Clean Coal Administration Bill 2008

The Hon. IAN MACDONALD (Minister for Primary Industries, Minister for Energy, Minister for Mineral Resources, and Minister for State Development) [9.23 p.m.]: I move:

That this bill be now read a second time.

The Clean Coal Administration Bill 2008 puts in place a key strategy to substantially reduce New South Wales's greenhouse gas emissions. In doing so, it will help secure our future energy needs, our economy and our environment. The New South Wales Government has demonstrated a longstanding commitment to reducing greenhouse gas emissions. The Clean Coal Administration Bill builds on that commitment. The bill establishes a fund for research into, and development of, clean coal technologies, including demonstration projects. The fund will also be able to be used to increase public awareness of clean coal technologies, and for the commercialisation of clean coal technologies. The Government will contribute substantially to the fund. In addition, there is provision for voluntary contributions to the fund. This means that the coal and electricity industries or other non-government organisations can contribute to reducing greenhouse emissions through development of clean coal technologies.

The bill will establish the Clean Coal Council, which will make recommendations to the Minister for Mineral Resources on the funding of projects. The council can also make recommendations on policies to encourage the development and implementation of clean coal technologies. The Minister will report to Parliament annually detailing allocations of funds for specific projects and other activities. Members of the council will be drawn in equal numbers from the Government and from the coal industry. This is important as the mining industry has made a major financial commitment to the development of clean coal technology. The industry has committed $1 billion over 10 years through the COAL21 fund. Of this amount, $400 million will go towards projects in New South Wales. Industry will work with government to allocate the funds from both sectors. By working together, industry and government will be able to achieve much more than each sector working alone. While I am talking about funding, I advise that the Commonwealth has put up substantial funds for the purposes of clean coal technology.

The Clean Coal Administration Bill will ensure that funds are available and allocated for the best research into these important technologies. When established, these technologies will significantly reduce greenhouse gas emissions from the generation of electricity. We are all aware of the pressing need to reduce the production of greenhouse gases by modern societies. The 2006 Stern report on the economics of climate change has highlighted to the world the need to reduce global emissions. The report also talks of the necessity of taking action now to protect national economies in the future. The report of the International Panel of the United Nations is also clear that a country's capacity to mitigate greenhouse gases is tied closely to its social and economic development.

Turning to the situation in New South Wales, it is well known that more than 90 per cent of this State's energy needs are generated from coal. Coal provides us with an abundant source of very cheap energy. The downside is that in 2004 New South Wales produced approximately 10 per cent of all Australian greenhouse gas emissions from its coal-generated energy production. The challenge for New South Wales is the issue highlighted in the report of the Intergovernmental Panel on Climate Change—that is, to mitigate greenhouse gases in ways that avoid conflict, to the greatest possible extent, with sustainable development.

The Government has already set a target of cutting greenhouse gas emissions by 60 per cent by 2050 and returning to year 2000 levels by 2025. As an important step towards these targets, we need to find effective ways of reducing emissions from coal-fired power stations. We need to develop clean coal technologies. It is evident that coal is not the only means of producing energy. Other sources of energy do not have the same greenhouse gas emissions as those that are associated with coal-based energy. However, we cannot suddenly stop producing energy from coal. It will take time to implement other energy sources on a scale that can sustain a large, industrial economy such as that of New South Wales.

We cannot go back to the Dark Ages while other energy sources are established. Approaching the problem this way could lead to economic and social disaster. Therefore, the Government is taking steps to ensure continuity of energy supply in the most environmentally and economically responsible way. We are supporting and exploring a range of means of producing renewable energy. For example, hydro, biomass, landfill methane, wind and solar energies are all being developed and used. Significantly, the Government has set mandatory targets that require an increase in the amount of energy from renewable sources. Currently, about 6 per cent of the State's total energy usage is provided from renewable energy sources. The Government has set mandatory levels for renewable energy of 10 per cent of the State's energy usage by 2010, and 15 per cent by 2020. The Commonwealth Government has since introduced a target of 20 per cent. These targets will help reduce greenhouse gas emissions and boost the renewable energy sector.

The Government is supporting renewable sources of energy by providing funds for research into renewable energy technologies. This is entirely appropriate in our efforts to reduce our vulnerability to climate variability. It is important to make the point that however hard the Government works, and whatever the funds that might be committed, it cannot provide New South Wales baseload energy needs from renewable sources only within a foreseeable time frame. It will take a significant effort to meet the new mandatory renewable energy levels alone. It is virtually impossible for renewable energy to replace coal-based energy in the foreseeable future.

At the same time, the Owen inquiry has estimated that electricity demand in New South Wales will increase by 1.8 per cent each year over the next 10 years. Alternative energy sources and clean coal technologies together are expected to play an important role in satisfying the need for clean power in the medium to long term. However, clean coal technologies provide the best option for significantly reducing emissions while still providing stable, reliable baseload power. From this perspective, New South Wales needs the best technologies available to reduce greenhouse gases as soon as possible. At the same time, it is imperative to plan to grow our economy while we do this.

If we consider the State's economy, it is clear that coal and coalmining have played a significant role in New South Wales for a very long time. Further, coal currently supplies about 90 per cent of the State's energy needs. But its significance to the economy in other ways is as great as its critical role of supplying energy to New South Wales. The coalmining industry provides significant revenues for Australia through exports, and to New South Wales through the royalties it pays. The value of New South Wales coal production in 2006-07 was $8.1 billion, and the industry paid royalties of $412 million. From anyone's perspective, this is a major contribution to both the national and State economies. It is predicted to go up significantly in the next financial year.

At the same time, the industry plays a significant role in regional economies where coal is mined. It does this through job creation, investment and regional development. The mining industry employs about 47,000 people in regional New South Wales and a further 200,000 people are employed indirectly. It also makes substantial contributions to local infrastructure and local communities. All of these factors—national, State and regional—show clearly the important role this industry plays in the economy of New South Wales. Thus, while action must be taken to mitigate greenhouse gases, the approaches we follow must be sensitive to economic and social impacts, and ensure ongoing sustainable economic development.

One of the internationally recognised opportunities for adaptation in the energy sector is to provide stimulus to develop new technologies. This also means developing ways of adapting present energy technologies to use into the future while reducing greenhouse gas emissions substantially. Professor Garnaut made some very relevant comments on this point. In his recently released interim report on climate change, he noted that just putting a price on emissions will not generate optimal levels of investment in technological change. He said that the development of low-emissions technology for the energy sector is of particular importance to assist "Australia's transition to an emission-constrained future".

Clean coal technologies are already being researched and developed, both within Australia and internationally. These include combustion technologies, and capture and storage technologies. Capture and storage of carbon dioxide, or geosequestration, is already being used successfully in other industry applications. Well-known examples include Sieipner off the Norwegian coast, Salah in Algeria, and Weyburn in Canada. In Australia, clean coal technologies are at various stages of development. Some of the technologies have been developed at a research or pilot project level. For example, a pilot carbon capture plant is expected to be operational very shortly at Munmorah on the New South Wales Central Coast.

The plant will capture greenhouse gas emissions from the Munmorah power station using ammonia absorption technology. It is planned that the project will move to the demonstration phase by 2013. Another clean coal technology, carbon geosequestration, has been set up as a demonstration project off the coast of Victoria. Other worthwhile technologies are being researched and developed. They all need to be considered for funding to help in their development to commercial scale operations.

This is where the Clean Coal Fund, which is proposed in the bill, becomes critical. It can help the developing technology become a reality. If the funds are made available to encourage research, the implementation of clean coal technologies will happen sooner and more effectively. The proposed Clean Coal Council will assess projects and recommend priorities for the distribution of the funding to provide the maximum benefit to New South Wales. This legislation is an important means of ensuring continued energy supply for New South Wales in an economically and environmentally responsible way. I commend the bill to the House.

The Hon. RICK COLLESS [9.33 p.m.]: The Opposition will not oppose the Clean Coal Administration Bill 2008. The legislation proposes a framework to make a significant contribution to the reduction in greenhouse gas emissions through our State's electricity generation industry. The establishment of a Clean Coal Council, consisting of industry representatives and government appointees drawn from relevant government agencies, will supposedly help to drive the research and development of clean coal technologies, as well as their promotion and marketing to see whether they are taken up by the industry. Representatives of the clean coal industry rightly should have a say in the way these funds are distributed, and how the development and promotion of clean coal technologies are conducted. As it stands, the funds contributed by the coal industry will be used in these endeavours.

