Monash Energy

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Monash Energy proposed a coal-to-liquid fuel project incorporating Carbon Capture and Storage (CCS) near Loy Yang in Victoria's Latrobe Valley. which has been proposed by a joint venture of Shell and Anglo American. The project is proposed .[1] By 2008 there was uncertainty about whether the project would proceed any further and was described in media reports as being on hold.[2][3] In August 2012 The Age reported that in December 2011 the Victorian government had quietly cancelled the company's 50 year coal licence for failing to comply with project milestones.[4]

Background

In its corporate life since its formation in 1998, the company has been through various name changes. It started out as Australian Power & Energy Corporation, then Australian Power and Energy Limited, then Monash Energy Holdings and, most recently, Monash Energy Coal Limited.[5]

APEL was a project-specific company. The company proposed to build a $6 billion power plant that will turn coal into gas, producing liquid fuels and generate electricity, with the carbon dioxide being geosequested.[6]

APEL says its electricity generator will produce only 25 per cent of the greenhouse gases released into the atmosphere by existing brown coal plants. APEL chief executive officer, Pearce Bowman, stated: "it would take two years for the company to complete feasibility studies… and prove it could pass the necessary State Government and environmental approvals. It would take another three years to build the project - which means the plant will not be commissioned before 2007."[7]

In 2003, APEL, with its value now greatly increased, sold 20 per cent of the company to Anglo American for an undisclosed price. In 2004, Anglo bought out the remaining 80 per cent, for what one source says was a fee of $52 million, of which Alan Blood received about $20 million.[8]

Another source however, says that the company sold for a total of more than $100 million, with an undisclosed amount going directly to Alan Blood.[9]

Anglo then went into a joint venture with Shell to form Monash Energy. In 2006, Monash Energy re-announced what was essentially the original proposals: a new coal mine, drying and gasification plant, carbon dioxide capture and storage and a gas-to-liquids plan,[10] to be operational by 2008.[8] A year later in 2009, a company source said of the project: "it's not commercially viable."[9]

Despite expired deadlines and unmet promises, the State Government upgraded Monash’s exploration license to a mining license. The granting of a mining license is a decision made at the discretion of the Minister "based on the company meeting all its requirements",[11] However, in the background information on the 2002 coal allocation tender the government had stated that "mining licenses will not even be considered until successful tenderers have completed all the research and development required as a condition of the exploration license."[12]

Documentation demonstrating these conditions have been met, or otherwise, is not available to the public. It is however known, as outlined below, that the CCS component of the project is not viable. The APEL-Monash Energy 2002 coal allocation project commitments have not materialized.

Coal allocation cancelled

The Age reported that in December 2011 the Victorian government had cancelled a 50-year brown coal licence which had been allocated to Monash Energy, a consortium of Anglo American and Shell. The Age reported that "the licence was cancelled after Monash failed to comply with milestone conditions."[4] The Victorian government is currently preparing a new round of brown coal allocations with the aim of expanding domestic brown coal use and developing an export market.

Environment Victoria's Mark Wakeham said "If large companies like Shell and Anglo American can't deliver on their so-called 'clean coal' projects, what hope do tiny players like Exergen [which is also seeking a new coal allocation] have?". Megan Davison, from the Minerals Council of Australia defended the government's plans for a new coal allocation on the grounds that without further exploration "Victoria will not know what potential can be realised through its development."[4]

Articles and resources

References

  1. Shell Energy Investments Australia and Anglo American, "Shell and Anglo American Join Forces to progress an Australian clean coal to liquids project", Media Release, September 21, 2006.
  2. Angela Macdonald-Smith, "Shell, Anglo to Delay A$5 Billion Clean Fuels Project (Update2)", Bloomberg, December 2, 2008.
  3. Alex Wilson, "Shell, Anglo put CTL project on hold", The Australian, December 2, 2008.
  4. 4.0 4.1 4.2 Tom Arup, "Black mark for clean brown coal", The Age, August 13, 2012.
  5. Australian Securities and Investment Commission, "Organisations & Business Names: Monash Energy Coal Limited", Australian Securities and Investment Commission website, accessed August 2012.
  6. Candy Broad, Minister for Energy and Resources, "Green Technologies flow from brown coal tenders", Media Release, July 17, 2002.
  7. Stephen Dabkowski, Rod Myer, "Coal deals worth billions to boost power and jobs", The Age, July 18 2002.
  8. 8.0 8.1 Rod Myer, "Anglo buys rest of APEL pie"], The Age, September 14, 2004.
  9. 9.0 9.1 Royce Millar, "The high price for coal's Holy Grail", The Age, November 4, 2009.
  10. Barry FitzGerald , "Anglo signs Shell to Latrobe brown coal project", Sydney Morning Herald, May 30, 2006.
  11. Sean Rooney, Acting Director Business Development & Technology, Earth Resources Division, Department of Primary Industries, Personal Comment to Environment Victoria, November 20, 2009.
  12. Department of Natural Resources and Environment, "Energy and Minerals Fact Sheet: How the Tender Process will Work", Victorian Government, 2001-2002. (This document is not available online but is archived in the National Library of Australia dn the State Library of Victoria).

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