February 2008 Archives

Couldn't they think of something better?

A tactic to divert attention from tonight's Four Corners, and one that's failed dismally judging by the pre-publicity.

Imagine it's the middle of winter.

Walk into any Sydney pub or club sporting two or more TVs on a Saturday night. One will be tuned to the Rugby League. Invariably, any others will be showing any sport other than the AFL.

I'm constantly amazed that the punters would prefer to watch a marbles tournament rather that the indigenous football code, but that's the reality in Sydney. This city of five million can comfortably support one AFL team, but after two decades, the sport is still a curiosity to the majority of Sydney residents.

Support for a particular sporting code is a cultural phenomenon, one which propagates primarily from parent to child. Support for the Swans is growing slowly as the original supporters, ones like myself who gained their interest through some interstate connection, transfer that interest to their kids.

It's a slow process, but over 20 years the Swans may have gained enough rusted on fans to survive the immanent and inevitable form slump.

There's no way the city can support two mediocre teams.

The AFL hierarchy are dead wrong if they think that a second team can be introduced in Western Sydney within five years. Perhaps they'll avoid the mistakes made when the Swans relocated, but however they do it, they'll still be competing with the established Swans franchise for that rare Sydney commodity ... the committed AFL supporter.

Gerard Henderson in today's SMH remarked that conservatives don't do opposition well.

He's being a bit unfair on his team. It's not limited to the conservatives, they all struggle during the first term. What conservatives do well in opposition is never lose their 'born to rule' mentality.

This was shown all too clearly by Brendon Nelson's bleating about the lack of consultation over the content of tomorrow's "Stolen Generations" apology. Ignoring that they could have delivered the apology themselves, his attitude is particularly galling given the contempt they showed the other side when they were in power.

From where I stand, things couldn't be better. Rudd has deftly wedged the conservatives over the apology and in doing so, has probably condemned Nelson's leadership. He's already being compared to Simon Crean.

Brendon's about to learn the real pain of opposition.

Baring a Lazarus like comeback from Peter Costello, I'm going to enjoy the right wing of the Liberal Party coming to terms with promoting the only other viable leader, Malcolm Turnbull.

So much to look forward to!

With attention focussed on the amount of carbon dioxide (CO2) released into the atmosphere by coal fired power stations, coal mining companies are desperate to find ways of maintaining the viability of the industry in the era of CO2 induced climate change and carbon trading.

One method being considered is to use CO2 Geo-Sequestration, sometimes known as "Carbon Capture." It is one of a number of "Clean Coal" technologies that reduce CO2 emissions.

The concept's simple enough. Just capture the C02 after the coal's burnt, cool and compress it, then push it down the nearest convenient hole in the ground, where it will forever remain out of sight and out of mind. Sounds easy, but there are a number of difficult technical hurdles.

For a start, there's a lot of CO2 produced. The power stations in New South Wales burn millions of tons of coal a year. The weight of CO2 produced is 3.7 times the weight of the carbon in the coal. That's a hell of a lot of material to be safely disposed of.

Next, it's not that easy to separate the CO2 from the flue gas of a conventional power station. A lot of it is nitrogen plus other gasses which are largely inert in the combustion process, and you don't want to be adding those to the already large amount of CO2 you're trying to get rid of. For that reason, carbon capture may not be the 'bolt on solution' for conventional power stations that everyone hoped. It may mean building completely new plants that burn coal in pure oxygen, negating the need to separate the flue gasses, but markedly increasing the capital cost of the process.

And lastly, sites that can safely store the material are not readily available. Certain geological structures are required, and they're not always were the coal is burnt. If not close, the energy required to compress and transport the the CO2 to suitable sites will further increase the costs.

Despite the problems, Carbon Capture (along with nuclear energy) has been the darling of conservative governments. Until now.

THE [Australian] Government is facing a tough decision over whether to continue funding the world's leading clean coal experiment after the Bush Administration ended its commitment to the $US1.8 billion ($2 billion) project, citing massive budget blow-outs.

The US move is a grave setback for the Australian coal industry's hopes that a commercially-viable clean coal plant would be built in the foreseeable future. The US-led FutureGen project was embraced by the Howard government which pledged $15 million to it shortly before last year's election.

This is a surprising development considering that the current US administration is sympathetic to the fossil fuel industry. Not to be outdone, the former Australian government supported Carbon Capture at the expense of other environmentally friendly energy solutions.

Hopefully, this development marks the end to governments trying to pick green energy technology winners. If makes more sense for all technologies to be in the mix and receive equal opportunity to receive government research funding.

Who knows? Carbon capture may be a viable green technology, but it needs to be evaluated on an equal footing with all other technologies, whether they be nuclear or windmills.

Below is a diagram showing the state of the US Current Account deficit. It’s not a pretty sight. (Click to enlarge)

The economic good times we’ve been enjoying for the last decade or so has (arguably) been driven by the willingness of the US to go into debt. It’s certainly been good for Australia as we sell increasing amounts of raw materials to China to be manufactured into the goods that the Americans haven’t got the funds to buy.

A lot of experts have been sanguine about this situation, reasoning that it’s ok as long as the US can service the repayments. That, though, was before the Sub Prime lending fiasco, which threatens the foundations of the US economy. Worryingly, the US reaction to the Sub Prime crises is more of the same.

The fear of going into recession is understandable. However, it seems stupid to risk a much more serious consequences down the line by propping up the bad debts that caused the problem in the first place. Reducing interest rates and providing tax handouts will only make the debt problem worse. At some stage, US creditors are going to move to protect their money. If that happens in conjunction with rising energy prices, the recession we're desperately trying to avoid would have seemed very mild indeed.

Footnote: It’s interesting to note that the first dip in the graph above was a result of Ronald Reagan’s economic policies, and the subsequent recovery was the work of that “liberal” president, Bill Clinton. Who said conservative’s make better economic managers?