However, a more prescriptive approach should be taken in deciding the make-up of the council, with independent scientific appointees to be included. I add some criticisms about the process of clean coal technology. I refer to how we manage the carbon in our atmosphere. The carbon cycle tells us that carbon is a precursor to all life. In fact, the carbon cycle is known as the cycle of life. Carbon is involved in every facet of life on this planet. It is an important element in the cycle of life. If there were no carbon on this planet, there would not be any life on this planet. It is imperative that we have carbon and carbon dioxide in our atmosphere to maintain the very life that we all enjoy.

In other words, carbon is an organic compound; it is produced by an organic process. Why on earth would we try to control an organic process by implementing some sort of misguided engineering process? Why would we use a process that will emit more carbon and more carbon dioxide, develop technology and use the energy to capture and compress carbon dioxide, then pump it deep underground, which is what the clean coal philosophy is based on? Why would we try to solve a biological problem with an engineering process? The Government's approach is fundamentally flawed. It is the wrong model. We should not try to control an organic process with some sort of heavy-handed, arrogant engineering process. We should implement an organic solution to the process. I notice members opposite are having a little giggle at me, but there is an easy way to do this.

The Hon. Ian Macdonald: This does not exclude any type of technology.

The Hon. RICK COLLESS: I acknowledge the Minister's comment that it does not exclude any technology. I have heard the Minister speak on numerous occasions about clean coal technology and carbon capture from the stacks of coal-fired power stations and so on. The majority of the money allocated to this process will be spent on that process. The Government should consider carbon sequestration, not through engineering but through biological means. I am talking about sequestering carbon back into the soil profile. I will give the House a few facts.

The Hon. Ian Macdonald: We are looking at carbonation.

The Hon. RICK COLLESS: The Minister talks about carbonation. He does not know what he is talking about.

The Hon. Ian Macdonald: I do know.

The Hon. RICK COLLESS: No, he does not know.

Dr John Kaye: He generally doesn't.

The Hon. RICK COLLESS: Dr John Kaye is right; he does not know what he is talking about. I do not agree very often with Dr John Kaye, but when he says that the Minister generally does not know what he is talking about, he is right. I will inform the House of the potential to store carbon in the soil. If we take the agricultural soils in Australia down to a depth of 150 millimetres on a per hectare basis, over one hectare—a hectare is 10,000 square metres by 0.15 of a metre—we have something like 1,500 tonnes of soil in the top 15 centimetres of the soil in every hectare. If we have 1 per cent soil carbon in that soil—1 per cent of that 1,500—that means we have 15 tonnes of carbon per hectare stored in the soil. Carbon dioxide is 3.7 times the carbon, so the carbon dioxide equivalent is 3.7 times the amount of carbon in the soil. If you multiply that 15 tonnes by 3.7, that means you have 55.5 tonnes of carbon dioxide equivalent stored in the soil for every 1 per cent soil carbon level in the soil.

In Australia, excluding the deserts and national parks, there are 430 million hectares of agricultural land—that is, land on which productive agriculture is carried out. If you multiply 15 tonnes per hectare by 430 million, that is a huge amount of carbon that is stored in the soil. If you multiply that to get the carbon dioxide equivalent, it means that something like 2.3 billion tonnes of carbon dioxide equivalent is stored in the soil. Australia's carbon dioxide emissions are about 500 or 600 million tonnes annually. I ask the Minister whether that is correct.

The Hon. Ian Macdonald: Yes, 564 million.

The Hon. RICK COLLESS: If we are able to increase the soil carbon content by 0.1 of 1 per cent, that is about 250 million tonnes of carbon dioxide that we can store in the soil. I ask members to think about this. We need only about a 0.15 or 0.2 per cent increase in soil carbon levels to cancel out completely Australia's carbon emissions.

Dr John Kaye: Each year.

The Hon. RICK COLLESS: Each year. When I was in my agricultural consulting business—

The Hon. Ian Macdonald: No wonder you came here.

The Hon. RICK COLLESS: You don't know what you are talking about; that is the problem. When I had my agricultural consulting business and I was working with farmers, I was able to increase their soil carbon levels from 0.5 of 1 per cent to 5 per cent in a period of 10 years. That is a lot more than we need. We could virtually annihilate all of Australia's carbon emissions for the next 50, 60, 70 or 100 years if we could get our farmers to adopt those sorts of agricultural practices, which would result in their storing that much carbon—and farmers have stored that much carbon in their soil. This is a very important point.

I do not know how much money will be allocated to the Clean Coal Council, but I can assure honourable members it will be millions of dollars. We would be much better off if we put that money into changing agricultural practices; indeed, a lot less money would be need to be spent on that. Farmers would want to do it because getting carbon into their soil also makes it more productive. It is the glue that holds the soil together; it is the sponge that holds moisture in the soil, which increases its drought tolerance. All those sorts of things are good, so why would we not do it? But, instead, the Minister is going down the line of the Clean Coal Administration Bill and pumping money into all these other processes, such as sequestering carbon out of stacks on power stations, when we should be approaching it from a biological point of view.

We have no reason to doubt the expertise of any of the industry people who will be working on this—and I have the greatest respect for them, because they are all concerned about it. But we must have some policy direction from the Government to ensure that we are heading down the right road. I acknowledge what the Minister said a few minutes ago when he interjected to say that all these other things would be on the table. The ball is now in the Minister's court. If he has any understanding of what I have been talking about, he will ensure that his department pursues this sort of stuff. The answer lies not with the huge engineering-type process of putting some sort of collectors on the stacks of power stations—

The Hon. Ian Macdonald: They capture it before the stacks.

The Hon. RICK COLLESS: Wherever it is captured, it is captured and pumped underground somewhere. That is a complete waste of a nutrient that is in demand in the atmosphere. I could go on about this for hours. I conclude by saying that the Opposition will not oppose the bill, but I ask the Minister to give serious consideration to where the Government is going with this legislation.

I ask the Minister to take into account the need for agriculture to play a major role in this. When the emissions trading scheme comes into being, one group of people should benefit from this, and that is the people in Australia's agricultural industry who hold the key to controlling the amount of carbon that accumulates in the atmosphere. We have only to make a very small increase in the amount of carbon that is held in our soils for it to completely cancel out the amount of carbon emissions we have at the moment.

Ms LEE RHIANNON [9.46 p.m.]: The Clean Coal Administration Bill is dangerous legislation. It is dangerous because it demonstrates that the New South Wales Labor Government is not serious about dealing with runaway climate change, the most urgent issue of our time.

The Hon. Rick Colless: Nonsense.

Ms LEE RHIANNON: I note the interjection. The bill is a delaying tactic designed to forestall any real action that the Government should be taking to reduce greenhouse gas emissions. With the burning and mining of coal contributing about 40 per cent of this nation's emissions, it is clear that this is where change must occur. A responsible government, serious about meeting the climate change challenge, would be stepping up support for the renewable energy industry and energy efficiency technology as the key stages in the transition to a low-carbon economy.

The legislation demonstrates the efforts the conservative parties will take to protect the coal industry. The bill is not about reducing greenhouse gas emissions through some sophisticated technology; it is designed to buy time for the big coal companies that are coming under increasing pressure as the public's desire for meaningful action on climate change grows. As long as China and India and the other major coal importing nations continue to extend their reliance on energy sourced from coal, the coal industry will crank up its clean coal public relations efforts to justify its operations. The bill is just one cog in this deception designed to make out that dangerous emissions can be significantly reduced. The real agenda is to misuse the clean coal research to justify maximising coal sales to these countries and to pick up billions of dollars in profits.

The Greens utterly oppose the Government's Clean Coal Administration Bill. There is nothing good in it. This bill will harm the environment, the economy, the community, and future generations of Australians. New South Wales may not be able to recover from the setback this bill will foist upon us once the legislation is enacted. The behaviour of the big polluting coal companies and this complicit Labor Government—delaying tactics, climate change denial, runaway coal industry expansion, public relations smoke screens, contempt for communities—will become further entrenched at the very time we most need change.

