World's largest miner spooked by climate change
BHP Biliton rebuilds coal loader to cope with hurricanes, rising sea levels
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BHP Billiton – the mining giant with massive coal interests – is laying out its own cash rebuilding a coastal facility to cope with climate change.
Vulture South can’t claim any scoop on this – it was announced in an investor presentation on Monday December 3, so about half the world knows about it if they’re paying attention – and we’re quite happy to credit the fingers that typed the quickest as belonging to the Australian Financial Review.
But the irony of the story skips past “delicious”, pays a passing nod to schadenfraude and lands somewhere between “you’re kidding” and “too good to be true”, because the facility in question is a coal terminal. Here’s a salient quote:
“The potential for rising sea levels and more cyclones [hurricanes outside Australia] due to climate change was a factor in [BHP’s] decision to replace a jetty at its Hay Point coal export terminal”.
The company apparently left itself some wriggle-room with denier investors by leaving out the word “anthropogenic”.
However, it seems that when push comes to shove, when bean-counters, engineers and actuaries scream loud enough in the ears of their board, prudence holds sway. The AFR quotes a ranking BHP executive, BHP ferrous and coal head Marcus Randolph, thus:
“As we see more cyclone related events . . . the vulnerability of one of these facilities to a cyclone is quite high,” he said. “So we build a model saying this is how we see this impacting what the economics would be and used that with our board of directors to rebuild the facility to be more durable to climate change.”
“As these cyclones become more severe, we need to have facilities that are more able to withstand them,” he is further quoted as saying.
This doesn’t appear to be evidence of a sudden attack of hemp-wearing dope-smoking grant-sucking hippiedom in the world’s biggest hole-digger. It seems, for example, to still be happy to blur the issue with the cautious term “carbon intensity”.
While Randolph’s unequivocal statement about emissions is this: “An absolute ceiling is an absolute ceiling”, the investor briefing was told – as was the left-leaning (for a business newspaper) AFR – that BHP’s “carbon intensity” is “16 percent below 2006 levels” (meaning “we mine more stuff for other people to burn, while spending less on energy ourselves” – a perfectly sensible efficiency strategy).
The same report notes that the company is de-stressing its coal investments – significant in Australia, where governments across the political spectrum happily lend hands in the bucket brigade to send the black stuff to China at whatever price the Middle Kingdom is happy to pay. ®
COMMENTS
Re: Interesting
What's interesting is the long-term approach. Presumably they have looked at the bottom line and realised that it was considerably cheaper to continue to produce coal to be burnt (with all the resulting effects on climate chnage) and rebuild their terminal, than to stop mining coal altogether. Of course in their particular case they are only looking at their own little patch, and their conclusions are different from those that could be reached on a global scale.
Nevertheless, this is the correct approach to climate change - analyse as accurately as possible the consequences of different policies, and then select the best one based on cost vs predicted outcome.
Reducing carbon emmissions "at all costs" is not an ideal policy (can already be seen in, for example, feed-in tariffs), we need to be getting the most bang for our buck (eg switch fossil fuel subsidies to nuclear, increase cap-and-trade markets etc).
Cyclones
Actually, pretty much the entire southern hemisphere is imune to hurricanes. But we do get rather a lot of cyclones.
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