Working Alongside the Great Barrier Reef

22nd Dec 2015

By Michael Roche Chief Executive, Queensland Resources Council

First published in Cornerstone, Volume 3, Issue 4

Coal is a cornerstone of Queensland’s economy and is responsible for more than half the value of the state’s merchandise exports of AU$47 billion in 2014. Despite challenging market conditions, coal exports also reached a new record of 216 million tonnes in 2014—an amount that is on track to be exceeded in 2015.

Directly and indirectly in 2014–15, the coal mining industry generated almost AU$32 billion in economic activity—equivalent to 11% of Queensland’s Gross State Product, while supporting 183,000 jobs, or around 8% of its workforce. It also contributed AU$1.6 billion to the Queensland budget in royalties.

The 60,000-km2 Bowen Basin in central Queensland is the jewel in the state’s resource crown, containing much of its known Permian coal resources, including virtually all of the known mineable prime metallurgical coal. 

Including other exports such as beef, sugar, timber, metals, and fertilizer, northern Queensland exports goods worth AU$40 billion each year. This amount excludes the emerging coal-seam gas to LNG industry, which shipped its first consignment from Gladstone in December 2014. 

Queensland’s exporting industries have a long history and must continue to work responsibly alongside one of Australia’s, and the world’s, most important natural sites: the Great Barrier Reef (GBR). The GBR takes up an area of about 350,000 km2 , and is the world’s most extensive coral reef ecosystem boasting one of the most complex and biodiverse natural ecosystems on earth.1 In addition to the natural beauty, the GBR contributes economically to Queensland—about AU$5.4 billion to the state’s economy each year—based on the two million people that visit the site annually, although tourism is limited to a relatively small area (about 7% of the reef).

The exporting industries, including the coal industry, can and will continue their legacy of working responsibly alongside the GBR. 

A brief history of Queensland’s coal exports and the GBR

Forty years ago, the Australian government placed 348,000 km2 of the Coral Sea into the GBR Marine Park and created the Great Barrier Reef Marine Park Authority to manage the area. It simultaneously recognized the essential role of 11 trading ports along 2300 km of coastline adjacent to the marine park, including two coal export ports: Gladstone and Hay Point.

The GBR’s inscription on the World Heritage Register in 1981 for its “outstanding universal value” included the port precincts, which gave UNESCO an interest in both the marine park administered by the Australian government and the ports mostly owned and operated by the Queensland state government. Although World Heritage Sites are internationally recognized for their value to humanity, the management and protection of such sites remains the responsibility of the nation in which the sites occur. Australia and Queensland have long recognized that the GBR could be protected simultaneously with a vibrant export industry.

Thus, even after GBR was named a World Heritage Site careful expansion of exports occurred. In 1984, Abbot Point terminal became Queensland’s third coal export facility adjacent to the GBR and the additional capacity helped expand coal exports.

The coal export facilities have confirmed Queensland’s position as the world’s largest seaborne exporter of metallurgical coals, which is an essential ingredient for producing blast furnace steel. From Gladstone, which services the southern end of the Bowen Basin, to Abbot Point in the north, is a distance of some 650 km. The contact with GBR is limited as that is less than one third of the distance the Queensland coastline adjoins the GBR Marine Park. In the south of the state, highvolatile thermal coals from the Clarence-Moreton and Surat basins are exported through the Port of Brisbane. To the west of the Bowen Basin lies the undeveloped Galilee Basin, boasting high-quality thermal coal resources estimated in the tens of billions of tonnes.

A record of responsible exporting

Queensland’s industries, including the coal industry, have been successfully exporting goods from eastern shores for decades and have a long history of balancing environmental protection— especially along the precious GBR—with a vibrant export-based economy able to respond to international commodity demand.

The ability to balance protection of the GBR and a healthy export industry is founded on the fact that Australia is a world leader in shipping management. The country’s innovation has been recognized by the International Maritime Organisation’s adoption of a mandatory reporting system which was developed in Australia specifically to protect the GBR Marine Park. This world-class system covers the park and extends into the Coral Sea. REEFVTS (Vessel Tracking Service) operates around the clock, supported by automated position reporting, ship identification, and other advanced support tools. Compulsory marine pilot areas—where specifically licensed pilotage is required—also apply in sections of the reef. Despite a substantial increase in ship movements since 1996, groundings have been reduced from one per year to just a single incident in the 10 years since REEFVTS was introduced. 

Despite a record of excellence and improving protection of the GBR, there have been challenges, which led to UNESCO’s World Heritage Committee (WHC) considering whether to list the GBR as “in danger”, which would have dramatically restricted the state’s ability to grow its exports. Fortunately, on 1 July 2015, in a unanimous decision the WHC opted not to place the GBR on its “in danger” sites list and instead to accept a resolution to support Australia’s Reef 2050 Long Term Sustainability Plan (Reef 2050 Plan). This outcome was welcomed by the Australian and Queensland governments.

The potential for growth

In 2011 a Deloitte study commissioned by the QRC revealed plans for Queensland resources projects worth AU$142 billion over the following decade, much of which would be destined for exports. There was never a possibility that all proposed projects would move forward, but AU$70 billion was ultimately committed to the development of an export LNG industry at Gladstone, underpinned by the discovery of more than 42,000 petajoules of methane in the Surat and Bowen Basin coal seams.

Also responding to an unprecedented surge in demand for minerals and energy from Asia, Queensland coal miners announced greenfield, brownfield, and export supply chain enhancements, including port expansions. The prospect of opening the Galilee Basin created huge international interest, especially from Indian companies focused on securing longterm supplies of high-quality thermal coal.

