Lignite: dirty brown forbidden fruit

by Bryan Walker on February 20, 2011

Two items during this week highlighted the continuing progress of Solid Energy’s intentions to develop the Southland lignite fields. I therefore provide this depressing update to two Hot Topic posts on the issue late last year. Don Elder (left), CEO of state-owned enterprise Solid Energy, appeared before the Commerce select committee during the week and announced that the proposed lignite developments will be worth billions. And it appears that this will be the case even if they don’t receive free carbon credits under the ETS, which they appear to nevertheless hope for. There was a slight acknowledgement that there were carbon footprint issues still to be resolved and some soothing suggestions, reported in the Otago Daily Times, that approaches such as mixing synthetic diesel with biofuels, carbon capture and storage, and planting trees, could reduce the net emissions. With a convenient fall-back – that the company could pay someone elsewhere in the world to do this for it. There is little evidence that carbon capture and storage will feature as anything more than talk in this scenario. The wildest extremity of the CCS option was touched on outside the committee when Elder spoke of the possibility of eventually piping carbon out to sea and pumping it into sea-floor oil or gas wells, after the Great South Basin has been developed.

Claire Browning at Pundit describes in lively language being present at the committee hearing. She was fascinated by Solid Energy’s definition of sustainability:

“For our business to be sustainable in the long term we must carry out all our activities in ways that achieve our current business objectives without unreasonably compromising our ability to meet our future objectives”

Rather circular by comparison with what is normally understood by sustainability, as in this UN statement for example:

“Sustainable Development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Browning’s excellent discussion also draws attention to the fact that Solid Energy has at long last, under pressure from the Ombudsman, released lignite pollution estimates to WWF showing that the lignite-to-diesel fuel proposals would produce emissions at double the level of already-polluting conventional diesel. The WWF’s response is on its website. Browning also refers to the Parliamentary Commissioner for the Environment’s carefully researched report in December in which she gave a clear thumb down to any proposals to develop lignite. Elder claims that the Commissioner’s report failed to address the economics of the proposals, which she evidently doesn’t understand. How economics can trump environmental concerns is presumably a lesson she has yet to learn.

Gerry Brownlee has learned that lesson well, of course, and in question time in the House this week he both acknowledged the magnitude of the emissions from the proposed lignite developments and pointed to the ETS as a way of coping with them. Asked by Green MP Kennedy Graham (who blogs on the issue at Frogblog here) by how many tonnes Solid Energy’s proposed lignite projects in Southland would increase New Zealand’s gross greenhouse gas emissions in 2020 he replied that depending on the scale of technology used, gross emissions could be 10 million to 20 million tonnes per annum. He then immediately added that Solid Energy has said on many occasions that taking full responsibility for greenhouse gas emissions is a key consideration in its lignite developments and it expects its lignite-based plants to achieve full carbon compliance. Asked whether, if by that he meant carbon capture and storage, he could name one suitable reservoir to store carbon dioxide in the Southland lignite region, Brownlee replied that he couldn’t give operational answers on behalf of Solid Energy. But the fact that he immediately added that the government has introduced an emissions trading scheme that will enable carbon compliance suggests that CCS doesn’t matter anyway.

It’s important to appreciate the relative quantity of the increased greenhouse gas emissions which will result from the proposed lignite development. According to the Ministry for the Environment figures, in 2008 New Zealand’s total greenhouse gas emissions were 74.7 million tonnes of carbon dioxide equivalent. The 10 to 20 million tonnes extra from lignite is not a minor addition. It is very large, and since in 2008 we were already 23 per cent up on 1990 levels it’s very difficult to understand how the government can be talking of a 10-20 per cent reduction on 1990 levels by 2020 at the same time as smoothing the way for the exploitation of lignite.

If the ETS is not stringent enough to make the lignite proposals uneconomic then the government should be resorting to regulation. Market-based systems are not sacrosanct. The government’s hands are not tied. It’s absurd that so-called carbon compliance should be compatible with this dangerous development.

