Alternative to the CO2 Carbon Tax for the Steel Industry

Posted on : July 18, 2011

The current development of furnaces for steel manufacturing is changing – but not in Australia. BlueScope and One Steel cannot compete with the giants in Asia, USA, India and Europe.

The answer is a non coal fired furnace – called an Electric Arc Furnace – the images below are copied from mainly sites in China and India. The use electricity to produce molten iron used every day in the steel industry.

 

Electric Arc Furnace

Electric Arc Furnace Diagram

Electric Arc Furnace 2

Electric Arc Furnace 3

As you can see this is not dissimilar to providing the required temperatures to liquefy Iron Ore Oxide to Iron (steel) plus lots of other very technical processes. But the great thing about this it reduces the CO2 emissions by 50% plus (to be confirmed) but the source of power is excluded in this exercise. All of Chinese, Indian, American and European Steel producers are going down this avenue. It will become the dominating source of steel while the CO2 emissions are a problem to the globe. Why is Australia not looking at this technology – because coal is cheaper than the extremely high power charges already being charged? With the introduction of the Carbon Tax on Power Stations and Steel Manufacture – this technology will not be available to Australia and we will become the third world manufacturers (polluters of CO2) and eventually shut majority of these manufacturing companies down.

WHY? Because power is already expensive and will become more so with the CO2 Tax Introduction. How does Australia make power? The majority is coal and the government will make a fortune in revenue from this CO2 Tax along all supply lines. Why would they invest in alternate sources of power that do not produce any CO2? Because there isn’t a tax on it yet! What is this magical power supply that doesn’t emit any CO2?

 

Nuclear Power Stations

The below is a photo of a power station in Europe (includes Russia) that are simply producing large amounts of energy without the CO2 poisoning of the atmosphere.

Nuclear power plant

How do these magic power stations work – people in Australia haven’t seen one here because they are banned and will be for a long time with the sentiment that has been placed in this country since the early 1970’s. Nuclear Energy is very different from Nuclear Bombs! Have a look at the world today that uses nuclear power.

 

 

 

 

 

Nuclear power plant usage

 

The grey areas (that include Australia) have no reactors – WHY? Because of the fear that we will all die if something goes wrong. Nearly 40% of the world’s landmass population has access to nuclear power! We don’t and will not until there is a big shift in the acceptance by the Australian public of this power source.  If education is the key – then lobby groups from manufacturing industries will have to provide the input to start this process.

 

Australia Needs Affordable Power to Sustain its Economic Viability in Steel Manufacturing.

How can BlueScope and One Steel change (or even afford to research and develop) to this new technology? The simple answer is they will not. The CO2 Tax has just wiped it off the R&D board’s agenda at the annual production sustainability meeting. Australia cannot supply power for this process without utilising coal or gas. Wind, Solar, Geothermal, Wave and other renewable power supplies don’t compete with the economical supply of base load power that exists in Nuclear Power Supply.

Australia says on one hand – don’t use Nuclear power – but then says you pollute too much CO2 into the atmosphere – what are the steel companies going to do? Unlike TATA and other world steel giants they can’t use nuclear power from companies in China like the CHINA GUANGDONG NUCLEAR POWER COMPANY which supplies fuel (uranium fuel cells) to all of Chinas nuclear Power Stations. Where does the China Guangdong Nuclear Power Company get its Uranium Ore from? ANSWER is Australia. Aren’t we very clever? Sell it but don’t use it! The next good part of the story is that Energy Metals a 60.6% Chinese / Australian company was just granted a licence to export uranium from the Northern Territory to China for the next ten years.

 

WHY?

The questions raised are:

  • We can sell uranium for nuclear power but not to Australian companies for power production in Australia.
  • Over 50% ownership (by other countries) of uranium mines is allowed in Australia and they can sell it to whoever they want.
  • Nuclear power is very bad in Australia – but so is coal – we have to use wind, solar etc.
  • Cheap power, no CO2 polluting power (nuclear) and cheap, CO2 polluting power (coal) is not an option in Australia because one is banned and the other is taxed till it is no longer affordable.
  • How will the big manufacturers in steel, cement aluminium etc afford to develop new technology or even adapt to new technology if this CO2 tax is introduced.
  • Will everyone accept cheaper imports of overseas manufactured steel product to utilise in building etc?