The interest from the Indian companies was not surprising. Around 300 million people in India do not have any access to electricity. Many of those that have access are unable to rely on its availability, partly due to a lack of coal to fuel their power plants. The aim of Indian developers, such as Adani and GVK Resources, is to source high-quality Galilee Basin coal. In India, this coal can be used to reduce emissions and provide quality of life improvements that can be taken for granted in the developed world. 

The proposed development of the Galilee Basin, coupled with forecast coal and gas production expansions, galvanized Australian environmental activists into convening what was described as an “anti-coal convergence” in late 2011. In March 2012, a funding strategy document formulated at the gathering was leaked to the media and signaled the start of a campaign to have the GBR declared “in danger” by UNESCO, thus preventing the expansion.

An unfounded campaign to halt progress

The funding strategy document created around the GBR case, called “Stopping the Australian Coal Export Boom”, continues to serve as the play book for activists. “We urgently need to build the anti-coal movement and mobilise off the back of the community backlash to coal-seam gas. If we fail to act decisively over the next two years, it will be too late to have any chance of stopping almost all of the key infrastructure projects and most of the mega-mines,” it begins. 

The strategy identifies the potential of the GBR to be used as political leverage against the expansion of the coal and gas industries in Queensland and, specifically, the opening up of the state’s fourth major coal province—the Galilee Basin. The activists noted Queensland’s major coal ports are “…next to the World Heritage-listed Great Barrier Reef Marine Park and there are strong opportunities for alliance building with scientists and industries that will be negatively impacted (fishing, tourism, etc.)”.

The campaign scored its first victory when a UNESCO Reactive Monitoring Mission visited Queensland in 2012, assigned to investigate unfounded claims that Australia had given the green light to oil and gas production in the marine park and the dredging of channels through it. It also became evident as inquiries continued that UNESCO had not been made fully aware of the environmental approvals process required for major developments in Queensland.

This campaign made several unsubstantiated claims, such as one from Greenpeace that coal exports alone would reach almost one billion tonnes by 2020, transported annually in more than 10,000 coal ships. However, such claims are not supported by the numbers. In 2014, Queensland’s record export of 216 million tonnes continued a long-term growth trend of around 5% per year. Continuation of that growth trend would see Queensland coal exports at around 280 million tonnes by 2020, massively shy of Greenpeace’s predicted one billion tonnes. As for the number of coal ships calling at coal ports in Queensland, the latest forecast from the Australian Maritime Safety Authority is for just under 2500 coal ships by 2020, or seven ships a day. Currently on any given day, around 40–50 commercial ships carrying various bulk commodities are traveling in the GBR zone. In comparison a ship arrives or leaves the Port of Singapore every two to three minutes.

The campaign also grossly exaggerated shipping numbers to portray the inevitability of a reef grounding and also to exaggerate the requirement and impact of port dredging. In reality, a modest dredging program involving the relocation to land of 1.1 million tonnes of sediment would be required at Abbot Point to support Adani Mining’s Carmichael project in the Galilee Basin. To put this into perspective, CSIRO, the world renowned Australian science organization, estimated that in an average year, up to 17 million tonnes of sediment, nutrients, and agricultural chemicals enter the GBR lagoon from 35 river catchments (unrelated in any way to the ports). Notably, the proposed dredging site is 19 and 30 km away from the nearest coral communities. Scientific modeling has found that sediment will be highly localized to the dredging site and will not impact these coral communities.

The GBR does face environmental challenges. In 2013 a Reef Scientific Consensus Statement by 50 of the world’s leading marine scientists concluded: “The overarching consensus is that key GBR ecosystems are showing declining trends in condition due to continuing poor water quality, cumulative impacts of climate change and increasing intensity of extreme events.” While these impacts are concerning for Australia and the world, they should not be confused with any impacts from exports around the GBR. 

Similarly, in its 2014 Outlook Report, the GBR Marine Park Authority said that the greatest risks to the GBR are climate change, poor water quality from land-based runoff, impacts from coastal development, and some remaining impacts of fishing. The report went on to say that the effects of port activities are relatively more localized than the broad-scale impacts from land-based runoff. A recent report card focused on improving water quality around the GBR emphasized the “need to accelerate the rate of change and drive innovation” in the agriculture industry to protect GBR water quality, while the exports industry was not even mentioned.

The way forward

Australian governments have heeded the views of the WHC in developing a positive long-term response to their concerns, including a ban on marine disposal in the GBR of capital dredging material (material removed for port expansions). This again raises the bar for shipping management in the GBR. QRC believes that over time the ban will inevitably mean that some necessary port developments to keep pace with trade growth will not proceed or will have to be scaled back.

QRC is grateful that the WHC based its decision on the resounding scientific consensus and resisted the call from environmentalists to declare the GBR world heritage “in danger”. Although campaigns to halt expansion will continue, it is important to consider the benefits to Queensland, Australia, and the world—including the poor in developing Asia who are in need of reliable energy. 

QRC is committed to ensuring the protection of the GBR through the rigorous and comprehensive implementation of the Reef 2050 Plan. That commitment has been recognized by the Australian and Queensland governments in QRC’s appointment to the multi-stakeholder Reef 2050 Advisory Committee, which is chaired by the Honorable Penelope Wensley, former Governor of Queensland and former senior diplomat. Queensland’s coal industry looks forward to continuing its role as the state’s leading exporter while working responsibly alongside one of the world’s natural treasures, the Great Barrier Reef. 

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