What about the economic opportunity we are missing? To my mind it would simply be a bank we hadn’t robbed. We would be missing out on the proceeds of crime. Is that being melodramatic? Not as I see it. It’s not as if the lignite development falls into the category of an unavoidable measure to keep us turning over while we make the transition to renewable energy. There’s no interim necessity attached to it. It’s simply a tempting fruit. And a forbidden one if we have any sense of the consequences which flow from plucking it.

{ 28 comments… read them below or add one }

Byron Smith February 20, 2011 at 12:09 pm

What about the economic opportunity we are missing? To my mind it would simply be a bank we hadn’t robbed
Nice image.

G. Thomas Farmer, Ph.D. February 20, 2011 at 3:17 pm

These CEOs like Elder and politicians (Republicans) like we have in the US House have to be ridiculed and made out to be the asses that they truly are! If we could send these people to Venus and let them breathe the CO2 there for awhile. There is no easy answer. I’m open to all suggestions. How do we educate idiots, or those who refuse to educate themselves, or those with vested interests, or those in positions of power?

Mike Palin February 20, 2011 at 7:52 pm

I am absolutely against developing the Southland lignite deposits, but it is inappropriate to compare Elder, CEO of a state-owned enterprise, with denialist politicians such as populate the Republican Party in the USA.

Elder has acknowledged the reality and scale of CO2 emissions that would accompany development of the Southland lignite deposits and given assurances that the company honour its obligations under existing law. His company, Solid Energy, should be directed by its principal shareholder – the people of NZ through their government – not to invest in this dirtiest of all fossil fuels, and “free” carbon credits under the ETS should not be used for any new carbon-intensive development of this type. Hopefully, the upcoming election will allow an opportunity for both of these issues to be addressed.

On the other hand, Republicans in the USA are mostly stupid, willfully ignorant, or downright malicious individuals bent on maintaining their power no matter the cost. They have shown no remorse in sacrificing thousands of young Americans and wasting trillions of dollars in pointless wars in far-away lands. They are criminals, no more, no less.

R2D2 February 20, 2011 at 8:15 pm

Last time I checked the Democrats hadn’t dramatically changed the policy on the Middle East.

I think the current events in Tunisia, Egypt, Libya, Bahrain, Yemen and other Middle East / North Africa dictatorships are amazing – possibly the largest rising up of people demanding democracy at once (geography wise) in history.

That the USA, and the rest of the west, can spend billions of dollars and thousands of lives on ‘democracy in the Middle East’ in wars in Iraq and Afghanistan, but has given such a limp response to these uprisings is tragic in my mind. And this issue is wider than Democrat / Republican or Labour / National. It is ingrained in the poor connection most westerners have to the people living in third world dictatorships. We seem unable to reach out to them as brothers, only able to attack them with remote controlled missiles. And then when they show a passion for change we show distrust and indecision.

Sorry for the rant, but its something I feel passionate about at the moment. Realise its off topic, but we can probably mostly agree on this one.

Thomas February 21, 2011 at 6:16 pm

At least a unreserved thumbs up for R2D2!

Bob Bingham February 20, 2011 at 4:40 pm

Carbon capture is a farce which is mentioned at planing meetings to give creditability to coal burning. Coal is around 70% carbon and when it burns it produces 2.3 times the amount of CO2. Roughly, every ton of coal burnt produces two tons of CO2.
To give an idea of the scale, a classic 1 Giga watt coal plant like Huntley burns 10,000 tons a DAY at full operation. Getting rid of 20.000 tons of CO2 a day turns a cheap fuel into an expensive one which is why nobody does it.

Macro February 20, 2011 at 9:52 pm

Carbon Capture is really a non starter for such an operation. And who wants to live next to a large dump of CO2? eg
http://news.bbc.co.uk/onthisday/hi/dates/stories/august/21/newsid_3380000/3380803.stm
Piping it out to sea? But we haven’t even started drilling oils wells yet! Get real!
So storage is just pie in the sky – weazle words with no meaning. That means offsets someway or other. But offsets really offset nothing. The trees are but temporary storage for fossil carbon. The loading of CO2 being released increases despite our efforts. Leave the lignite where it is.
The result of picking the forbidden fruit last time was to be cast out of Eden, and the same result will eventuate here. The cleansing of the Earth was a great flood reportedly 10000 + ? years ago (unprecedented I believe ;) ) and the same will be the case this time too.

