Yesterday, the French owners, ENGIE, announced they would be closing the Hazelwood brown coal power station in the Latrobe Valley, Victoria. Press announcements immediately focussed on job losses, the plight of the workers and possible future electricity price increases. But environmentalists – and hopefully the society – have been hoping and praying for this closure for YEARS! This is EXACTLY the type of jobs we want to lose, the type of industry we want to lose. This is a wonderful good news story. Let me explain.
From an environmental perspective, Hazelwood is the most emissions-intensive power plant in Victoria and I’m reliably informed, one of the worst in the whole world. Closing it has an immediate – positive – effect on carbon emissions, for the same power output. From a country perspective, as we seek to get to 100% (yes, 100%) renewable energy, plants like Hazelwood are dinosaurs and NEED to be closed down, sooner rather than later, to force us to focus on the future, which is renewables.
From a business perspective, the plant has been in run down phase for some time. A 2014 bushfire caused part of the plant to catch fire and the town of Morwell was engulfed in smoke for weeks, with significant respiratory problems. A class action for health issues from this fire was investigated, but did not proceed.
From an industry perspective, Hazelwood contributes 4% of Australia’s total electricity generation, but Australia has several more efficient generators which are underutlilised. And it has been clear for years that Hazelwood would close in the foreseeable future. This is not a major surprise, except the timing is quicker than might have been expected.
From an employment perspective, despite the headline ‘1,000 people’ in the Financial Review, Hazelwood actually employs around 450 people, with 300 contractors. Anyway, ENGIE has announced it will need around 250 people to close down and rehabilitate the site, this work running into the mid-2020s, so it seems only a net 200 people will lose their jobs…and they are said to be getting an AVERAGE of $330,000! Nice pay if you can get it!
From a contractor perspective, if you become a contractor you get higher pay, but have higher risk. Given the choice, most people are happy to take the contractor pay and the risk. In this case, the ultimate risk of loss of contract has occurred. But how many contractors are working 100% at ENGIE? The definition of a contractor for Australian tax purposes requires the person to have no more than 80% of their income from one source, so these contractors should have some other income sources.
From a timing perspective, the closure of Hazelwood has been speculated on for YEARS. People have had plenty of time to think about their options. Some/many will have already moved or changed jobs.
From a city perspective, BHP closed much larger steel mills in Woollongong and Newcastle and these cities managed to reinvent themselves, in the face of their single, very major employer closing. Geelong has done the same, losing Alcoa, Shell, Ford and International Harvester. Morwell should be able to evolve. Its community needs to be very proactive, but there ARE choices. In addition, the State government is providing $260m to the area for infrastructure, business incentives and worker support. Even the Federal government is supplying $43m. That’s more than $1m per job lost! I might just go and live there for the money!
Summary: This is Great News for the Country!
This is a wonderful example of media doom and gloom. Instead of reporting the great news of the closure of the most carbon-emissions intensive electricity generator in the country, we are fed the story of loss of some jobs that we knew were doomed anyway. Further, the number is exaggerated to make the negative story seem bigger. Of course we all feel sorry for people losing their jobs. But most working people these days have lost a job once or more and have experienced the need to reinvent ourselves. And very few of us received $300,000, government-paid counselling and more for something that should have been seen coming.
hubbardtalk 
Excellent article Graham. It is a great win for the environment and you are right about how the media always focuses on the negatives rather than positives. It’s unbelievable that Australia doesn’t have a plan to move to renewables isn’t it! But the impact on one of the most disadvantaged communities in Victoria will be profound. There has to be sustained investment in community building as well as new employment opportunities and in education.
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Thanks Sandie and I agree about the need to build the Latrobe Valley community. But this need has been there for a long time! It didn’t need the closure of Hazelwood to trigger it. Also, I wonder about the ability of the local councils in that area. Surely they can attract industries there if they focus correctly eg renewables, agriculture, research, tourism. I know nothing about it, but what I used to call the ‘eorta’ (‘They ought to’) attitude in Australia that someone else needs to fix the problem. You need to do a lot yourself to get problems addressed I think. But that’s a longer and wider debate!
