associated with mining. With such a condition in place, miners would have to convince those directly affected that their mining operations would make the local community better off.

Despite all the claims, coal is not and cannot become a ‘clean’ industry in either relative or absolute terms. Indeed it remains dirty and dangerous and should be minimised as a source of energy so that other, cleaner forms of energy get the chance to emerge and flourish (see references at the end of this submission).

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Introduction

The Felton Coal Project is being proposed as Stage 1 of a two stage project. Progression to Stage 2 would be dependent on ‘successful’ completion of Stage 1. While opposed to any stage, the Friends of Felton are insistent that no concessions are granted to make progression to Stage 1 somehow easier than if the project was not staged. In other words, the conditions applying to both stages should be tied and immutable. If the project proceeds to Stage 2 as planned, would extract 24 million tonnes of coal per year making it one of the largest in Queensland and four times that of the New Acland mine near Oakey. The planned size of the mine is a major concern for Felton residents as it infers environmental and infrastructure impacts of a proportional magnitude. For a rural area, Felton is densely settled so many people would find themselves adversely affected by the mining related externalities, at and around the site. The affected country (approximately 2,500 hectares) lies in the floor of the Felton Valley and currently supports a fully sustainable agricultural system comprising fertile soils, an uncontaminated and reliable water supply, specialised capital, technical know-how, cultural history and strong social networks. The proposition is to sacrifice this system, with its capacity to provide food and bio-mass in perpetuity, for a high-emissions coal mine that will last for less than 40 years, and compromise any return to productive agriculture postmining.

Under Australian law, the land owner’s usage rights do not automatically extend to mining materials that might lie beneath the surface. Thus ‘someone else’ can acquire mining rights to explore for and take materials buried below land that is the home and means of livelihood of a landholder. This situation is demonstratively unfair and has an in-built capacity for conflict. One of the few defences available to the landholder is the necessity for development proposals (such as mine development) to submit to an Environmental Impact Study (EIS). The EIS must be submitted to pertinent government agencies for approval and the approval itself is based on a demonstrated capacity to comply with a wide range of social, environmental and economic conditions or standards. For an EIS to comply it must satisfy the terms of reference issued in relation to a particular development proposal and these must reference all local, state and federal legislation relevant to a development proposal. Implicit in the term of reference is acceptance of the development proposal by those most affected – the existing residents. The Friends of Felton are not calling for a cessation to coal mining throughout Queensland. We appreciate that mining can benefit an area if it results in stronger demand for core factors of production (such as labour, land, water, etc) without demonstratively damaging the local environment and quality of life. At Felton, however, there is almost universal opposition to the entry and operation of mining. The district is highly viable the way it is – land values are strong (reflecting the productivity of the soils, the intensity of local agriculture and proximity to Toowoomba) and demand for all other factors of production, including labour, is also high. Moreover, the region is highly dependent on ground water and has no surplus supply capacity. In short, the Felton Coal Project cannot offer the local area any positives – only large, harmful and ugly negatives.


Loss of prime agricultural land

The Initial Advice Statement issued by Ambre Energy portends a very large open cut mining operation that would destroy all the natural and agricultural systems currently existing on the land surface. We contend that the prevailing system, incorporating high natural, commercial and social values, has far greater importance to the long term wellbeing of the nation than does this particular coal mine. In aggregate terms, Australia has very little ‘good quality agricultural land’ and yet the area nominated by Ambre Energy for destruction is amongst the very best in the nation. It is widely acknowledged that after open cut mining, the soil’s original capacity can never be restored given changes in soil structure leading to impaired water infiltration and potential for plant growth. The Friends of Felton believe it is unconscionable that a mining company can use its inherent advantages (possessed by virtue of large-scale, an aggressive coal industry lobby and Australian law) to overwhelm the best interests of climate change mitigation, the natural environment and the preferences of the local community. Accordingly we are placing heavy reliance on the comprehensive system of checks and balances, embedded in the EIS process, to expose all the risks and threats associated with the Ambre proposal. Also, we place particular reliance on the sovereignty of the Toowoomba Regional Council, which exists to uphold the express preferences of its constituency.