Mike Palin February 21, 2011 at 11:37 am

Not necessarily. Deep (> 3 km) ocean floor storage of liquid CO2 may be an option (see this ref). It certainly is not desirable, but if alternatives to fossil fuels are not implemented soon, then some type of CO2 capture and storage will have to be used. Again, I am not advocating development of the Southland (or anywhere else) lignite deposits.

nommopilot February 21, 2011 at 5:48 pm

how much energy do you think it might take to pump CO2 to the ocean floor and keep it there? more or less than will be gained from mining and processing lignite? CCS is dead in the water because when they actually figure out how to do it, the energy it takes to do it will probably be greater than that realised by burning the fuel in the first place. CCS is a wet dream for those who still think some miraculous energy source is just about to come on stream and save us.
It’s kind of like racking up ever more debt because you’re convinced you’ll win lotto any day now…

Mike Palin February 21, 2011 at 7:05 pm

Read the reference and you might learn something. Ken Caldiera is no dummy. Multiple means of CCS need to be field tested, not to justify developing dirty lignite in NZ, but because China, USA, India and Russia show no signs of slowing down their use of coal.

Get a clue. It’s going to take everything we have and then some to help us avoid the worst of AGW. That means parallel development of nuclear, wind, solar, tidal, insulation, conservation, and, yes, whatever new technology we’re lucky enough to encounter along the way.

Macro February 21, 2011 at 9:50 pm

Mike
Thanks for that interesting and useful reference. Yes I can see that it is feasible for Ocean floor Carbon storage, but for NZ a couple of problems spring to mind however.
a. It really hasn’t been done yet in any large scale. (Do we really want to be the guinea pigs for a somewhat contentious solution?)
b. The seabed around Dunedin/Invercargill. Yes, there is the Bounty Trough and Bounty Channel running in towards Dunedin and the Solander Trough running up to Invercargill – but its a still quite a way out to the 3000m depth required. Past Stewart Island and the Snares in the South, and almost to the Bounty Islands to the East.
c. The slurry would pass along the sea bed killing all in its path. No more Bluff oysters. (I wonder if Gerry has thought about that?!)
Just a few objections on first reading – I’m sure there are others. Just as it’s difficult to site wind farms for environmental reasons then dumping CO2 in the ocean will have just as bumpy a ride. I’m sure Roger D will have some objection. He doesn’t like the idea of concrete and steel in the Kiapara. ;)

AndrewH February 21, 2011 at 12:45 pm

I’m no fan of digging up lignite either. But, if it is done without any free emission unit allocations and with carbon neutrality achieved by appropriate, properly audited means then, why not?

Isn’t this the same as any one of us planting trees to offset our personal emissions. Most of us fly once in a while (Tom Bennion excepted). And isn’t it better than present day where most of our transport fuel emissions are not offset at all.

I have talked to a few farmers about planting forests for carbon sequestration. They like the idea but are not sure the credits will keep on coming. If Solid Energy were propping up the demand side of the market (preferably within NZ) we could see a lot more confidence in the future of forest sinks.

Thomas February 21, 2011 at 6:22 pm

Aren’t many of these tree planting offset programs simply an act of delayed release when the trees planted will eventually rot or otherwise release the soaked up CO2?
Geologically removed Carbon will remain in the bio-cycle until restored to geological storage as far as I am concerned.

John D February 21, 2011 at 6:29 pm

So, Thomas, you are in essence saying that the ETS, and programmes such as REDD, are misguided. Correct?

Thomas February 21, 2011 at 9:10 pm

No, the ETS is not misguided and that is not what I said. The ETS primarily works to force emitters to see tangible costs for their emissions while benefiting those who invest in cleaner technologies that reduce and avoid emissions.
I said that I am doubtful that tree planting will be a true offset for coal digging though. It would be better to advance alternative energy projects and cause actual emissions reductions. Tree planting is no excuse for emitting!

