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On Tuesday, Australian officials approved a major dredging project that would expand the Abbot Point port, a major coal shipping port that is situated just next to the Great Barrier Reef.
The expansion of the port is vital to add an extra four new coal terminals, increasing the annual capacity of coal that it can handle by 120 million tonnes, and boosting the overall capacity to 300 million tonnes, enough to make it one of the world’s largest coal ports and creating the room to support new coal mines in the area.
The dredging and port expansion have long been considered vital for the justification of the development of new coal fields in the Bowen, Surat, and Galilee basins. Giant deposits in the Galilee basin, some 500 miles from the nearest port, have remained untouched due to the high costs associated with developing the necessary infrastructure. The expansion at Abbot Point will provide the opportunity of higher export volumes, and therefore reduce the associated cost per tonne producing the coal.
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Some of the mines proposed for the Galilee basin include; the 30 million tonne a year Kevin’s Corner mine to be opened by GVK Power & Infrastructure, the Alpha Coal mine of GVK and Hancock Prospecting, a 40 million tonne a year mine by China First, and mines from Adani Enterprises and Bandanna Energy.
In order to reduce the impact on the environment and protect the precious Great Barrier Reef, Greg Hunt, Australia’s environment minister, said that the amount of dredging given approval had been reduced from the 38 million cubic metres requested, to just 3 million cubic metres.
Hunt explained that “some of the strictest conditions in Australian history have been placed on these projects to ensure that any impacts are avoided, mitigated or offset.”
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However environmentalists are claiming that dredging activities of any size in the region would be damaging to the nearby reef. Felicity Wishart, Director for the Barrier Reef Campaign at the Australian Marine Conversation Society, remarked that “dredging and dumping on this scale is a body blow to an already fragile reef.”
The government has also approved a LNG plant and supply pipeline on Curtis Island, about 375 miles south of Abbot Point that is to be developed by Arrow Energy in order to take advantage of the natural gas trapped in coal seams in the Surat and Bowen basins. Although it is expected that this project will be scrapped as Royal Dutch Shell, one of the main investors, looks to cut back on some of its high cost projects around the world.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com