How One Billionaire Could Keep Three Countries Hooked on Coal for Decades

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SYDNEY, Australia The vast, untapped coal reserve in northeastern Australia had for years been the object of desire for the Indian industrial giant Adani.

In June, when the Australian authorities granted the company approval to extract coal from the reserve, they weren’t just rewarding its lobbying and politicking, they were also opening the door for Adani to realize its grand plan for a coal supply chain that stretches across three countries.

Coal from the Australian operation, known as the Carmichael project, would be transported to India, where the company is building a new power plant for nearly $2 billion to produce electricity. That power would be sold next door in Bangladesh.

Adani’s victory in Australia helped to ensure that coal will remain woven into the economy and lives of those three countries, which together have a quarter of the planet’s population, for years, if not decades. This, despite warnings by scientists that reducing coal burning is key to staving off the most disastrous effects of climate change.

The story of Adani and its Australian project illustrates why the world keeps burning coal despite its profound danger — and despite falling prices for options like natural gas, wind and solar.

Coal is in steep decline in wealthier countries, including the United States and across Western Europe, mostly because of competition from those alternative energy sources. But in Asia, demand for coal, the main source of energy, is growing. That’s because it is plentiful, the appetite is huge and the alternatives are fewer.

Government support is also key to coal’s survival. Subsidies for coal-fired power plants have nearly tripled in recent years in the Group of 20 countries, according to a study by the Overseas Development Institute and two other groups. In rich countries, that’s helped to keep coal on life support. In developing countries, it means coal continues to thrive.

The $14 billion Adani Group — a sprawling conglomerate with interests in energy, agribusiness, real estate and defense, among other sectors — leveraged both business acumen and politics to realize its plan, securing generous support from the Indian government to build its latest coal-fired power plant.

The company’s founder, Gautam Adani, says criticism of coal use is unfair. “India doesn’t have a choice,” he said in a recent interview at company headquarters in Ahmedabad, India. Citing the affordability and reliability of coal, he said it was indispensable to feeding the energy demands of big developing countries.

Moreover, Mr. Adani said, “nation building” was part of his business philosophy. At the heart of that, he said, was the question of “how to make India energy secure.”

Regardless of whether India has a choice about coal, Mr. Adani’s empire of mines, cargo ships, ports and power plants depends heavily on it. And he has invested enormous effort to make sure coal will not go away anytime soon.

“This is the last gasp of the fossil fuel industry and they’re taking advantage of all the political capital they have to dig in,” said Rachel Cleetus, public policy director for the Union of Concerned Scientists. “Meanwhile, we are seeing climate impacts now.

From his headquarters in Ahmedabad, Mr. Adani schooled himself in the politics of Queensland, Australia’s second-largest state, 6,000 miles away. Then, when a national election was called in Australia for May this year, his team went into action.

Company representatives made the case to rural Queenslanders that they could gain from opening up the Galilee Basin, the vast coal seam that the Adani Group wanted to exploit.

Adani’s people held public meetings to explain how India’s thirst for coal could lift the area’s fortunes. They donated to community organizations, gave money to a basketball arena, made campaign contributions to politicians and hired former political aides to lobby on the company’s behalf.

“Opening up the Galilee is a tremendous opportunity for the region,” said Lucas Dow, chief executive of Adani’s Australia division. “The reality is that, if the coal doesn’t come from Australia or Queensland or the Galilee, it’s going to come from other jurisdictions.”

Coal mining has enriched Australia for decades. Ready markets in the fast-growing, energy-hungry economies of Asia have made it one of Australia’s biggest exports and it has traditionally enjoyed the backing of most major political parties.

Rising concern about climate change, though, has made coal a contentious issue in Australian politics over the last decade.

In the run-up to these elections, the country was battered by heat waves, drought and bush fires increasingly linked to climate change, and public opinion polls found that a majority of voters wanted tougher government action. Conservative politicians, in response, repeatedly warned that turning away from coal too abruptly would cost the Australian economy dearly — and that coal country, in Australia’s northeast, would hemorrhage jobs.

The Carmichael project became a symbol of that divide.

Yet before the election was called in April, the federal government sent a signal to those on the side of coal. It approved Adani’s groundwater plan for the Carmichael site, even though Australia’s national science agency had described the proposal as “not sufficiently robust.” The Australian Broadcasting Corporation reported that the government had leaned on the science agency to hasten its review of the plan.

While Mr. Adani leveraged local politics to beat those headwinds in Australia, the key to success in India was different. There, his company has demonstrated an unusual ability to extract good deals for itself and has thrived with the help of generous state backing.

On many levels, those good deals have come at the expense of some of the poorest people in the world, who inhale the pollution that coal-fired power plants produce, drink water tainted by ash, and, often, support those coal projects with their tax money.

Mr. Adani, a native of Gujarat State, began business there nearly 40 years ago as an importer and exporter, including of coal for state-owned power plants.

It wasn’t long before coal became central to his enterprise. India’s hunger to extend electricity to its people helped.

With land from the Gujarat government, the company built the country’s largest private port in the western city of Mundra and next to it, the country’s largest private coal-fired power plant.

It also built a close relationship to Narendra Modi, the man who, in 2001, became the top elected official in Gujarat, and, in 2014, the prime minister of India.

The Adani Group went on to build a necklace of ports along the Indian coastline, enabling it to deliver coal to virtually any part of the country. The company bought an Indonesian coal mine, and, in India, it acquired coal mining contracts across thousands of hectares in a vast and previously off-limits forest.

Soon, a concrete boundary wall went up. Then, makeshift offices. Then, a chilling message went out to locals who dared protest: The police charged five men, who did not want to give up their land, with criminal trespassing.

They’ve got the plot surrounded,” said Balis Pandit, one of the accused, who has migrated to another part of the country to find work. “There’s no way we can enter the land.”

Sahred From Source link Science

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