John D February 22, 2011 at 9:09 am

Thomas,
On these points I tend to agree with you. I would prefer to see monies from ETS diverted to common good projects such as home insulation and other clean tech. (Making the a priori assumption that an ETS is necessary).

As for penalising fossil fuel consumers, I don’t see how the ETS will provide any incentive whatsoever. The renewables sector get windfall profits from an increased electricity price across the board (by the nature of the electricity market), so if your portfolio has a mix of FF and renewables weighted towards the latter, you win). The increased costs associated with the ETS just get passed onto the consumer.

Doug Mackie February 21, 2011 at 10:16 pm

‘John D’, I responded to your request some days ago.
http://hot-topic.co.nz/institutional-lemmings/#comment-24362

AndrewH February 21, 2011 at 8:38 pm

Yep – but that should be accounted for. Harvested trees will have to pay for EU’s until a new crop is planted.

Permanent forests will accumulate carbon for a long time (permanently even!) even though individual trees will die.

I haven’t tried doing the maths on how much area would need to be afforested to cover the lignite emissions and this could be a fatal flaw. Any takers?

R2D2 February 21, 2011 at 11:47 pm

Pine: 800 tonne per hectare after 30 years. Lets say 10 million tonnes per year, to run the plant for 30 years you would need 375,000 hectares of new forest. Following the 30 years of operation you would need to ensure the land was never harvested.

Native: Didn’t see natives in look up table doc but presume the rate is slower, the total similar.

The full life of pine was 1,200 tonnes per hectare after 50 years (would require 625,000 hectares if plant was run that long).

Wouldn’t tying acres of land up in pine forest be an environmental disaster of its own?

Mr February February 21, 2011 at 3:15 pm

Andrew, That is a good comment. I hope this is a good response. The critical thing is to be absolutely clear about what the phrase “with carbon neutrality achieved by appropriate, properly audited means” actually means in terms of the physics of actual emissions in the future.

Brownlee is clearly saying in Parliament “lignite development by Solid Energy can happen irrespective of the NZETS, therefore it complies with the NZETS, therefore the lignite proposal can be regarded as ‘carbon compliant’ “.

Okay, never mind what we actually think of Brownlee’s view on its face, we need to ask ourselves “Is complying with the NZETS good enough?”. For me the answer is “NO”, because:
1) the NZETS enables increases in gross GHG emissions by being uncapped. (NB yes the whole point of an ETS is that is capped. That there is scarcity of permits and an effective price on GHGs)
2) the NZETS enables increases in gross GHG emissions by allocating all emissions units for free to emitters without any auctions.
3) the NZETS enables increases in gross GHG emissions by allowing the unlimited importing of overseas emissions units.

Even without an allocation of free emissions units, Solid Energy don’t have to do much to develop the lignite and comply with the NZETS.

Even Bill English thinks so. Stuff records this statement in Gore The Emissions Trading Scheme, while copping a lot of criticism, was important to attract capital investment especially for high- carbon resources, he said.

AndrewH February 21, 2011 at 8:32 pm

Thanks Mr F

Agreed the NZETS isn’t necessarily an appropriate mechanism but it is a step in the right direction and could be tightened up when a government gets up the intestinal fortitude (or feels compelled to do the right thing having exhausted all other options).

Any big carbon emitter having a long term prospect in mind would be planning around this contingency (one would hope)

Andrew

Bryan Walker February 21, 2011 at 3:54 pm

In support of Mr February’s comment I might add that Brownlee in his letter of reply to me (and no doubt to many others) when I complained about the project pointed out that the ETS has no cap and, as he put it, “hence is not prescriptive about what developments should or should not progress”.

Macro February 21, 2011 at 10:09 pm

Actually any “Cap and Trade” scheme doesn’t really work in the goal of reducing the burning of FF. It’s merely a sop to the market orientated economy and supposedly makes us feel good. You cannot “offset” burning geologically stored carbon. Thomas has it right when he says above: “Geologically removed Carbon will remain in the bio-cycle until restored to geological storage as far as I am concerned.”
By all means we must encourage the continued replanting of our forests, but they cannot be the magic bullet. The Carbon released in the burning of FF remains in the bio-cycle – unless it is sequested somewhere.