The bill is dangerous because it robs the public purse of money that should be spent on the research and development of renewables, and energy efficiency measures. The Clean Coal Fund that this bill establishes will result in a serious misuse of $100 million of public money allocated to the fund. Understandably, people would expect that such an enormous amount of public spending was going towards research and development of technologies that can urgently reduce carbon emissions. However, not only are drastic emissions cuts from clean coal both hypothetical and far off in the future, if at all, but also a sizeable part of the $100 million Clean Coal Fund is for public relations—what the Government calls "increasing public awareness of clean coal technologies".

The Hon. Rick Colless: Spin.

Ms LEE RHIANNON: Spin, thank you. We agree on something. That is very good, Mr Colless. It is not just the Greens saying that the Clean Coal Administration Bill is an exercise in media management of the public's climate change concerns. This is how the Government defines the fund in its own legislation. This is an insidious scheme designed to lull people into believing that the Government is looking after their interests. Make no mistake: this legislation, backed by Labor and the Coalition, is robbing taxpayers to do the coal industries bidding.

The Hon. Ian Macdonald: They are paying $900 million in royalties. What are you talking about?

Ms LEE RHIANNON: I acknowledge the interjection about the $900 million paid in royalties. The Minister supports an industry that is pumping out excessive amounts of greenhouse gas emissions, and the State and Federal governments will not be able to meet targets to reduce those emissions as long as the Government continues to back the coal industry, as this bill clearly does.

The Hon. Ian Macdonald: The coal industry is a great industry.

Ms LEE RHIANNON: Here we go again. Mr Macdonald is saying the coal industry is a great industry. He is a Minister who fails to question and goes along with what is dished up time and time again. How this industry has captured the conservative parties in this country is a most disturbing story, and we see that in stark reality in the bill. The decision of the New South Wales Labor Government to use so-called clean coal technology to cover up its policy of business as usual for the coal industry is a repeat of the actions taken by the Federal Labor Government. The Federal budget brought down early last month was generous to clean coal technology compared with the renewables. Some $35 million has been granted to the industry for this year and $250 million for the term of the Government. Yet the vast array of renewable energy projects set to take off will receive no Federal funding this year. Some $125 million will be provided for renewable research and development during the life of the Federal Government. It is morally reprehensible that renewable energy is getting only half the public money going to clean coal. On top of this we have the extraordinary Federal policy to means test rebates for solar power panels. In a debate on clean coal this issue has to be mentioned. Green's senator Christine Milne has described this policy as:

Putting in train the collapse of the photovoltaic supply industry as it currently stands in Australia.

It is hard to believe that the Federal Labor Government gives less to the renewable energy industry than occurred under the former Howard Government. In addition to that disappointment, we have the New South Wales Labor Government spinning the line that backing clean coal research will secure the State's electricity supplies by taking additional steps to ensure cleaner and greener energy. You could not get anything further from the truth.

When the Premier foreshadowed the $100 million Government Clean Coal Fund in question time last month, he also promised a $100 million fund to support renewable energy research. Clean coal research should not be receiving one cent of taxpayer money. The Iemma Government should scrap its clean coal fund and commit the $200 million to the renewable energy fund. The term "clean coal" is a masterpiece of spin to counter raised public awareness about climate change. They will teach it in media and public relations courses for years to come, along with the tactics of tobacco lobbyists and the asbestos industry.

It is worth remembering that although carbon capture and storage technology, or geosequestration, has been around for a while, it has been constrained by its obvious limitations. Even if underground storage of carbon dioxide could be proved to work, no sites near power stations in New South Wales would be suitable. No coal-fired power plants in commercial production capture all carbon dioxide emissions; so clean coal technology is still at the experimental stage. David Brockway, chief of the Energy Technology Division of the CSIRO, estimates that it will be 2020 to 2025 before carbon capture and sequestration can be applied on a commercial scale to power stations. This time line fails to deal with runaway climate change. We must have viable, proven plans to reduce greenhouse gas emissions now—not in 15 to 20 years time.

The other major drawback for carbon capture storage is the safety factor. If sequestration technology is to work, it will have to deal with very large quantities of carbon dioxide. An accidental release of carbon dioxide can be lethal to humans and other animals, as it would replace the oxygen in the atmosphere that is essential for life. Burying large quantities of carbon dioxide could lead to unexpected geological instability or contaminate groundwater supplies. Dan Becker, Director of the Sierra Club's Global Warming and Energy Program, the highly respected United States environment organisation, has clearly summed up how misleading the term "clean coal" is. He said:

There is no such thing as "clean coal" and there never will be. It's an oxymoron.

The Greens are not saying that research on clean coal should stop, but we strongly dispute public money—

The Hon. Greg Donnelly: How much research should there be? You tell us how much research, if you do not accept it.

Ms LEE RHIANNON: Okay. I accept the interjection from Mr Donnelly. The point I am about to make is that we should not be putting public money into it. Why does the Government not get behind the suggestion of Tony Maher from the Construction, Forestry, Mining and Energy Union [CFMEU] that the coal industry should pay for the research rather than a Labor Government put in public money?

The Hon. Ian Macdonald: He has called on the Federal Government to invest in it.

Ms LEE RHIANNON: He was running a campaign and the member knows that. I acknowledge the interjection. I will come to Tony Maher's quote and how that campaign—

The Hon. Ian Macdonald: There are lots of quotes from Tony Maher.

Ms LEE RHIANNON: Yes, and he was very clear about that at one stage, but unfortunately it shifted.

The Hon. Ian Macdonald: I rest my case, your Honour.

Ms LEE RHIANNON: A failed case at that it is. Money for this research should come from the coal industry not the public purse. While the Minister's second reading speech makes out this legislation is to further develop clean coal technology, an examination of the commitments given by industry and governments to this research suggests that the Clean Coal Fund we are now debating is purely a public relations exercise. In May last year the Australian black coal mining industry announced what it called the world's largest whole-of-industry funding commitment for research, development and demonstration of clean coal technologies aimed at combating climate change.

This was to be achieved through an expansion of the $300 million COAL21 Fund announced in 2006 with the industry predicting that $1 billion would be raised over the coming decade, and stating with more fanfare that the Australian black coal industry was prepared to set the benchmark for other industries to follow. Now COAL21 participants include the Federal, Queensland, New South Wales and Victorian governments, the power generation and coal industries—including New Zealand—private and public sector research organisations, and the industry union, the CFMEU. We know from statements made by CFMEU Mining Division Secretary Tony Maher that he strongly backs the coal industry paying for clean coal research, not the Government. Mr Maher has written to the chief executive officers of BHP Billiton and Rio Tinto. In February last year he stated:

If they [mining companies] levy themselves a dollar a tonne—bearing in mind that they get over $100 a tonne for some of the coal—then they would raise $2 billion.

This was the CFMEU Mining Division's plan to increase research funding from what he calls a paltry $300 million over five years to the billion dollar level. The Australian Coal Alliance established the COAL21 Fund and plans to collect a voluntary levy from its members to raise $1 billion over 10 years. A voluntary levy, that is all that has come of all this talk. Tony Maher's campaign for coal companies to put in $1 a tonne has failed. Despite huge increases in the price of coal the industry is not prepared to invest more money in its Clean Coal Fund. So why should the Government? That is the question that the Minister should answer in his speech in reply, if he does not wish to interject now. The Minister is failing to deal with a company that has run away from this because it knows it can con the Government and the Opposition into giving it a huge public relations boost with a clean coal fund, which is about public relations. The Australian Coal Association executive director, Ralph Hillman, was quoted on page 11 in the Australian Financial Review of 16 April 2008 as saying:

The fund I think is regarded as a great contribution for the industry and adequate for the purpose.

This comment suggests that the fund was set up to let the coal industry continue to expand despite the global demand to cut greenhouse gas emissions. The scenario is that as long as the Government keeps talking about clean coal the industry can continue to build new coalmines and, due to the skyrocketing price of coal, expand or reopen mines that were deemed uncommercial only a few years ago. Currently seven new coalmines are awaiting approval in the Hunter Valley, and dozens more have been approved in the Hunter alone since the COAL21 Fund was dreamt up by the Australian Coal Association two years ago. In peddling the clean coal message, the Government is disregarding the advice of international expert scientists, economists and business leaders. Clean coal is the key that allows the Government to give assurances to the coal industry that it is business as usual, while at the same time spruiking a commitment to deal with climate change to the general public. Solar, wind, geothermal, biomass and tidal energy have all taken a back seat to clean coal technologies. It is no surprise that the Clean Coal Fund got pole position over the Renewable Energy Fund. Minister Macdonald's rhetoric in this House last month spelt it out. In answer to a question from Mr Eddie Obeid the Minister said:

[The Govt is] committed to forging real partnerships with science and industry to fight climate change .... Clean coal technologies save jobs and save the environment.