Greenhouse Gas Emissions

Australia has now ratified the Kyoto Protocol (for cutting greenhouse gases) and the government has already pledged to cut the nation’s greenhouse gas emissions by 60% by 2050. The recent Garnaut Report said if Australia wants to be serious about saving the planet the reduction target should be up to 90%. Clearly it is time for the nation’s decision makers (at all levels) to draw a line in the sand. This means saying ‘no’ to coal mining proposals that are socially unacceptable because they are not welcome by the local community and because more coal will act to forestall the entry of more environmentally friendly modes of energy generation. It is not as if alternative modes do not exist – SE Queensland has abundant supplies of coal seam gas with Greenhouse Gas emission rates significantly below those for conventional oil production and refining.


Why ‘Clean Coal Demonstration’ at Felton?

Ambre is attempting to fast-track approval of their project by labelling it a ‘demonstration’ and by claiming it will produce the ‘perfect alternative fuel’. The fuel they are referring to is di-methyl ether (or DME) which is made from syngas derived from coal. In a recent press release, Ambre say that DME has only one downside of note viz, it still generates CO2 when combusted in a motor. In fact it has another downside in the form of massive pollution of the site at which the DME is actually produced – in this case the Felton Valley. To assist its case, Ambre might also claim to demonstrate coal CO2 sequestration (CCS). Our information is that the prospects for CO2 sequestration are less than remote before 2030. In any event, there are existing power stations better positioned to trial carbon sequestration and there are Cooperation Research Centres already working on all sorts of coal pollution mitigation. There is no obvious need for a coal mine at Felton to be demonstrating cutting edge technology – if indeed there are any prospects – and the Friends of Felton insist mining should not be allowed to proceed unless a cast iron guarantee can be given that all CO2 would be captured and then permanently and safely sequestered.


Effect on Surface and Underground Water

Stage 2 would need about 5,000 ML per annum of water for coal washing and related purposes. Since there is very little local water the project could acquire, it would have to ‘import’ its needs from other mines, or other waste water sources, located up to 100 km from the nominated site. Ambre’s Initial Advice Statement refers to piping coal seam methane water from the Dalby gas fields. This water is known to be salty and contaminated with other minerals. Use of this water at Felton would pollute the soils and headwaters of the Condamine – an important feeder for the Murray Darling Basin. The EIS must investigate the viability of accessing water from remote sources and should demonstrate no material impacts on downstream communities or to the natural environment associated with run-off. The proponent plans to build a levee bank on the western side of the Hodgson Creek to protect the mine and infrastructure from flooding and to collect runoff water for use by The Felton Coal Project. It also plans to build a large 10,000ML water storage dam. The building of these structures, which would be forbidden for agricultural purposes under the current moratorium, is likely to disrupt the hydrology of the local catchment leading to greatly increased flooding upstream of the project site. Recent flooding of mine sites in Central Queensland highlights the risk of contaminated water escaping into river systems. The EIS should also consider supply and quality threats to local groundwater since adjoining farms are highly dependent on this source for stock and domestic and for irrigation. Given the inter-connective nature of groundwater resources in the region, contamination and drawdown are real and significant threats to the water security.


Effect on rare and endangered species

The project would place at risk populations of a number of nationally and state-listed endangered native species and remnants of listed ecological communities either known to be or likely to be present in the Felton Valley. These include two ‘Endangered’ ecosystems, three ‘Endangered’ species and six ‘Vulnerable’ species which are listed under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999, and a further 22 locally-occurring species listed under the Queensland Nature Conservation Act 1992 as rare and threatened (see attached). We are advised that a further six species within the region are currently under review or of uncertain status, including Cymbonotus maideni, Picris barbarorum, Sophora fraseri, Teucrium argutum var. incisum, Senecio daltoni and Tephrosia bidwilli. The EIS must address the lack of comprehensive records for the area and must investigate both the direct and cumulative impact of this development and its associated infrastructure on at risk species and ecological communities, both locally and within the broader context of biodiversity protection.


