Altona plugs SA coal development

If the firm Altona Resources has its way, South Australia within five years will have a major new source of base-load electricity, set to feed into the power grid for many decades to come. Not only that, but the firm promises to supply the Australian market with as much as 10 million barrels per year of diesel fuel.

The proposal is not for massive investment in renewable energy in SA. No, Altona is talking coal: a 560-megawatt coal-fired power plant, able to produce about a third of the state's current average electricity consumption. Associated with it will be a coal-to-liquids (CTL) operation. The $3 billion complex will exploit the enormous coal reserves, estimated at 7.8 billion tonnes, of the Arckaringa Basin in SA's remote north.

On August 20 the Australian newspaper reported that Altona had signed an in-principle cooperation agreement with the Chinese state-owned firm CNOOC (Beijing) Energy Investment, a subsidiary of China's third-largest oil corporation.

Coal-to-liquids technology has been around for many decades and modern CTL plants are much less polluting than their predecessors. But even before the diesel they produce reaches a vehicle fuel tank, it has already been responsible for large volumes of greenhouse gas reaching the atmosphere. Figures cited last year by the US Natural Resources Defense Council indicate that the total emissions rate for coal-derived vehicle fuels, counting both production and use, is about 85% higher than for petroleum-based fuels.

While the August 19 quoted Altona describing coal-to-liquids as "a prime example of clean coal technology", there is no sign that the firm plans to capture and sequester carbon emissions from the plant.

Nor has there been any suggestion that Altona and its partners plan to install the elaborate, little-tried power station technology needed before sequestration becomes possible. Perhaps this is because "clean coal" at Arckaringa would make the energy produced grossly uncompetitive with power from geothermal plants, whose costs promise to be the lowest of all renewable options.

Altona's scheme would blow away the SA Labor government's goal of at least 20% renewable energy generation and use in SA by the end of 2014. Nevertheless, Altona's media releases brim with confidence that the coal scheme will go ahead, with references to a "streamlined state approval and evaluation process".

Altona and its partners are playing for big stakes. The Arckaringa Basin may be remote, but a major energy customer in the form of BHP Billiton's Olympic Dam copper, gold and uranium mine is only a few hundred kilometres away. The coal-to-liquids operation promises to be almost absurdly profitable.

Will SA Labor pass up the prospect of hundreds of permanent jobs, lucrative spin-offs for SA business and a steady flow of revenues to government coffers just to help save civilisation and the natural world as we know it? We shall see.