Most Victorians could hardly imagine the scale of change in the region that supplies them with most of their electricity. The Latrobe Valley's vast brown coal reserves fuelled a power industry that employed more than 13,000 locals three decades ago. By 1995, almost three-quarters of the jobs had gone, the industry was privately owned and plans for new power stations had been shelved. The newest, Loy Yang A and B, were built 30 years ago. That is the context in which the Napthine government is making a last-gasp bid to attract investment in an energy resource that has lost its appeal. The world is turning away from greenhouse gas-emitting fuels, and brown coal is one of the worst.
Investors have long calculated brown coal isn't worth the risk. In 2002, the then Labor government tried to revive interest by granting three licences for low-emissions projects that it hoped would create thousands of jobs. The promised $8 billion investments came to nothing. Last year, the Coalition government sought expressions of interest in 13 billion tonnes of unallocated coal reserves. It appears to have found little interest even though, unlike its Labor predecessor, it is not insisting on clean-coal technologies. Now it is stepping up the pitch to investors. Deputy Premier Peter Ryan says: ''This coal resource has been spoken of for decades as being a clear competitive edge. We intend to find out the reality of that.''
The reality is that the resource no longer has the commercial value it once had – at least as a power-generating fuel. This was the case long before the carbon tax. Why else have no new stations been built to meet the soaring demand of recent decades? With the US and China moving to price carbon emissions, Australians should not kid themselves that such policy is a temporary, domestic aberration.
The locally dominated Latrobe Valley Transition Committee, which reported last year to the federal and state governments, saw little chance of new coal investment and accepted power generation was in decline. The report focused on alternative knowledge and innovation-driven development, as well as building on existing strengths such as agriculture.
In contrast to brown coal, Latrobe Valley farmland is an appreciating resource. Agriculture employs 2½ times as many people as the power industry and is blessed with some of the nation's most consistent rainfall. New coal leases would add to the threat of urban sprawl and subdivisions to this food bowl.
The government is right to promote regional development, but risks compromising the Latrobe Valley's prospects if it goes too far and offers excessive financial and regulatory incentives to investors now that brown coal's glory days are gone. The focus should be on the region's emerging strengths. Improve protection for farmland and promote the economic diversity and liveability of a community that is adjusting to life without the brown coal jobs on which the valley was built.