Effect on Mt Kent Observatory

Mt Kent Observatory (MKO) is located on the eastern side of the Felton Valley, and is a joint facility involving the University of Southern Queensland (USQ), The University of Queensland, and more recently the University of Louisville, Kentucky, US, with whom USQ has a legal contract to provide remote access as part of a NASA-funded project. In addition to its operation as a research and teaching facility, MKO plans to offer live remote observing program for sick children in hospitals worldwide during 2009, the IAU/UNESCO "International Year of Astronomy". MKO is an officially designated dark-sky observatory (D02-5: Astronomical Society of Australia), and clean air and an absence of light pollution are crucial to its effective operation. There are concerns that the Felton Coal Project may represent a significant risk to exposed glass surfaces or coated mirrors and electronics, and may significantly compromise viewing due to light pollution, dust, air-borne particulates and chemical compounds.


Learning from Experiences

A previous foray into ‘synthetic oil’ production, inland from Gladstone, was a dismal failure and ended up costing the state government and the local community millions. The Stuart Oil Shale Project ceased operating less than ten years ago and took with it the YarwunTarginnie horticultural industry – comprising at its peak more than 170 households. For Stage 2 of the Stuart Oil Shale Project, an Economic Impact Study was commissioned as part of a larger Environmental Impact Study. The economic study was undertaken by the Canberra based consultancy ACIL (1999) and concluded that Stage 2 would generate regional benefits by expanding employment and would not adversely affect local agriculture. History has shown the ACIL assessment to be totally wrong. Even when it was operating, the Stuart Oil Shale Project was a small-scale employer and the Queensland government was eventually obliged to buy-out some local farmers. A study by Alliance Resource Economics in 2001 found that non-viable Yarwun-Targinnie farmers had become trapped in the area due to a total collapse in the rural land market. This collapse was brought about by high uncertainty regarding the sustainability of local agriculture following gradual industrialisation of the region culminating in entry of the oil shale mining and processing project.

Several lessons came out of the now defunct Stuart Oil Shale Project. The first is the capacity for uncontrolled externalities (such as dust, noise, vibration, odour and heavy traffic) to damage the productivity of adjoining rural industries, adversely affect the health and lifestyles of neighbours, raise road maintenance costs, increase the risk of traffic accidents and give rise to uncertainty that flows through to market confidence and land values. These are also the experiences of a number of Queensland local councils, as reported in a recent media release from the LGAQ (attached). Another lesson is the cost to investors and taxpayers when unproven technologies fail – either financially or because they eventually fall outside environmental standards. When this happens, both the investment and the associated resources become stranded leaving other parties (e.g. the local council and community) to ‘pick up the bill’. If Ambre were allowed to proceed but subsequently failed, the Felton community would be left with a scarred landscape, drained aquifers, a ruined creek and industrial skeletons. Given that DME production has no commercial track-record, the threats implicit in failure should be top-of-mind when the terms of reference are being developed for The Felton Coal Project EIS.


Economics

Assuming that the Felton Coal Project does not attract any public funding, the economic viability of the project is strictly a matter for the proponent. There will, however, still be economic impacts that the EIS must take into account. Most importantly, the study will have to allow for the opportunity losses associated with foregoing the income stream that is currently generated by crops and livestock on the affected area. This income stream will apply in perpetuity and it cannot be assumed that the stream will suddenly re-commence once the mining has finished and gone away. Thus current land prices (at which incumbent landholders would be bought out) might not fully reflect the opportunity losses going forward.