Once again the Minister gives a highly unoriginal answer. He reads his notes and gives a soft response. He does not deal with the energy industry at all. He is seen as a total pushover.

The Hon. Ian Macdonald: I don't read my notes when I answer questions.

Ms LEE RHIANNON: You are a total pushover. The coal industry sees him coming. Give him a cooked lunch, a few trips to China and he's your man. He is on board. Who does the Minister for Mineral Resources think he is kidding? Certainly he fools himself, but hopefully not many others. The coal industry has caused climate change. It is not fighting against climate change; it has been causing climate change for the past 100 years or more. Minister Macdonald needs to take off his blinkers. Clean energy technologies already exist, they work and they are industrially and commercially viable. They are not hypothetical pipedreams, like clean coal, which simply has not measured up after years of effort and trials. Technologies such as energy efficiency, solar energy and thermal and wind energy are ready to roll out. The only thing stopping the expansion of the renewable energy industry is the Government's intransigence on coal. If the Government would wind back part of its massive subsidy of the coal industry and transfer those billions of dollars into the renewable energy market, then renewable energy and energy efficiency measures could cut our emissions so deeply that the quest for clean coal technologies would become obsolete. In concluding his answer to Mr Eddie Obeid's question about the Government's action on clean coal, the Minister said:

If we are to slash the 60 million tonnes of carbon dioxide emitted by New South Wales power stations every year, we need concrete action, not pie-in-the-sky promises.

It is the Minister who is offering pie-in-the-sky promises. Greenpeace has launched a comprehensive report, based on peer reviewed scientific data, which reveals the pitfalls of clean coal: Carbon capture and storage [CCS] cannot deliver in time to avoid dangerous climate change; and the earliest possibility for deployment of CCS at utility scale is not expected before 2030. To avoid the worst impacts of climate change, global greenhouse gas emissions have to start falling after 2015, just seven years away. Carbon capture and storage wastes energy, and the technology uses between 10 per cent and 40 per cent of the energy produced by a power station. Wide-scale adoption of CCS is expected to erase the efficiency gains of the last 50 years and increase resource consumption by one third. Storing carbon underground is risky; safe and permanent storage of CO2 cannot be guaranteed. Even very low leakage rates could undermine any climate mitigation efforts. Carbon capture and storage is expensive. It could lead to a doubling of plant costs and an electricity price increase of 21 per cent to 91 per cent. Money spent on CCS will divert investments away from sustainable solutions to climate change. Carbon capture and storage carries significant liability risks; it poses a threat to health, ecosystems and the climate; and it is unclear how severe these risks will be.

Greenpeace's arguments against clean coal are strong. If we are to achieve the drastic cuts in greenhouse emissions required to halt global warming we must act immediately to see emission levels start falling by 2015. Clean coal, if it does work, will not be viable until at least until 2030, and it may prove so costly that it never becomes commercially viable. The bill sets up another major public subsidy of the coal industry. If this financial support and the other coal subsidises were to be redirected into more viable, proven low-emission technologies, such as solar and wind and thermal energy, we would be in a position to make real inroads into reducing greenhouse gas emissions—the essential step to deal with climate change. Over recent decades coal industry subsidies have run into billions of dollars. For example, in the 2003-04 financial year the public subsidised the entire mining industry's diesel fuel bill by $1.1 billion, according to Federal budget papers.

The Hon. Ian Macdonald: Federally.

Ms LEE RHIANNON: I said federally.

The Hon. Ian Macdonald: How much did it bring in royalties and taxes?

Ms LEE RHIANNON: I acknowledge the Minister's interjection, but the coal industry is also killing the planet. The Government needs to plan for a sustainable industry that thrives, produces jobs and does not produce greenhouse gas emissions. The Minister fails to get his head around that. In the five years before 2003-04, $4.86 billion of fuel subsidies went to the mining sector. In the Hunter Valley alone in 2005-06, 22 open-cut coalmines received about $300 million in Federal fuel subsidies, despite earning record industry profits. But that is just the tip of the iceberg.

The Hon. Greg Donnelly: Of course!

Ms LEE RHIANNON: Of course! Thank you, Mr Greg Donnelly. A draft report from the University of Newcastle shows that direct subsidies from the New South Wales Government to projects and programs for the New South Wales coal industry during the past 10 years totalled more than $150 million, administration and information networks funded by the New South Wales Government that directly support the coal industry totalled $123 million, and subsidies to infrastructure used by the coal industry totalled $393 million. Indirect subsidies to the electricity generation industry and subsidies that encouraged the use of coal-fired electricity reached over $4.4 billion. In total, the New South Wales Government's direct and indirect subsidies for the coal industry over the past 10 years reached more than $5 billion. If New South Wales were slowly weaned off coal-fired power and those subsidies were directed into renewable energy, every household could generate low-emission energy and we could export our know-how to the rest of the world.

The Hon. Ian Macdonald: Do you have the sources for those figures?

Ms LEE RHIANNON: Most definitely; they are the budget papers.

The Hon. Ian Macdonald: It is $5 billion over 10 years?

Ms LEE RHIANNON: Direct and indirect subsidies. I would be happy to sit down with the Minister and go through them with him, and I would be interested in his feedback.

Dr John Kaye: I don't know why.

Ms LEE RHIANNON: I acknowledge the interjection from Dr John Kaye. We never know when we will catch the Minister out because he stumbles so often. One of the unspoken dangers associated with carbon capture and storage is the issue of liability. The risks of long-term storage of CO2 are so great that no company will take on the liability and many are seeking to limit their legal liability to a mere 10 years. Senator Milne stated:

Aside from the tremendous remaining questions about whether the technology will even work, the liability issue may ensure that so-called "clean coal" projects never get off the ground. Coal corporations will not commit to storing tens of millions of tonnes of CO2 unless they are guaranteed that the governments will carry their liability in perpetuity, and no one government can bind future governments to ensure that will be the case.

You would have thought that, after Ok Tedi and so many other examples in recent years, no government would readily facilitate companies walking away from their long-term pollution liabilities. But this draft legislation, released deliberately on a Saturday to avoid scrutiny, appears to do exactly that by passing perpetual liability for carbon leakage into public hands if the Minister issues a site closing certificate.

It is wrong to transfer the risk of worse climate change from carbon leakage onto taxpayers and future generations. Working families care about the world their children inherit and the costs that are imposed upon them.

Senator Milne went on to say:

The liability issues clearly demonstrate the folly of further developing an industry, which generates an enormous and highly dangerous waste stream. Rather than spending billions on working out how to store the waste and billions more on perpetual monitoring, surely it would be better not to generate the waste at all and move to truly clean alternatives.

I urge the Minister in his speech in reply to deal with the issue of liability. It is a major hole in his argument and it is an issue that Government representatives regularly refuse to engage with. They need to front up to this issue, otherwise clean coal technology will not get off the drawing board. As New South Wales and other governments push ahead with clean coal technology it is becoming increasingly clear that it will be the public who will ultimately pick up the tab for the real risks associated with this technology. The risks are becoming very apparent. Some high-profile clean coal projects have collapsed recently. In the United States of America, FutureGen, which President Bush announced in 2003, using government subsidies, was to test the most advanced techniques for converting coal to a gas, capturing pollutants and burning the gas for power. The carbon dioxide was to be compressed and pumped underground into deep soil layers, with monitoring devices in place to test if any was escaping to the atmosphere.

An amount of $50 million has been spent on FutureGen—about $40 million in Federal money and $10 million in private money—to draw up preliminary designs; to find a site that had coal, electric transmission and suitable geology; and to complete an environmental impact statement. But in January this year this flagship clean coal project collapsed on cost grounds, despite receiving more than $US1 billion in public funds and receiving protection from financial and legal liability in the event of accidental releases of carbon dioxide.

The Hon. Ian Macdonald: An amazing distortion of the facts. I will deal with that in my reply.

