Trees for power generation
by Peter Mac Last week saw some disturbing developments regarding the commercialisation of state electricity and timber authorities. Tasmanian Greens Senator Bob Brown has slammed the logging of whole logs from native Australian forests for export, while plantation timber remains under-utilised. He pointed out that whole log exports rose by 90 per cent in the last financial year, while in Tasmania, Victoria and Western Australia plantation wood was not even considered as an option in the recent determination of the regional forests agreement (RFA). Senator Brown said that there was more than enough timber to meet Australia's needs if the logs were all processed here. He noted: "The government and the opposition should face the facts, abandon the discredited RFA process and start again with the realistic twin goals of developing a world competitive wood products industry, using the existing plantation estate, and protecting the world's most majestic native forests for all time." However, rather than supporting the preservation of native forests, the NSW Government is actually considering the use of timber from old growth State forests as an alternative power source for electricity generation. Apparently bereft of the will to develop alternative energy sources such as solar power or wind generation, the Government has stated that the use of timber as fuel would only involve waste products from timber milling and woodchipping. However, a proposal from the timber and electricity industry would see five per cent of the coal currently used for power generation being replaced with the equivalent heat from old growth timber. This would involve using some 1.5 million tonnes of timber, i.e. approximately twice the amount harvested each year for milling and chipping. Even allowing for the use of some waste timber from the existing timber harvesting, the proposal would result in a massive increase in the amount of old growth forests lost each year. The director of the Total Environment Centre, Jeff Angel, said that achieving the industry's goal of five percent replacement of coal as an energy source would require the equivalent of clear-felling an extra 15,000 hectares of forests per year. He commented: "Burning trees still gives off CO2. Burning trees for energy is taking us back to the dark ages. It's not green energy, it's prehistoric energy." The NSW Treasurer, Ted Egan, has justified the use of native forest timber for power generation on the basis of maintaining the commercial viability of NSW State Forests, revealing once again that the commercialisation of government organisations spells bad news for the taxpayer and the planet. Queensland In Queensland the commercialisation of the electricity industry has resulted in the catastrophic loss of $575 million by the state-owned power company Queensland Power Trading (QPT). Total shareholder funds as at June this year stood at $402 million. The Government has also lost some $400 million on "retailer subsidies", as part of the commercialisation process. And that's a conservative estimate. One analyst has stated that the final losses are likely to total between $1.1 billion and $2.2 billion. You might think that this result would lead to a reversal of the commercialisation process that has brought a once proud and efficient power utility to the brink of financial ruin. But no! In fact it's likely to have the opposite effect, if the major political parties have anything to do with it. In the past, the financial failure of commercially-oriented government organisations has been used to justify their sale to the private sector, and so it is in this case. QPT's 1999 annual report has already stated that the future of the company is being discussed with the Minister. And the private sector dogs are baying! With gross arrogance and blatant contempt for taxpayers, the Australian Financial Review's Ivor Ries this week wrote that: "... state (power) authorities, lacking street smart and vigilant shareholders, are unsuitable players in such high risk markets. "If the taxpayers of NSW and Queensland had half a brain between them, they would be clamouring for the sale of their electricity generators to private-sector owners who have a better handle on risk management. At this stage, there's no sign of that half a brain, in either State, either inside or outside their respective State parliaments." So where has all the money gone? A major part of the Queensland bill is for contracts entered into by the Borbridge Government to buy power from five private power companies, including two which use enormously expensive jet fuel as a power source! And who will foot the bill? The QPT shareholders? Not if they can help it! The power generating industry has already submitted a proposal to Federal cabinet that a special tax be imposed for electricity use. Although this has been promoted as in the interests of funding the development of alternative sources of energy, the chances are that it would be used for other purposes, for example, to dig commercialised state power companies out of financial holes, prior to their sale to the private sector. The taxpayers would be better advised to remove from office those who, while calling for greater efficiency for the taxpayer, have actually served the interests of the private sector in bringing about this appalling situation.