Loss of scenic amenity and reputation

The Felton Valley is currently distinguished by its unity, space, beauty, cleanliness and tranquillity. These qualities are part of our cultural heritage and the reputation of the Darling Downs. At times in the past, these values have been blithely dismissed in the name of ‘progress’. While communities have been struggling for years to express their wish that these and other natural values be preserved, our decision makers have been slow to ‘read the signs’ and to consciously pursue alternatives for satisfying the material necessities of life.


The Friends of Felton are under the impression that the EIS process of years past was a mere rubber stamp. We would like to think that those performed in 2008 or thereafter would be demonstratively rigorous, objective and independent. A point of difference we consider most relevant to future outcomes is the role of local government. By definition, local government is positioned to sense the core concerns of its constituency and rule accordingly. On this basis we wish to leave no room for doubt – the Felton community is implacably opposed to any proposal to mine coal in the Felton Valley. We believe this stance goes beyond our immediate interests – it also accounts for the interests of the wider community and the nation.


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References

ACIL (1999) Economic Impacts of Stage 2 of the Stuart Oil Shale Project, Canberra. Alliance Resource Economics (2001) Economic Future of the Yarwun-Targinnie Horticultural, Pastoral and Allied Industries, Brisbane .
Ambre Energy Ltd (2008) Felton Hybrid Energy Project: Initial Advice Statement .
Diesendorf, M. 2006 Can geosequestration save the coal industry? in J Byrne, Leigh Glover and Noah Toly (eds) Transferring Power as a Social Project Vol 9 Energy and Environmental Policy Series.
LGAQ media release 31 August 2007 “Mining Boom a Bust for Local Councils” http://www.lgaq.asn.au/LGOnline/includes/printthispage.jsp?path=/lg aq/newsReleases/2007/miningsoured.html&banner=1&circular=0&publishD ate=


News Release - Mining Boom a Bust for Local Councils

The resources boom has soured for Queensland’s rural and regional councils facing higher infrastructure costs, less economic benefits than in previous booms and widespread community disruption, delegates to the Local Government Association of Queensland’s 111th annual conferences at the Gold Coast heard today. Mayors and councilors from several towns in mining areas warned that high expectations of economic boom times had been replaced by disquiet and disapproval as 12-hour shifts worked over four consecutive days, fly-in, fly-out employment or variations such as drive in or bus in and out meant that communities were left with costs but no benefits. Road safety impacts were becoming horrific as miners who worked long shifts got into their cars to race back to families living elsewhere because there was no family accommodation available in towns near the mines. Despite the lack of housing, people should be cautious about investing in accommodation in expectation of high returns. “They need to realise how unsustainable mining towns are when there is a downturn,” Gladstone City Council’s director of commercial and community services, Cale Dendle, said. He urged councils to engage early with mining companies: “In small communities, people know when strangers are in town punching holes in the ground and then the rumour mill starts.” He said companies were not obliged to talk to councils or the community and often did not want to. It was up to councils to monitor licenses to prospect and mining approvals issued by the state and to let their communities know what was happening and get involved as soon as possible so that issues like housing, education, and economic imposts were built into the terms of reference for the EIS process. Several mayors also voiced concerns that mines producing under $2 million tonnes are not required to lodge an EIS. “We’ve been told in these cases local people can tell from the beginning, just by looking at the equipment coming in, that companies intend to ramp up production once approvals are in place,” Mr Dendle said. However he said while councils had little power in regard to the terms of impact statements and none on mine approval processes, they could use rates as a resource to pay for additional infrastructure costs for water, roads, sewerage and other services. A study on behalf of Bowen Basin mayors has proposed differential rating systems based on the numbers of people working on the mine site and rates paid on other commercial and industrial properties with similar numbers of employees. They could also consider special rates for use of council roads. ENDS. Local Government Association of Queensland LGAQ House, 25 Evelyn Street, Newstead Qld 4006 Contact Phone Fax Mobile Email Cr Paul Bell AM, President, LGAQ 3000 2222 3252 4473 0418 791 596 president@lgaq.asn.au 9