Ms LEE RHIANNON: I look forward to the Minister dealing with that. Again, I hope he has the courage to deal with the liability issue in full. Collapse of clean coal projects is not confined to the United States of America. Earlier this year the Western Australian joint venture between BP and Rio Tinto, announced to great fanfare last year, was pulled when it was discovered that the storage site proposed was geologically unstable. That leaves ZeroGen in Queensland and the New South Wales clean coal project. Minister Macdonald will forge ahead with this Clean Coal Fund—hanging out with coal companies, making trips overseas and abusing anyone who dares to disagree with him.

The Hon. Ian Macdonald: I don't abuse anyone!

Ms LEE RHIANNON: Failing to answer questions—I think we need to add that to the long list of how he conducts himself as Minister.

The Hon. Ian Macdonald: You are the only one who does the abusing.

Ms LEE RHIANNON: That is totally not true. That is an insult and the Minister should withdraw it. That is totally insulting. The Minister needs to watch his step on this issue, and those statements. He is headed, again, for a tumble. Even the Bush Administration is treading carefully with the clean coal technology. Clarence Albright, the Under Secretary of the United States Energy Department, in discussing the collapse of the FutureGen project, stated that the Government had to change its approach to "limit taxpayer exposure to the escalating cost". I will be interested to see if the Minister is willing to take on Clarence Albright when he informs us of his analysis of FutureGen. The New York Times has stated that despite bipartisan efforts to save FutureGen "the project is on life support". Also, a New York Times article written by Matthew Wald and published on 30 May stated:

only a handful of small projects survive, and the recent cancellations mean that most of this work has come to a halt, raising doubts that the technique can be ready at any time in the next few decades.

Nikki Williams of the NSW Minerals Council and all the coal companies ready to open up more coalmines across New South Wales will appreciate Minister Macdonald and his Labor and Coalition clean coal backers. This is the justification that they need to keep mining and burning coal. But, as we know, clean coal is a con—a dangerous con because it delays Australia's transition to a new low-carbon economy. Members should not be conned by this legislation but, sadly, we know that the conservative parties that dominate this House will shortly vote to make this bill legislation.

We need a new dialogue on renewable energy technologies and energy efficiency measures to reduce Australia's dependence on fossil fuels, to build new jobs and to create export markets that will last and not disappear when this industry is condemned for the danger it brings to the world, as we already know. This is a way we can ensure a more certain future for the next generation. Last month the Premier said New South Wales is a leader when it comes to reducing greenhouse gas emissions and tackling climate change. It sounded promising enough, but scratch the surface and you expose the rot: the Clean Coal Fund is a delaying tactic designed to forestall any real action on climate change.

Reverend the Hon. FRED NILE [10.14 p.m.]: On behalf of the Christian Democratic Party I speak in support of the Clean Coal Administration Bill 2008. This bill will establish mechanisms for the New South Wales Government to fund research into clean coal technologies. It has two main aspects. One aspect of the bill is to establish a Clean Coal Fund, which will fund research, demonstration and commercialisation of clean coal technologies and increase public awareness and acceptance of the importance of reducing greenhouse gas emissions from clean coal technology. The Minister for Mineral Resources will be responsible for administering the fund and the Government will make contributions to the fund. Could the Minister give us some guidance as to what that means in regard to budget allocations? I note that page 3 of the bill, under the heading "Payments into Fund", states:

(1) There is payable into the Fund:

(a) all money advanced by the Treasurer for the Fund.

How much will be advanced by the Treasurer? It continues:

(b) all money appropriated by Parliament for the purposes of the Fund.

Page 4 of the bill, under the heading "Investment of Money in Fund", states:

The Minister may invest money in the Fund.

One clause of the bill states that the Treasurer will put money into the fund and another clause states that the Minister will put money into it. Can the Minister give us some guidance, in round figures, as to what that would amount to in one year or over 10 years? I note also that there will be voluntary contributions. In the agreement in principle speech the Minister in another place stated that the mining industry has committed $1 billion over 10 years through the COAL21 Fund. Of this, $400 million will go towards projects in New South Wales and industry will work together with Government to allocate funds from both sectors. So there are mining industry donations—obviously voluntary—and then some contributions from the Government. We are told the Minister will report annually to Parliament on fund allocations for research projects and expenditure.

The second aspect of the bill is to establish a Clean Coal Council, which will receive applications for the funding of clean coal technology projects and make recommendations to the Minister on priorities for funding and applications for funding. It will also advise on policies to encourage the development and implementation of clean coal technologies and make recommendations concerning opportunities for New South Wales to be involved in interstate, national and international research projects. There has been some criticism of the coal industry, but I note that in his agreement in principle speech the Minister reminded us that the value of New South Wales coal production in 2006-07 was $8.1 billion and that the industry paid royalties of $412 million. That is a major contribution to both the national and State economy, leaving aside the fact that the coal mining industry employs about 10,000 people in regional New South Wales and a further 30,000 people are employed indirectly. It is a major industry in this State.

The Clean Coal Council will consist of five New South Wales government agency members and five members jointly nominated by the Australian Coal Association and the NSW Minerals Council. The Minister may also make other appointments to the council from time to time. Following debate in New Zealand, which has gone in a very radical direction on the issue of climate change, the Government should monitor very carefully what New Zealand is doing because it has apparently blown its budget out of the water and the New Zealand climate change policies are adding billions of dollars to its budgeted expenditure.

It is reported that the Government's climate change policies will result in every family having to make a contribution. We must ensure that that money does not end up in a hole in the ground. It should not be spent on paper programs. If the Government follows the path that New Zealand has taken it will face some serious problems. I understand that Australia produces only 1.5 per cent of the world's greenhouse gases. Therefore, we should not overreact because we are not responsible for what is happening to planet Earth.

Dr John Kaye: What about the percentage of our population?

Reverend the Hon. FRED NILE: It has nothing to do with the size of the population. It is about Australia's contribution. The major producers of greenhouse gases are India, China and the United States. They should be taking strong action to reduce greenhouse gas emissions. Australia should not have a guilt complex on this issue.

The PRESIDENT: Order! Before I give the call to the next speaker I take the opportunity to remind members that interjections are disorderly at all times. However, by tradition of the House the Chair tolerates interjections that are not disruptive, particularly those that facilitate the exchange of views and argument. I do not intend to continually call members to order. Those who persist with such behaviour will be prevented from participating further in the debate. Given the divergence of views on this bill, members should respect the traditions of the House and allow the debate to proceed in an orderly manner.

The Hon. Charlie Lynn: We need an attitude change before we can get climate change.

The PRESIDENT: Order! The Hon. Charlie Lynn should reflect upon my recent comments.

Dr JOHN KAYE [10.20 p.m.]: I will start by asking members to imagine a heavy smoker who has been unwell for some time, who has been coughing and who decides to visit a doctor. However, the smoker draws the short straw in his choice of doctor. He accidentally chooses a doctor who does not believe that smoking causes lung cancer.

The Hon. Charlie Lynn: Point of order: Is the member speaking about marijuana or tobacco?

The PRESIDENT: Order! I call the Hon. Charlie Lynn to order for the first time.

Dr JOHN KAYE: In fact, the doctor does not believe in cancer at all and spends much of the consultation abusing in lurid terms scientists and public health advocates who have presented the evidence linking smoking with the epidemic of cancer. Based on this ignorant, self-serving and counter-scientific view of the world, the doctor tells the smoker, "Look, you should smoke more. It will be good for your anxiety. Better still, it will create more jobs in the tobacco industry." Despite his cancer scepticism, to alleviate the patient's concerns about health impacts—ill founded though he believes them to be—and to address the mounting alarm amongst other doctors in the same medical practice, the doctor tells the patient that he should keep smoking because tobacco companies are working on a new type of safer cigarette. They call the contents "clean tobacco". The doctor goes on to say that the scientists working on the new type of cigarette have no real proof that they can get it to work, and even the most optimistic believe it will be 15 years before it is available.

When and if it does work, the best that can be hoped for is a lower rate at which smokers of clean cigarettes will contract cancer. So, the doctor tells the smoker to keep at it because one day, if he lives long enough, he might be able to smoke without doing further damage to his health. Such advice would never be acceptable from a doctor. Not only is it based on a scientific canard—smoking does cause cancer, perhaps not in everyone, but statistically it does—but it contains a logical fallacy from central casting. How will the possible advent of a clean cigarette in the future—which may never happen—help with cancer that is being contracted now? No-one in their right mind would accept that advice from a doctor. Why then should we accept the equivalent of that advice from a government? That is exactly what the Iemma Government is trying to pull off with this legislation and with the entire clean coal myth.