AndrewH February 21, 2011 at 11:04 pm

Sorry, I had missed Thomas’ use of “biosphere” so he is quite correct. But having carbon in the biosphere isn’t necessarily a bad thing as long as it keeps mostly out of the atmosphere part.

I guess my thinking on this has been influenced by the likes of the late Peter Read, formerly of Massey University. His paper “Global Gardening with a leaky bucket” seems to encapsulate some of the stuff I heard in a lecture from him

R2D2 February 21, 2011 at 11:50 pm

You really don’t like anything related to economic theory do you.

The purpose of an emissions trading scheme, rather than regulation, is to allow the market to find the cheapest abatement.

If it was a capped scheme the market price would also rise until the desired level of reductions occured, but the NZ ETS is not ‘cap’ and trade.

Macro February 22, 2011 at 4:27 pm

“but the NZ ETS is not ‘cap’ and trade”
I know its not – which makes it even more useless!
I’ve given you the reasons why I’m not devoted to conventional economic theory. It’s based on fundamentally unsound principles. I’m not opposed to economics as such. Just the veneration of the market that those steeped in neo-liberal policies espouse.
To my mind the most effective and efficient means of signaling to the market to cut back on Carbon is a Carbon Tax – taxed at source – with the proceeds of that Tax going towards mitigation and efficiency schemes and alternative energy sources. (Such as the social security tax on income that was directed to funding social security schemes in NZ. People knew what they were paying for and where that money was going.)

sime February 22, 2011 at 8:21 am
Mr February February 22, 2011 at 2:14 pm

@AndrewH

I too used to think the NZETS was “a step in the right direction”. I don’t think that now.

There is this argument: “Even with an admittedly weak NZETS with no cap and too much free allocation of units, the NZETS is doing some good as surely no business would now invest capital for more than 30 years in fossil fuel power generation”

Actually businesses are still investing in fossil fuel infrastructure. Todd Energy has a plan for a 100 MW gas-fired power station (cost $100 million). In 2009, Fonterra added a new dehydrator at the Edendale plant which increased the plants use of lignite by 60%, Fonterra is also planning a new dairy plant at Darfield, Canterbury which will have a coal boiler.

GHG emissions won’t be reduced let alone ‘capped’ if businesses still regard investing in fossil fuel thermal power as their cheapest option (in spite of an NZETS). How can an ETS for GHGs be described as effective if fossil fuel thermal power is still feasible?

Presumably Fonterra and Todd Energy (much like Solid Energy) will say that their plants will be “fully carbon compliant” and that all environmental impacts will be addressed. I assume they mean in the resource consent process. I don’t know how well known this is.. but the Resource Management Act will give them a free ride. The RMA was amended in 2004, and Section 104E prohibits councils or the Environment Court from considering the effects of GHG emissions.. So for any new emissions process, GHG emissions are now irrelevant under the RMA. The GHG emitters get an opportunity to say “But we have a resource consent”, even though climate change impacts and GHGS were not allowed to be considered. Why were GHG emissions treated differently from sulphur dioxide or anything else? Because NZ had a Climate Change Response Act and plans for an ETS.

So, on those arguments, my conclusion is that the NZETS in its current form is actually worse than not having an ETS at all. The NZETS is now just a fig-leaf of fake respectability for NZ’s developed world GHG intensity, business-as-usual, and lack of emissions reductions since signing the UNFCCC.

Secondly, who is going to tighten up the NZETS and when? I can’t see Labour being in office soon, let alone fixing the NZETS even if and when they regain office. According to Geoff Bertram, Labour’s version of the NZETS was “almost as much of a dog” as the National NZETS. Labour’s ETS featured 100% free allocation of units to emitters based on 2005 gross volumes (not the 1990 base) and it was also uncapped in respect of overseas units. As far as I am aware Charles Chauvel of Labour has only said that Labour may end the optional price cap of $25 for surrendering two tonnes of CO2-equivalent emissions.

{ 1 trackback }

Previous post:

Next post: