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The Forum > Article Comments > Is Australia following the General Motors strategy? > Comments

Is Australia following the General Motors strategy? : Comments

By Ben McNeil, published 3/6/2009

Australia's biggest export commodity today, coal, could become our biggest liability in the future: just ask General Motors.

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Two issues.
Europe has for decades had a policy of charging registration fee's on a vehicle's engine capacity.
This has lead to small fuel efficient cars from the time of the Mini.
Don't discount European engineering.
Second is to differentiate between thermal and metallurgical coal.
Coal is still required to turn iron ore into steel and there is a lot of steel still being produced so I would expect that high quality coking coal will still be needed for some time to come.
Unless of course you go to plastics in which case you need a petro- chemical industry.
Posted by Little Brother, Wednesday, 3 June 2009 10:42:03 AM
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Coal is too valuable as a reducing agent in metal production and as a feedstock in the chemical industry to be burned for its fuel value alone, particularly as world oil stocks becomes depleted. Peak oil production occurred in the USA fields in the early seventies and in the North Sea fields about ten years ago. The largest oil reserves are in the more expensive (to recover) oil sands and shales.
Exporting coal is exporting a capital asset and in the case of Australia this asset is being largely exchanged for current consumption.
Australia needs tariffs sufficient to protect worthwhile industries that reduce our dependence on importing from countries with slave labour conditions. For example, our steel industry is efficient but now has no white goods industry customers and a much reduced auto sheet industry market. I suspect that building and fastener steel is now largely imported. Our more worthwhile productive industries have been hollowed out by so called free trade much of which is really dumping until Australian domestic production is destroyed.
Between developed economies there are few real comparative advantages which justify free trade between them particularly when the fuel wastage and pollution of unnecessary sea freight is considered. Australia suffers one real comparative disadvantage in production of consumer goods, the large distances between our few large domestic markets in the state capitals.
Posted by Foyle, Wednesday, 3 June 2009 11:19:21 AM
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The statement 'Old coal canít compete with low carbon forms of energy like natural gas, hydro, geothermal, solar, wind, wave, tidal, biomass and nuclear' won't be valid for another 20 years or so until there are widespread shortages or penalties are imposed for CO2 emissions. Even though Australia appears to have over a century of coal reserves as does the US unchecked international demand will soon see the best reserves exhausted. Underground gasification of Australian coal (if it works) won't help a coal shortfall in China.

Coal exports show how the Australian government seriously doesn't get the idea of global carbon cuts. More infrastructure money will be made available for coal loaders and Wayne Swan predicates his 2011 economic rebound on increased coal exports. I suggest that coal exports should henceforth decline as a matter of policy, by say 2-3% a year. Charge higher prices if need be because I believe some other coal exporting countries (South Africa, Indonesia, Vietnam) will increasingly conserve coal for domestic use. Import customers will be forced in to lower carbon use.

The day may be sooner than we think that the Barrier Reef is bleached beyond recovery. We'll have money in the bank from coal exports and people will have jobs. Then the best coal will run out and there'll be no money and no jobs, but the Reef will still be buggered.
Posted by Taswegian, Wednesday, 3 June 2009 3:26:42 PM
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Is the lesson to be careful what you wish for because you just might get it? US carmakers got the lack of regulation they wanted whilst Japan's and Europe's got the imposed regulations they needed. Which proved more profitable? GM's lack of foresight and perhaps a culture of denial of environmental concerns has dumped GM in it and even under the new regime I suspect those won't have changed much. Despite the appearance of being better for business to dismiss them I think this clearly shows that failing to take resource and environmental concerns seriously is a failure that hurts businesses. Sorry guys but environmental concerns are mainstream concerns based on sound science and common sense. Those concerns have become solidly embedded in the middle, not fringe politics and if policy appears driven by the Green extreme it's a failing of the mainstream political parties to clearly make these issues their own.
Posted by Ken Fabos, Wednesday, 17 June 2009 9:23:21 AM
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Amazing, an article that talks about the decline and fall of certain automotive companies that doesn't mention once the role of unions (particularly in GM in the US) in their bankruptcy. Mr. Gattuso, your article is an example of the "single cause fallacy".
Posted by Sheriff__001, Saturday, 27 June 2009 4:11:35 PM
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