Guest essay by Eric Worrall
h/t JoNova – BHP, which last year derived 19% of its revenue from coal (p161, BHP annual report), has demanded industry bodies in which it participates embrace climate messaging or face a withdrawal of BHP support.
BHP Billiton breaks ties with World Coal Association over climate change, energy policy differences
BHP Billiton will remain a member of the Minerals Council of Australia for now but has decided to exit the World Coal Association over differences in climate and energy policy.
The stance follows a push by BHP investors in September for the company to review its relationship with industry bodies advocating “obstructive or misleading” policy positions on climate change and energy.
The Australasian Centre for Corporate Responsibility, a not-for profit association, filed a resolution at BHP’s annual general meeting seeking to end the Minerals Council membership, which attracted about 9 per cent of votes.
In a report published on Tuesday, BHP said a review of 21 industry association memberships showed it held materially different positions over climate and energy policy with three lobby groups — the Minerals Council, the US Chamber of Commerce and the World Coal Association.
Key among the issues is the Minerals Councils’ push for energy policy that prioritises costs and reliability over emissions reduction, and encouraging coal power plant development over other sources.
Despite this, BHP said it has decided to remain with the Minerals Council for now, given the high level of benefit it derives from the membership.
BHP’s statement and report are available here.
Does BHP intend to abandon the coal business? If BHP abandons coal, they may have an interesting time explaining to investors why they ditched an asset class which provides 19% of their revenue, and provided substantial revenue growth in the last financial year.
BHP’s posturing may be driven by concern about the direction of Australian politics.
The centre right Turnbull federal government has unsuccessfully attempted to straddle two chairs, supporting renewables and fossil fuels, to try to keep everyone happy.
The result, predictably, is nobody is happy. Greens think Turnbull is a sellout for not going 100% renewable, for trying to prevent coal plant closures which would have led to a colossal shortfall in dispatchable power capacity. Right wingers think Turnbull is a sellout for trying to pander to the green movement.
The infighting on the right has increased the possibility of a hard left green coalition winning power in next year’s Federal Election – a scenario which has already played out in the major Coal export state of Queensland. The newly re-elected left wing Queensland government immediately demonstrated its hostility to coal by making life more difficult for the Adani mine.
If greens conclude that BHP is running scared, attempting to appease them by making the right political noises, I doubt their demands will stop at a few climate friendly public statements.