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Thanks Graham for such a systematic checklist of arguments that inform, persuade and encourage further thought.
In that direction, what does puzzle me, given that the ‘inevitability factor’ has been so obvious for so long, is why no systematic proactive strategy had been prepared. Why was there no well advertised plan ready for regeneration from multilevel governance [including a cashed up State Government] together with joint ventures from a still profitable private extractive industry, to anticipate this major tipping point : to use a ‘crisis as an opportunity for radical restructuring’. Many coal mining communities under Mrs Thatcher, in the 1980’s UK, had such plans – often driven by their active metropolitan and regional governments.
The ‘local community’ in Morwell can hardly rely on newly compensated power workers, many in their later years of work, to reinvest their funds in the area. They might be expected take a rational calculation, maximise their desires and leave the area for better opportunities elsewhere – in Melbourne or warmer climes.
I suspect part of the answer for the plethora of reactive and unambitious responses to climate change in the peripheral regions of Victoria [and elsewhere] is the dominance of ‘rugged individualism’ amongst the energy and mining corporate interests and their ‘think tank ideologues’. Naomi Klein has put it well in yesterday’s Q&A – it is an act of denial for the need of a more regulated and co-ordinated public policy for climate change to meet the threatening demands of a now established ‘Paris’ global consensus.
This rapidly established Paris consensus, in turn, may well be no more than a prelude to the more fundamental question that is just being posed [conference on the purpose of work- Melbourne Uni?]. What might be the purposes of current economies [global to local] if, within 20 years, workers and professionals are not needed in an emerging ‘robotic global economy’. Maybe climate change can be reversed with ease, if we recognised [once and for all] that it is ‘workers’ of all kinds, at all levels and with all skills, that may be not needed in some of the scenarios now being drawn up for future global economies. Maybe measures should be taken to discourage any workers from ‘thriving’ and slowing down these inevitable futures. No more than giving evolution a helping hand.
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Thanks Basil for your comments. Dealing with the direct one of why was there no transition strategy, I agree. However, I don’t see that as a ‘government’ requirement, but a ‘society’ requirement. That is, the organisation, its people, its local town and the various levels of government should ALL have been thinking ‘transition’. The government should be thinking about the high level of unemployment that has been there for many years! But this is not suddenly triggered by Hazelwood. Sure, governments should help a community in this case, but I’m not thrilled at all by having $260-300m of taxpayer dollars thrown at the (very predictable) loss of 200-400 jobs.
Your other comments raise much more fundamental issues. I can’t start to comment on these or provide possible solutions within the context of this blog, but thanks for raising them, not just with me, but with blog readers. They are relevant for ‘rational thinking’, in the long term.
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Now we all agree; on expecting proactive strategies. Twas not always thus [the Hidden Hand of the Market will Provide]: it is my point that Australia’s recently acquired reputation for local inertia, is not due to some ‘natural and inbred’ community indolence but to an induced somnolence. One that is designed and very well funded by relevant corporates who can cut n’ run as they please, because even now, they can still socialise their losses, just as in the past they have been able to privatise their gains.
Today’s [9-11-2016] Guardian reports ‘A coalition of natural gas lobby groups are planning a coordinated campaign to convince Australians gas is “a long-term necessity”, top industry lobbyists have revealed.
They also disclosed plans to undermine government attempts to regulate sections of the industry that have been identified by the competition watchdog for price gouging by offering the federal environment minister “something he can announce” – but which would not amount to regulation.
The president of the Australian Pipeline and Gas Association, Shaun Reardon, told a meeting of the gas industry in Perth last month that the industry had agreed on a message to sell to the public, the industry website Energy News Bulletin reported.’
I also note that Ross Gittings in the Age today, has a piece on the environmental benefits of non-growth for modern economies.
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