South32’s application to mine coal under protected ‘special areas’ of Sydney’s water catchment until 2048, is sitting parlously on the desk of the Independent Planning Commission.
Sydney Water remains strongly opposed, projecting ‘unprecedented’ surface cracking and subsidence in the catchment. The Independent Panel on Mining has warned sealing the mine is possibly infeasible – that future generations may inherit water losses for eternity. Scientists have presented evidence that making commercially viable hydrogen green steel is on the horizon.
Yet, the NSW Department of Industry, Planning and Environment’s recommendation to approve is unabashed. The “negligible” risks are dwarfed by an economic catastrophe; thousands will lose their jobs, Port Kembla Steelworks and the Illawarra will become unviable, and the NSW economy will be in jeopardy.
Since two embarrassing court cases in 2013/4, the Department sought to assure the community their position is unadulterated by attaining an “independent” economic assessment.
The Department’s pick of the crop for South32’s expansion and the controversial Narrabri Gas Project was an economist that has snagged the climate change response for over 3 decades…
Dr Brian Fisher.
“the carbon tax and renewable energy target, drive up the cost of electricity…you then create an industry designed to protect the ‘protected species’ that lives in an artificially created industry…but those people are a dead weight loss and they would be much be better employed…enhancing the export of Australian Minerals instead of wasting their time protecting an industry that is imposing more costs on you.” [Fisher, Minerals Week Seminar 2013, ironically talking about renewable energy]
A spokesperson for the Department has confirmed that Fisher, under his business, BAEconomics, was engaged directly by the Department. According to NSW procurement policy, exceptional circumstances would be needed to justify Fisher’s direct engagement.
Despite Fisher’s history of a clearly vested interest in the resources sector, an appearance of a political partisanship, and the rejection of his analysis by the NSW Land and Environment Court, the Department maintains that there is limited availability of appropriately qualified, experienced and independent economists for the job.
A re-Fisher.
As director of ABARE, Fisher’s modelling provided the backbone for Keating and Howard’s anti-Kyoto stance. Fisher predicted the decimation of Australia’s economy, and a small carbon footprint that would quickly be filled by dirtier coal. The integrity of ABARE’s modelling was called into question by the Commonwealth Ombudsman with environmental groups unable to afford a seat on the steering committee, made up of resource industry sponsors, and a false claim regarding a peer review.
131 Australian economists, including 16 professors rejected the modelling for overstating the costs and understating the benefits of reducing carbon emissions. Fisher was frequently reported to state that climate change was a long-term issue, not something to address immediately, but in the second half of the 21st Century.
After leaving ABARE, and taking up consultancy, Fisher has been frequently commissioned by the minerals and mining sector. In 2009, he was commissioned by the Minerals Council to combat Treasury’s modelling which found early global action on climate action was less expensive than late action, which earnt a commission from a Liberal controlled senate inquiry.
He was also commissioned in 2014 by the Minerals Council to put a price benefit on shortening environmental approvals process by cutting Commonwealth oversight.
And who could forget 2019. It was Fisher’s analysis that was brandished in Parliament as proof that Labor’s 45% emissions reduction target would take a “wrecking ball” ‘$144 billion cost’ to the Australian economy by 2030 compared to the Liberals ‘$19 bil smaller’. Fisher emphasised in his paper that Australia cannot positively influence the climate or save the Great Barrier Reef.
Economic Assessments
But Fisher has also emerged as the author of economic assessments for mining applications. Initially, for the companies.
In 2014 he prepared the economic assessment for Rio-Tinto’s Mt Thorley-Warkworth coal pit expansion. The reviewers, Deloite, expressed concern that Fisher’s assessment followed a ‘minimum quality approach’ risking an adverse decision being made.
In 2017, he prepared one for Hume Coal. In 2019, he gave evidence in the Land and Environment Court on the Gloucester’s proposed new coal mine in the Hunter Valley. Fisher argued the project be “net out” by reductions in other sectors such as electricity generation, transport and in carbon sinks. The court rejected this as “speculative” and “hypothetical.” His argument about market substitution was also dismissed as “flawed.”
“From a social standpoint, local benefits such as direct and indirect employment associated with the construction and ongoing operation of the Project also need to be taken into account and weighed against the uncertain long-term impacts of carbon emissions produced by the mine.” – Fisher’s evidence, Gloucester Resources, 2019.
In 2019, he authored the Department’s economic review of Santos’ Narrabri Gas Project. The Australia Institute and the Institute for Energy Economics and Financial Analysis flagged a $1.6 billion discrepancy between the project’s value according to Santos’ financial accounts. Fisher dismissed these concerns as irrelevant to the project’s future value.
According to Fisher’s economic review of South32’s Dendrobium expansion, if Dendrobium doesn’t expand from 2030 to 2048, this will make South32’s other mine unviable. This will then lead to the unviability of Port Kembla Steelworks which will force the closure of the remaining mines in the Southern coalfield, which could cost the Australian economy 10.7bil per year.
This stands at odds with the view presented by the Grattan Institute, scientists and economists that gave evidence to the IPC that commercially viable hydrogen green steel will be available by 2030 even without a price on carbon, and Bluescope itself along with the CSIRO and government have supported the development of Port Kembla as a green hydrogen hub, including a production facility worth 500mil. A number of resource economists gave evidence that the benefits have been overstated and costs understated, and an assumption that demand is going to continue unabated until 2050.
“The cost benefit analysis assumes the production and use of metallurgical coal in steelmaking indefinitely into the future and through the life of this mine to 2050, but we ought to be looking instead at the likelihood that there will be a rapid scaling down of the use of metallurgical coal in the future.” – Professor of Economics, John Quiggin, University of QLD. Former, Climate Change Authority
We will soon know if public submissions can undo the impact of the Department’s evidence. But for now, there is a question how this accorded with the Department’s procurement policy.