Miners are on the back foot in the great emissions debate

09 May 2009Archived News Energetics in the News

PUBLISHED: The Australian - Business Footprints: Special Report Climate Series 2: By Giles Parkinson, Mary Stewart Principal Consultant Strategy, Energetics Pty Ltd says the coalmining industry and its efforts to exploit the coal seam methane gas as an energy source is a fascinating example of an industry that is beginning to regard its role in a different light.

 

THE Australian minerals industry, the coalmining sector in particular, finds itself in the firing line in the debate surrounding the level of greenhouse gas emissions and the measures required to reduce them. The black coal industry has responded by committing $1billion to research carbon capture and storage, a technology that is considered essential to guarantee the coal industry's long-term future as a primary source of energy in a low carbon economy. Money also is being invested in research into new technologies that reduce the level of emissions from existing energy infrastructure, particularly in brown coal.

According to the NSW Minerals Council, the industry contributes directly to greenhouse gas emissions through the use of fuel in vehicle fleets and equipment; the use of explosives; the release of methane from coal seams; and the clearing of trees and vegetation for mine development.

The first response, according to the council, has been to measure and report emissions, and set improvement targets, particularly in energy efficiency. Other initiatives include the capturing of methane and its use as a power source; the reduction of haulage distances through improved mine planning and equipment relocation; the use of solar energy for remote equipment such as lighting and pumps; the upgrading of compressed air and pumping systems, burners and burner controls; and the mass planting of trees and vegetation as part of mine rehabilitation.

According to Mary Stewart, a principal consultant with climate change consultancy Energetics, the coalmining industry and its efforts to exploit the coal seam methane gas as an energy source is a fascinating example of an industry that is beginning to regard its role in a different light.

Methane is easier to capture from underground mining than from open cut operations. But, once it is captured, it has the potential to become an energy source and therefore a potential business proposition rather than a liability.

``That is the really big one and the really interesting one,'' Stewart says. ``The more far-sighted [organisations] are no longer thinking of themselves as just coalminers but as custodians of an energy resource, and methane is another energy source available from a coal seam.''

BHP subsidiary Illawarra Coal estimates that its system of draining methane from its three mines in the southern coalfields of NSW and using this methane to generate energy -- a system it developed more than 10years ago -- saves about three million tonnes of carbon dioxide equivalent a year and provides enough power to meet the needs of 60,000 homes. The energy generated from its Appin and Douglas Park power stations is sold to Integral Energy for distribution on the state electricity grid.

For most other mining extraction industries, the opportunities for emission reductions lie in their energy source for and improvements in their mining activities.

Stewart, who advises many mining companies, says operators are genuinely interested in new energy supply options, and regional grids, using technologies such as geothermal or solar thermal, have been discussed. However, many technologies that have been proposed are too expensive and likely to remain so without a significant carbon price.

There are exceptions where mines are located near an alternative energy resource, such as Lihir Gold's mine on Lihir Island (see accompanying story), and the Beverley uranium mine in South Australia.

Mt Gibson Iron is another considering analternative energy source; it has signed memorandum of understanding with Atlantis Resources Corp to build a pilot 1 megawatt plant powered by tidal energy at its Koolan Island mine off the West Australian coast.

Engineering firm WorleyParsons has said it would like to build a 250MW solar farm to form a regional grid for a collection of mining operations, and solar thermal developers such as Ausra have discussed a similar idea. Many such concepts, however, may not be commercially viable without a strong carbon price or direct government support.

Stewart says energy efficiency and carbon management programs have been running for some time, but even if a mine can find a good business case for a project there is no guarantee that it will be implemented. ``The industry is a bit risk averse. It doesn't like using non-tested technologies, as they can be very difficult to service at remote sites.''

A recent survey by Energetics of companies that participated in the Federal Energy Efficiency Opportunities program found that the mining industry's performance is relatively strong -- compared with other industries -- in the areas of financial management and supply management.

However, the performance of the industry in the areas of understanding of energy management, awareness and training, innovation and the adoption of new technologies and auditing of progress, was found to be inadequate and needed to be addressed throughout the industry.

The recent collapse in commodity prices, however, has sparked a brutal cost-cutting process within many mining organisations that has resulted in many mine closures rather than in efficiency gains. We are not in a subtle management change process at the moment, Stewart says.

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