How many manufacturing groups, associations, industry groups, federations, lobby groups etc are actually interested in saving this steel industry? I will be publishing a list of each group involved directly or indirectly of their involvement to date and also their intended involvement including “no comment” over the next few weeks.

This industry employs (directly & indirectly) the vast majority of Australian workers and this Tax and also the Ban on Nuclear Power will leave us behind.

I will leave you with two images – pick which ones are Australia and which one is China?

Australia

 

 

China

 

Where do we want to be in 100 years? 500 years? China is planning for the end of 3000 not 2012 like Australia.

Here’s the roofing perspective of all this – maybe pictures are easier to see the comparison?

The big question is which one is Australia and which one is China? A or B?

Picture A

Picture B

 

Email your answer to shed@shedeye.com.au and also if you require further technical data regarding this report or an RSS feed setup to your email address?

All industry Associations, Federations, Lobby Groups, Institutes or other interested parties please leave contact details at the above address.

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Sheds & Garages Increase Value!

Posted on : July 16, 2011

Buyers and Renters demand a Shed.

Properties that have a seperate workshop, shed or garage have an advantage over properties without, by demanding higher sell prices, additional rent and also increase the chance of a sale or rental. In regional areas where the mining boom is prevelant, real estate agents report the advantages to property owners of the contsruction of a double garage or shed. Investment properties are sort after with the shed as an extra.

Reported in The Australian Property Investor – the article relates to Queensland towns of Mackay, Gladstone and Bowen. The comment by local realtor David Bugeja recently ” the ones to sell fastest were the properties with sheds”. He also reported that for a capital outlay of approximately $12,000 in a shed or garage – this will add an expected increase of $20,000 to the sale price and an extra $20 per week in rent.

In the same article Mr. Tooma of The Shed Company Mackay said “for between $10,000 and $12,000 a fully erected shed can be placed on site with the approval certificate, earthworks and concrete done”.

Even A Small Shed adds Value

The property investor can purchase a property with an existing shed or simply add a double garage to a property without. The end result is an increase in capital gain within a short time period or a guaranteed extra rental income. As stated in the article – it is wise to check local council requirements as to approvals, easements, sewerage locations and location.

For an investment of as low as $12,000 for a double garage to return an additional $8,000 extra is an extremely attractive option.

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Shed – $5 million for 100 sqm!

Posted on : June 30, 2011

This shed in 2008 was the most expensive property in Australia – wonder if it still is?

The 100 square meter old tram shed at Cremorne Point was bought in 2001 for $780,000 and converted to a house by the owner several years later – see the news article.

It had stood vacant from 1991 until this sale transformed it to Australia’s most valuable property which is now rented. It overlooks Syndey Harbour with views of the Syndey Harbour Bridge.

$50,000 per Square Meter

Mr Gilmour, the head of Huntingdale Properties, is currently looking to rent his unique home.
He said living there had been wonderful but his family had now outgrown the house.

Even Mum, Dad and one child would be squashed in 100 sqaure meters.

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The End of Steel Manufacturing in Australia

Posted on : March 6, 2011

Shedeye previously printed Shed Prices to go sky High, it was clear that the steel manufacturing sector in Australia is under serious threat with the introduction of a Carbon tax on the industry.  Shedeye then showed the cold hard science behind the Steel shed industry and carbon.  Shedeye also proposed that rather than a tax, perhaps all ozzies with the room in their back yards should plant a gumtree!

Bluescope has responded to the threat by sending media releases to both the smh.com.au as reported Bluescope seeks exemption for manufacturing and www.theaustralian.com.au as reported Carbon tax plan threatens viability.

BlueScopes Steel managing director has stated

“The test has to be: can the price be passed through . . . if the price is not paid through, it is basically the end of steel manufacturing in Australia,”

and

“For emissions-intensive trade-exposed industries there should be no cost until our competitors face a cost and there certainly shouldn’t be a free ride for imports that sees manufacturers have to move their operations offshore and hide carbon in someone else’s backyard.

If the manufacturing sector does not get an exemption is the government going to impose tariffs on imported steel?  What a mess.

While BlueScope is in the business of making money and this involves lobbying and looking out for their own interests before all else, this is a clear case of the general public’s best interest.

