We need to talk about fossil fuel mining that’s powered by renewable energy
By: Ketan Joshi
Tags: Fossil Fuels, Bhp, Greenwashing, Climate Change, Mining

Is it safe to smoke at a tobacco farm? Are on-site buildings at an asbestos mine made out of asbestos? Are lunch breaks at the bullet factory filled with hootin’ and hollerin’ and wild firing of pistols into the air?

Is it meaningful when a company that produces something that damages human life refuses to use that thing in the process of producing it?

In climate, and in particular, in the space of shareholder activism, this is not an unfamiliar moral and ethical question. A company divesting from a harmful product while continuing to produce that product is an improvement from a baseline of ‘terrible’, but at the same time, that is used to mask or distract from actions could be more effective.

Fossil fuel companies pull carbon from the ground and sell it on. When it is burned, greenhouse gases move to the Earth’s atmosphere and oceans, trapping heat and dangerously tipping the planet from habitable to extremely unsafe. It is a business model that is, by default, hurting us. Our survival and our welfare depends entirely on the rate and scale of the erasure of the performance of this action.

It is, unsurprisingly, energy intensive to dig fossil fuels from the ground. Mines use diesel fuel trucked in from afar, or they aside some proportion of the stuff they dig from the ground to fuel further digging. The emissions footprint of a mine is split in three:

Scope 1 is fuel burned on site to run machines

Scope 2 is the emissions burned to make electricity supplied to the site

Scope 3 is the emissions that will be released when the fuel they sell is inevitably burned

It is the first two scopes that are the furthest from the core business of mining. Big shifts in power generation economics mean that renewables are now the cheapest option for generating electricity, making it logical for fossil fuel mining operations to switch to zero carbon options. This means the first two scopes sees decreases in emissions — the energy used to power fossil fuel extraction becomes low or zero emissions.

This switch can be serve as an immediate public relations hit; creating the impression that a fossil fuel company is moving to zero carbon options. Look to the “single largest coal-producing company in the world” for some inspiration:

This financial year, Coal India will be adding a whopping twelve megawatts of solar, according to the video above. That would offset roughly 0.026 megatonnes of CO2-e in one year. In 2015, Coal India’s carbon footprint, including from the coal it sells, was 1,025 megatonnes of CO2-e. Around 38,929 times the carbon saved by the company’s upcoming FY21 solar installations.

The vast majority of carbon burden for these companies comes from the impact created when the product they sell is used normally. We didn’t criticise tobacco companies because too many farmers were lighting up in the field, and we’re not criticising these companies solely because they’re using fossil fuels while producing fossil fuels.

Australia’s shift to clean pollution

Another example of this popped up more recently. On September 10, BHP, one of Australia’s biggest mining companies, is set to announce a swathe of new climate initatives. A few days ago, they teased some that tie in with the clean mining phenomenon above.

This popped up on my feed:

When I read that, I’m initially impressed. A 50% emissions reduction in less than five years? Not bad!

As you can guess, this framing is obscuring something important. In this particular case, BHP claims the total emissions displacement of this ‘50% by 2025’ agreement will be 1.7 megatonnes of CO2-e over four years, or about 0.4 per year.

Here’s that number, alongside the emissions the company creates when it burns fuel on site (scope 1), buys power (scope 2) and sells products that are burned (scope 3):

Wait, something’s gone wrong with the formatting there. It’s hard to see the emissions reductions from their renewables contracts in the context of their total emissions.

Let’s adjust the chart and make it a little bigger:

I’m being silly, but you get the point, right?

A yearly reduction of 0.4 MTCO2-e, in the context of a yearly emissions footprint of 247 MTCO2-e illustrates exactly what is going on here: the core conduit of harm is continuing unabated, while a minuscule, unrelated sliver of harm is being partially addressed — and that’s being sold as sufficiently ambitious.

BHP says that, on September 10, they will “ announce concrete steps towards reducing the company’s Scope 3 emissions”. In September 2019, ‘public goals’ for Scope 3 emissions were promised within 9 months. Part of the pressure on BHP comes from the Norwegian Sovereign Wealth Fund (my home town mega-investor; itself fuelled by oil and gas sales) announcing in June last year it’ll divest from any companies producing more than 20 million tonnes of coal per year. For FY19, BHP produced 70 million tonnes of coal (strangely enough, Norges Bank actually increased their ownership of BHP shares after putting the company on observation).

It is, of course, no bad thing to see greater quantities of clean power on Queensland’s grid. These machines reduce emissions. In 2019, the Clean Energy Regulator found that the government’s large scale renewable energy scheme reduced emissions by around 19 MTCO2-e.

Except, BHP obliterates that full year’s worth of abatement with a single month’s worth of fossil fuel extraction.

It made perfect sense, then, to see the name ‘Ian Macfarlane’ on the announcement. He is currently the Chief Executive of the Queensland Resources Council, but is formerly Australia’s Minister for Industry. He oversaw a very significant reduction in Australia’s renewable energy target, at one point threatening to walk out on negotiations with the renewable energy industry if they refused to accept the cut.

Someone with a deep history in stifling Australia’s clean energy industry would certainly find a safe home in cynically using renewables to launder the reputation of coal mining.

What should they do, then?

The bulk of emissions cuts needs to come from reductions in the quantities of fossil fuels extracted from the ground. Very few large fossil fuel companies are doing this. The closest so far is British oil and gas major BP, who are promising to cut their fossil fuel extraction by 40%, by the year 2030. That is still not aligned with the best science on how to obtain the safest possible planetary conditions, but it is miles ahead of the rest.

I’ll be impressed — genuinely impressed — when BHP starts doing precisely what it ought to be doing: shutting down its coal mines and using that scarred landscape to build large-scale solar and wind farms.

It is a thing we’ve seen in many places in the world. It is a wonderful solution to the challenges of building renewables in environmentally sensitive areas. It takes guts and grit, and I would gladly commend, in the strongest terms, any coal company that decided to do it. Shut it down. Slap solar on top. The Energy Transition site reports the following stunning statistic:

“Taking advantage of new solar radiation maps, and using spatial and other data developed by the European Commission, researchers came to the startling conclusion that if solar PV is deployed both on degraded mine lands as well as within mine boundary areas, their combined technical potential would add up to 62.2 GW with an anticipated production of 72.2 TWh per year of operation. However the full potential within the [Coal Regions in Transition] areas, including roof mounted PVs as well as available land, would reach 730.3 GW that could contribute a total 874.3 TWh, potentially replacing the total electricity output of the current coal power plants operating in the EU — which provide some 25% of the region’s energy (if sufficient flexible production and storage capacities are also added)”

(It’s been a tough year, so you may as well enjoy this 8.75 minute video of a 40 megawatt solar farm built in China atop a former coal mine, set inexplicably to pumping electronic music)

Solar should be replacing coal mines, not powering them. It is a dark and tragic story, to see renewables roped into powering the business that dwarfs their hard-earned emissions reductions.

Coal mining companies are not pivoting to a clean state of existence— they are creating a thin veneer of moral acceptability to coat an incredible risk to human safety. This will probably come at a severe cost of reducing public acceptance and love for renewables, if they become increasingly associated with powering environmentally harmful activities.

Keep it simple. Shut down fossil fuel extraction. Cover those sites with renewables and become truly grounded in safety and scientific reality. There’s still time to change the September 10 announcement! Don’t let us down.