Coal-fired electricity generation produces 57 million tonnes carbon dioxide each year in New South Wales. That is 37 per cent of the State's greenhouse gas emissions. That has a massive impact on the climate and the amount is increasing each year. Even more emissions are produced by the combustion of export coal. It is a massive contribution to the unspeakable damage that is being inflicted on the social, environmental and economic future of this planet. However, the best this Government can do is work flat out to increase the number of mines and push for a new coal fired power station and cover for the damage it is doing with a bipartisan agreement on more money for spin and obfuscation. It beggars belief that the Government bases its expansion of coal production on the promise that one day it might be clean. Emissions will continue to rise until the technology is available, and it might never be available. In that case, this State and the planet will have walked down a blind alley. We will have increased the damage we have done to the climate and increased our dependence on coal. One day we will hit a brick wall and will be able to go no further.

The term "clean coal" is a giveaway. "Clean" is a marketing term, not a term of science or engineering. This Parliament is on the verge of passing a term from marketing into law. It is an old term that has taken on the meaning of the day, depending on which environmental concern was being airbrushed out of existence. It was first used when ash deposits near power stations caused concern. It was then used in reference to oxides of nitrogen and oxides of sulfur causing acid rain. It is now being used in the debate on greenhouse gas emissions. It is now all about reducing carbon dioxide outputs. The bill defines "clean coal" as technologies for facilitating the reduction of greenhouse gas emissions from the use of coal. That is broad to the point of being ridiculous. It could mean anything; it could mean any increase in combustion efficiency, although most of the efficiencies are already gained for cost-effectiveness reasons. It could be the supposed novel combustion technologies. Some of these verge on the absurd.

The most laughable is the idea of pulverising coal and feeding it into a gas turbine. That technology is doomed to fail. Anyone who has worked with a gas turbine knows that carbon particles hitting the blades of a fast-rotating turbine will inevitably cause a metallurgical disaster. Probably the most risible of all the proposals is the burial of carbon dioxide—the so-called carbon capture and storage. I refer to the energy used in capture—that is, the separation—transport, pressurisation, storage, and pumping it underground. There will be technological barriers and extraordinarily stringent material requirements involved in transporting carbon dioxide. Capture and storage faces the inevitable risk of leakage. Of course, that would lead to associated insurance and liability problems.

It is interesting that the Australian Coal Association does not agree with the definition. It states that clean coal technologies are a family of new technological innovations that are environmentally superior to the technologies in common use today. That is an entirely different definition—in fact, it is much broader—because it can include new combustion processes such as fluidised bed combustion and low-oxide nitrogen burners that remove pollutants or prevent them from forming while the coal burns. There seems to be substantial disagreement between the Government and the Australian Coal Association about the meaning of "clean coal". Perhaps we should get the spin doctors together for a conference so that at least they can agree on what they mean by "clean coal". It could be the "Future of Clean Coal Propaganda Conference", with sessions entitled "What sells and what doesn't" and "New labels for old myths". The closing session might be "Clean is beautiful—How we won the PR war and lost the planet". The point is there is no definition, other than a wing and a prayer promise that perhaps one day they can control pollution. It is all about public relations and very little about the substantive engineering issues that urgently need addressing.

The other give-away clue to this bill is who gets to call the shots on directing where the funds are spent. It will not be the Electricity Supply Association of Australia, it is not the National Generators Forum, it is not the people who work with power stations, know combustion technology, know what the problems are and what a farce the idea of capturing and burying carbon dioxide is. It will be the Australian Coal Association and the New South Wales Minerals Council who get to call the shots on a clean coal fund. It is very clear from that fact alone that this bill is not about greenhouse or energy generation, it is about the politics of cover-up for the coalmining multinationals; it is about creating the public myth that coal can be a clean fuel to justify obscene profits; and it is about governments that roll over every time to mining corporations because governments lack the courage to stand up to them and lack the imagination to define and pursue an alternative vision that shakes free the shackles of mining corporations.

We can see why those with real experience in generation technology have been excluded, because initially they were very excited about the idea of clean coal, carbon capture and storage. Now, with the reality of emissions trading looming, the National Generators Forum and the Electricity Supply Association of Australia are having their bluff called on the inflated boosting of the clean coal pacifier and they are much less enthusiastic.

Reporter Matt Peacock succeeded in getting John Boshier, the chief executive officer of the National Generators Forum, to make two statements on ABC television's 7.30 Report on 7 April 2008. John Boshier, the chief representative and spokesperson for the power generation industry in New South Wales, had this to say:

I think we all felt a few years ago that clean coal was doable and was a great option for Australia. We've got a lot of coal in Australia. We're now worried about how long it will take and how much it's going to cost on the scale that we're talking about.

When the whole idea of emissions trading was off in the future, it was a damned good public relations exercise, but now the reality is here and suddenly the generators who have to influence this nonsense know full-well it cannot be achieved and know full-well it is no solution to the problems they face with emissions trading and reducing emissions. Mr Boshier went on to say:

It would be quite risky to assume that you can have carbon storage at the moment without having the experience of Otway Basin under our belt. That's why we're waiting with bated breath to see how it's going to go in the next five to ten years.

This was said by John Boshier, the man who originally was the key proponent of clean coal in Australia. He is now saying, "Hey, wait a minute, now that my members—the generators, publicly and privately owned, around New South Wales—have to reduce their output, we can't do this for five or ten years. Back off everybody and be calm." Well, it is not surprising that Mr Boshier says these things because the experiments that have been conducted in clean coal around the world fall into two distinct categories—the farces and the disasters, and there is nothing in between.

Let us examine one of the disasters to which my colleague Ms Lee Rhiannon referred. It is interesting that the Bush administration in the United States of America—the most pro-coal, pro-fossil fuels government anywhere in the world possibly outside the Soviet Union and the OPEC nations; an administration that would even make the Hon. Ian Macdonald feel somewhat embarrassed by their enthusiastic promotion of fossil fuels—felt the necessity to withdraw funding from the FutureGen project in Illinois. Originally it was to be a $2 billion project. However, because of cost overruns and what was regarded as the inevitable failure of the project, the United States Government withdrew its $2 billion and left the project languishing, dying a very slow death, with consequences for clean coal proponents around the world and, I must say, with consequences also for Treasurer Michael Costa's electricity privatisation deal. After all, the Owen inquiry states that one of the key justifications for electricity privatisation is to get money in to clean up the emissions of the electricity industry in New South Wales. If the emissions cannot be cleaned up, if projects like FutureGen fail, there is not much argument for privatisation. The problem that FutureGen faced was massive cost overruns. Similarly, the Queensland ZeroGen project is running massively behind schedule. Those are the disasters.

Let me now talk about the farces. Probably the worst of all is the Munmorah power station's so-called pilot plant for carbon capture and storage. Actually it is not carbon capture and storage, it is carbon capture and release. It is a bit like going fishing with a Green, who always wants to throw the fish back. Here we are in New South Wales, they cannot stand the idea of keeping the carbon—

The Hon. Ian Macdonald: It is not noted as carbon capture and storage.

Dr JOHN KAYE: No, we should call it carbon capture and release. But even then it is less than 1.5 per cent of carbon dioxide emissions, and that is returned to the atmosphere anyway. The Treasurer needs to be reminded that the plant is not at Vales Point, as he told the media in December last year when he was trying to explain the sudden appearance of a number of Chinese engineers at Vales Point power station. It is actually at Munmorah power station. It was such a farce that even the Treasurer did not know where it was. It is no wonder that the former Labor environment Minister Phil Koperberg called clean coal an oxymoron, because the reality is that coal is carbon. The energy value within coal is carbon. When carbon is burnt, carbon dioxide is produced. Of course, after Mr Koperberg dared to speak the truth, the spin doctors got him to recant—well, it was sort of a recant. On 27 September last year ABC radio reported:

But Mr Koperberg has sought to explain the difference between the term "clean coal" and developing clean coal technology.

"We've got to keep this in context, I never said that clean coal technology was an oxymoron, I said that coal – clean coal, coal it
emits – and that's why the whole world and New South Wales leaders in many of those areas is encouraging technology which
will make coal cleaner", he said.