The industry is threatened via big increases in shed prices, the disposable income of Australians is in serious trouble and even when the government starts to allocate the funds from the carbon tax (inefficiently and no doubt misappropriated), the damage may well have been done.

 

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Sheds – What happens with Carbon Tax or the ETS implementation?

Posted on : March 5, 2011

The home or domestic garage or shed has become an icon in the Australian backyard. Whether it is a normal 6 X 6 double door garage or a 3 x 9 storage shed – this industry will be affected by every single company involved in the manufacture of all the components of this iconic “SHED”.

So who are these companies that need to charge you more as a result of the Carbon Tax? They happen to be the biggest emitters of CO2 in Australia because we mine minerals (including coal etc) to manufacture simple things such as steel, aluminium, glass, cement, paint, timber (YES – these guys do emit CO2 to cut timber), carpet, plastic downpipes, electrical wiring, and the list is endless. All of these companies will have to increase prices in order to pay for the Carbon tax – and the answer is that you & I will pay. There is no alternative or secret formula in the production of steel for example – the operational side of steel producers are at the apex in efficiency in the world as far as CO2 emissions are concerned. Australian giant BlueScope and One Steel have the most efficient steel making plants in the World – so what happens when a Tax is added to the industry? The basic recipe for steel making is complex – yet simple in the chemical conversion – Iron Ore is represented by Fe the symbol the same as C represents Carbon – Oxygen is represented by the symbol O – and the process of steel making (Plus energy – coal furnaces) is as follows:

Iron Ore is represented by the symbol – FeO – (One atom of Iron plus one atom of Oxygen) and Carbon Monoxide is represented by CO – (one atom of carbon plus one atom of Oxygen) – this is chemistry and the conversion is represented by the following formula.

FeO + CO = Fe +  CO2 – all the numbers on both sides add up – but it is the heat required by burning coal or fuel to complete this process that the Carbon Tax will be implemented on. Because it takes 2 tonne of CO2 to make 1** Tonne of steel – the price will increase by exactly the Carbon Tax per tonne at the source. But – it doesn’t stop there – it needs to be rollformed, transported and erected. Don’t expect any change out of 16% to 30% per tonne at the end site and this is a conservative figure. Science currently does not have the answers to improve the process to reduce the CO2 emissions greatly – and the BlueScope website has plenty of information on exactly what has been discussed above. The end result is that it will be cheaper to import steel (finished product) along with all other building materials like Aluminium, cement, glass etc from countries (like China) that have no Carbon Tax.

This tax directly on manufacturing industries will be a major setback for the shed industry if they cannot afford to pay this tax – by either adaption or economically – to compete with imports. The result will be no more Australian Made – developed and innovated by Aussie industry – last but not least – a very sorry and diminished Shed Industry.

So if your shed is approximately 12 tonne of steel, concrete, plastic, glass, etc (the average weight of a 6 x 6 garage shed) – then why can’t you get a credit against this tax if you grow plants or store timber over the next five years (or whatever is deemed acceptable) to offset the emissions of the 29 to 40 tonnes of CO2 that has been released to the atmosphere to manufacture this shed.  For example a gum tree that has a height of 30 meters and a diameter of 800 millimetres and is three years old will have stored nearly 5.885 tonnes of CO2. In this case your shed would be paid for in carbon tax in 8 years approximately. It is the environment we are talking about – not CO2.

 

**Steel making requires a high heat – the furnace – they need CO for the conversion to molten Iron (the CO comes from the coal or furnace fuel) so less than one tonne is used in the conversion and the other plus tonne is used in the heat  = 2 tonnes. The price of carbon dioxide (not carbon) to make one tonne of steel – hence the carbon tax

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1 of the 11 commandments for analysing shed and garage quotes

Posted on : September 20, 2010

Make sure you are getting Australian quality BlueScope Steel.

Don’t believe everything you hear. Just because shed prices from one supplier are cheaper than that from another, doesn’t mean they are using inferior steel. Take a look at the relationships below, you will see that in fact most of these guys are sourcing steel from the same place!

Most of the shed distributors in Australia are sourcing their steel from BlueScope steel.  There are some companies that import steel from China, however be very careful in believing this statement.  Claiming that their competitors use cheap Chinese Steel is a tactic that distributors use to differentiate themselves and claim to have a superior product. This is in fact usually not true and most distributors in Australia source their steel indirectly from BlueScope steel.

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