"That is the objective, it has got nothing to do with breaking ranks."

If members are no clearer on what he was saying, neither am I, and neither were the people of New South Wales. The reality is that he was unable to explain why the day before he spoke the truth, when he said that clean coal is an oxymoron.

Proposed section 5(c) of the bill is the other great clue as to the real purpose of this legislation. It states that the real purpose is to increase public awareness and acceptance of the importance of reducing greenhouse gas emissions through the use of clean coal technologies. So far as this Government is concerned the importance of reducing greenhouse gas emissions only exists in as much as it further promotes the use of coal. What we have here is publicly funded propaganda for the coal industry. My colleague Ms Lee Rhiannon said it very clearly: This is about sustaining obscene profits for the coal industry. The coal industry should be paying for clean coal research, not the people of New South Wales and Australia. We certainly should not by taking funds away from the technologies that are almost ready and that are guaranteed a future in our energy mix—the sustainable clean, green, energy efficient, renewable energy technologies.

On two occasions I have said that profits to the coal companies are obscene, and I am disappointed that on neither occasion did any of the coal proponents in this Chamber challenge me. Despite the absence of any challenge, I will explain why I think the profits are obscene. Each tonne of coal when it is burnt emits about 2.65 tonnes of carbon dioxide. Sir Nicholas Stern tells us that when each tonne of carbon dioxide is burnt it causes about $103 of damage to the climate. That is real damage to the climate, measurable damage to the climate, damage that we, our children and their children will end up paying for in terms of increased insurance costs, food costs and housing costs, a diminished standard of living and reduced longevity. That means that for every tonne of coal that is burnt more than $270 worth of damage is done. Coal corporations are stealing from the future; they are stealing from us and from future generations by not paying $270 for each tonne of burnt coal, and we are making it worse by passing this legislation, which will create the smokescreen behind which the coal corporations can continue to rip us off to the tune of $270 for every tonne of coal they take out of the ground and are allowed to burn.

It is interesting to contrast this legislation to the stillborn legislation that was going to introduce a New South Wales mandatory renewable energy target. Members will recall that it was introduced into the lower House on 27 June 2007 and it has been stalled ever since. In three days it will have its first birthday sitting on the Notice Paper of the lower House. I do not know how old it will be when it falls off that Notice Paper, but there is no doubting that will happen sooner or later; it will never become reality. It is sitting there languishing, waiting for the Federal Government to introduce legislation to increase its mandatory renewable energy target—legislation that has not yet been introduced. And while it sits there it is being shot at by the fossil fuel lobby. There is still no sign of any renewable energy target for New South Wales or federally—all we have are cuts to subsidies for rooftop solar photovoltaics.

The Greens oppose the legislation because it is a sham that distracts the State from the essential course of reducing greenhouse gas emissions using technologies that are already working or that are showing promise of working in the immediate near future. The Government is running cover for industry that makes profits at the expense of the future. The bill is its way of pushing clean coal propaganda to prop up the clean coal myth. The Greens urge the House to reject this bill.

The Hon. Greg Donnelly: Can you tell us about New Zealand?

Dr JOHN KAYE: I have just been asked to talk about New Zealand. New Zealand is a wonderful country but making comparisons between New South Wales, where about 90 per cent of electricity comes from the combustion of fossil fuels, and New Zealand, where the overwhelming majority of energy is hydro generated, makes very little sense. I am happy to make the comparison, but I do not see the relevance. I am not advocating the New Zealand solution. Making a comparison between the two is not an intellectually profitable exercise.

The Hon. IAN MACDONALD (Minister for Primary Industries, Minister for Energy, Minister for Mineral Resources, and Minister for State Development) [10.42 p.m.], in reply: I thank honourable members for their contributions to this debate. Given the lateness of the hour I will not attempt to tackle all the matters raised, suffice it to say this bill looks forward to the future. That we disagree totally with the Greens on this issue is clear and has been for some time, and that has nothing to do with pandering to mining companies or anything of that nature. The fact is that 92 per cent of our State's energy is coal generated. That figure will not change dramatically over the next decade. We have to get on with the job of trying to sequester as much carbon that is created from coal-fired power as possible.

I have emphasised sequestration in safe, structures below 800 metres underground. Such structures overseas have proved to be very safe. The Sleipner development in Norway about which I have spoken previously in this House sequesters one million tonnes of carbon per annum, and has done since 1996. Not one problem has been identified with that sequestration. I acknowledge the points made by the Hon. Rick Colless about other strategies to sequester carbon. He is quite right; much research is being done by the Department of Primary Industries on precisely this type of work, and we will be seeking further funding and partnerships with a number of other agencies to develop that research at our greenhouse gas centre at Tamworth. That is very much on the agenda.

Also on the agenda are techniques surrounding the use of carbon from power stations to create algae, which can then be used for bio diesel. That research is being carried out by the CSIRO. The Government is working with the CSIRO on that, just as we are working with it on the Munmorah development, which is essentially a carbon capture process using chilled ammonia to strip the carbon dioxide from the emissions. That is a very important step forward to sequestration, regardless of what technology will be used for that purpose—whether it be carbonation or combining it with fly ash to make rock. That technology is being researched by the University of Newcastle. The rock could then be stored in former mine sites—underground, very safe and secure—or sequestered in deep underground structures. All that research is a response to the need to find technologies to reduce the carbon footprint of the coal industry.

No matter what Dr Kaye or Ms Lee Rhiannon say in this place or when they are leading demonstrations in the Hunter in the coming weeks, China, India and the United States will continue to use substantial amounts of coal. A number of European countries are now talking about regenerating their coal-fired power stations. The United Kingdom and Germany are considering it at this very point. Despite all the work going on in other technologies—work that I support—the viable nature of coal means that it will be used for power generation for many decades to come. That is acknowledged by the Integrated Pollution Prevention and Control, it was acknowledged in the Stern report and it was acknowledged recently by Tim Flannery.

The Hon. Rick Colless: And by Ross Garnaut.

The Hon. IAN MACDONALD: Yes, by Ross Garnaut and many others. I prefer to believe them than some report produced by Greenpeace, which has a history of exaggeration and alarmism on many of these issues. I draw the attention of members to an absolutely brilliant book written by Aynsley Kellow from the University of Tasmania entitled Science and Public Policy: The Virtuous Corruption of Virtual Environmental Science. It destroys many of the myths associated with hockey sticks, the bore hole analysis and tree rings—just about every claim that has been advanced on the so-called runaway climate change as distinct from variations in climate that have occurred over many centuries: the mediaeval warming, the middle ice age, et cetera. All those events took place, they are real, but there are cycles out there that we do not really understand. There are many ways of looking at this science. I suggest that members read this book. It does a demolition job on the alarmist's views on climate change. It is a fantastic book and I highly recommend it to members.

The decision by the Bush administration in the United States of America was politically based given that FutureGen decided to locate the project in Mattoon, Illinois, which just happened to be the home state of the Democrat presidential candidate. It was a clear-cut political decision after FutureGen rejected two sites in the state of Texas. It was quite clear from all the decent media reports at the time that as soon as the company made a decision to locate the site in Illinois the project was bombed and funding was withdrawn. However, $US687 million was kept in the fund for clean coal research.

Clean coal technology will be a concentration of scientific endeavour in this country for the next couple of decades. The issues will not be resolved overnight, but in many ways they will be incremental: 2 per cent and 3 per cent of changes and reductions will be very important to this process. Even if we move to the modern generation of turbines, which now have an efficiency capability of between 47 per cent to 51 per cent, we then will be driving our ability to sequester because savings through that efficiency are profound enough to be able to virtually fund most of the work in sequestering carbon in one form or another.

Biodiesel will go a long way to pay for algae solutions. By doing this important work, we are not criticising the other work being carried out. Another $100 million is available for renewables in one form or another. There is a vast array of different ways of going about this process, including demand management. Every one of these policies will come into play, but continuing to knock clean coal and the coal industry that denies any scientific endeavour to find a solution to carbon is destructive and will take this country and this State down a path to economic ruin. Sometimes after listening to the Greens I believe that that is precisely what they have in mind. I commend the bill to the House.

Question—That this bill be now read a second time—put.

Motion agreed to.

Bill read a second time.


Clause 1 to 4 agreed to.

Ms LEE RHIANNON [10.52 p.m.], by leave: I move Greens amendments Nos 1 to 5 in globo:

No. 1 Page 3, clause 5 (c), lines 11–13. Omit all words on those lines.

No. 2 Page 4, clause 7. Insert after line 5:

(3) The total amount paid from the Fund must never exceed twice the amount previously paid into the Fund by way of voluntary contributions of the kind referred to in section 6 (1) (e).

No. 3 Page 4, clause 8 (b), line 20. Omit "approved by the Treasurer". Insert instead "prescribed by the regulations".

No. 4 Page 5, clause 10 (1). Insert after line 11:

(c) one person appointed to represent environmental interests, being a person whom the Minister is satisfied:

(i) has qualifications and expertise in nature conservation, and

(ii) is independent of Government and the mining industry,

No. 5 Page 6, clause 13 (2), line 24. Insert "(being a member of the kind referred to in section 10 (1) (a))" after "Council".

Greens amendment No. 1 removes clause 5 (c) of the bill. Dr John Kaye and I have outlined in detail how this paragraph clearly illustrates the true intent of this legislation. This bill is about conning the public by presenting a public relations exercise. Clause 5 (c) states:

(c) to provide funding to increase public awareness and acceptance of the importance of reducing greenhouse emissions through the use of clean coal technologies.

By deleting this clause, we are not saying that the work on clean coal stops, even though once again the Minister has attempted to misrepresent the Greens. All we are saying is do the job on clean coal technology research, not this con job of misusing this money to run a public relations exercise, which is just a sell job for the coal industry. Let the Australian Coal Association pay for its own spin doctors, websites, glossy pamphlets, and television and radio advertisements to feed the white elephant that is clean coal. The public should not be forced to foot the bill for what amounts to an assault on future generations. It is utterly inappropriate and I believe probably unprecedented that the Government intends to spend a sizeable portion of the $100 million Clean Coal Fund on a public relations campaign.

The Minister in his second reading speech promised to explain how our argument was flawed, but he failed to deal with the public relations nature of the bill. Some of the clean coal technologies to which the fund refers are completely spurious greenhouse gas abatement measures. The New South Wales Government is failing miserably to meet its greenhouse gas emission targets and the Clean Coal Fund will make the situation worse because we are wasting public money rather than putting it into the many available clean energy measures.

Greens amendment No. 2 inserts clause 7 (3) into the bill to address the use of money from the fund. As I stated in my contribution to the second reading debate, public money should not be paid into this fund. The technology will benefit the coal industry and the Minister has acknowledged time and again that the coal industry is incredibly wealthy. Clearly, the industry should pay for the technology. Time and again the Minister has spoken about the importance of the work of the mining division of the Construction, Forestry, Mining, and Energy Union. Again I remind the Minister that the president of the mining division, Mr Maher, developed a clearly defined campaign requiring that the money for clean coal come from the industry and not from government. The Greens had talks with Mr Maher on this issue.

The Hon. Duncan Gay: Is this the Committee stage or still the second reading?

Ms LEE RHIANNON: I am not speaking in the second reading debate. I am definitely speaking about the Greens amendments. I am emphasising where the money comes from. I have outlined the relevance of the change we propose. This amendment will prevent the Government from spending public money invested in the fund unless or until the industry has at least matched the amount of money being spent from the fund. For example, if the industry has contributed $20,000 to the fund, then $20,000 of public contributions can also be spent. If no industry contributions remain in the fund, then public money would sit idle until a further industry contribution was received. The Minister has told me that he will not support any of the Greens amendments. This is a reasonable amendment that would require sensible use of public money and put more responsibility on the industry to come forth with money. Again, the Minister's failure to support this amendment illustrates the point I made in my contribution to the second reading debate: he is there to do the industry's bidding and not to look after the public's interest.

Greens amendment No. 3 relates to removing the power of the Minister to invest money in a fund approved by the Treasurer. If the Minister wishes to put money into the Clean Coal Fund in a manner other than authorised under the Public Authorities Financial Arrangements Act, the matter should be dealt with by regulation. This would afford greater transparency to the Parliament and to the public regarding any additional funds being invested in the Clean Coal Fund. This amendment removes the words "approved by the Treasurer" and inserts "prescribed by the regulations". Again, this is a more responsible measure that the Minister, if he had any decency and commitment to transparency and proper process, would easily support without jeopardising his beloved Clean Coal Fund.

Greens amendments Nos 4 and 5 deal with the appointment of an environmental representative to the Clean Coal Council. This bill establishes a Clean Coal Council of at least 10 members—five from government and five from the coal industry—to oversee the Clean Coal Fund. It allows the Minister also to make other appointments to the council. The Greens request that the Minister also appoint to the council at least one person with appropriate credentials to represent environmental concerns.

This is a minimal measure; it is certainly a measure that is regularly adopted in other areas. The person would be required to be independent from the Government or the mining industry, and have appropriate knowledge and experience in conservation. The purpose of our proposal is to balance the Government and industry representation and provide a community-based, environmental voice on the council. Given that the council will address matters with serious environmental consequences, it would clearly benefit from such expertise. As I said, it is a minimal measure; it will not undermine the Clean Coal Fund. I hope the Minister, when he comments on these amendments, has the courage to say what he is worried about. Having on the council just one independent voice with such a level of expertise would clearly benefit the work of the council. I commend Greens amendments Nos 1 to 5 to the Committee.

The Hon. IAN MACDONALD (Minister for Primary Industries, Minister for Energy, Minister for Mineral Resources, and Minister for State Development) [11.01 p.m.]: The Government opposes Greens amendments Nos 1 to 5. Greens amendment No. 1 attempts to remove a critical purpose of the Clean Coal Fund, which is to provide funding to increase public awareness and acceptance of the importance of reducing greenhouse gas emissions through the use of clean coal technologies. People need to be informed about programs in this area, and the Government's proposal is a method of doing so. I would anticipate that any expenditure in this area would be a small percentage of the funds allocated, rather than the grandiose sums suggested by Ms Lee Rhiannon.

Greens amendment No. 2 seeks to unreasonably constrain the way in which payments are made from the Clean Coal Fund. The Clean Coal Administration Bill establishes a fund to enable Government and the coal industry in New South Wales to work together to develop clean coal technologies, and for other purposes. The amendment has the potential to limit the contributions the New South Wales Government could make to sensible, ground-breaking projects if they are partly funded by industry or any other person or body. The amendment would impose an unreasonable constraint on the New South Wales Government and industry in working together through the Clean Coal Council to provide funding for clean coal technologies.

With regard to Greens amendment No. 3, it is appropriate that the Treasurer approve the investment of money in the fund, for which the Minister for Primary Industries does not have responsibility under the Public Authorities (Financial Arrangements) Act 1987. This is appropriate given that the Treasurer administers the Public Authorities (Financial Arrangements) Act 1987. I make it clear that the Treasurer acts within a regulatory framework. Greens amendment No. 4 proposes that a person be appointed to the Clean Coal Council to represent environmental interests. The membership of the Clean Coal Council is designed to ensure that people with high-level expertise in clean coal technologies from the industry sector and the New South Wales Government are able to work together. It is unclear how a person with qualifications as described by the Greens could contribute to this primary function.

The effect of Greens amendment No. 5 is that there must be a Government member of the council on any committee appointed under clause 13 of the bill. The council will determine on a case-by-case basis which member of the council should be appointed to any committees it establishes. This is an appropriate and flexible approach. For those reasons the Government does not support Greens amendments Nos 1 to 5.

The Hon. RICK COLLESS [11.03 p.m.]: Given the lateness of the hour and the Minister's explanation, all I need say is that the Coalition will not support any of the Greens amendments.

Question—That Greens amendments Nos 1 to 5 be agreed to—put.

The Committee divided. Question resolved in the negative.

Greens amendments Nos 1 to 5 negatived.

Clauses 5 to16 agreed to.

Schedule 1 agreed to.

Title agreed to.

Bill reported from Committee without amendment.

Motion by the Hon. Ian Macdonald agreed to:

That the report be adopted.

Report adopted.


The Hon. IAN MACDONALD (Minister for Primary Industries, Minister for Energy, Minister for Mineral Resources, and Minister for State Development) [11.12 p.m.]: I move:

That this bill be now read a third time.

Question—put.

The House divided.
Question resolved in the affirmative.

Bill read a third time and returned to the Legislative Assembly without amendment.