Memo to Labour: Calling fossil fuels “transition fuels” doesn’t make the carbon go away

The New Zealand Labour Party announced their climate change policy on 24 August; the Sunday before last Sunday.

At first glance, it sounds refreshingly like a policy that takes anthropogenic global warming seriously. From the announcement:

A Labour Government will put in place a comprehensive climate change strategy focusing on both mitigation and adaptation, establish an independent Climate Commission and implement carbon budgeting, says Labour Climate Change spokesperson Moana Mackey.

“This is about future-proofing our economy. Making the transition to a low-carbon clean technology economy is not a ‘nice to have’ as the current Government would have us believe. It is a transition we must make and the sooner we begin, the easier that transition will be.”

How did the media respond? Well they ignored it. I haven’t seen any reporting of Labour’s climate change policy in the Herald, or Stuff/Fairfax, or Radio NZ or TV1 or TV3. I only stumbled onto it via Scoop a week after the release.

Like the 2011 election, the issue of climate change has been notable for it’s absence (the snake swallowing the elephant in the room).

However, some climate change focused NGOs responded positively to Labour’s policy. Simon Terry at the Sustainability Council said a carbon budget was the single most important reform. Generation Zero and the Iwi Leaders Group and forest owners welcomed the policy. The mainstream media of course also ignored these NGO views.

However, before I get into the detail of Labour’s climate change policy (a topic for another post), it’s important to ask “are the dots connected with Labour’s energy policy?” Unfortunately, the dots are not connected and the energy policy is 180 degrees contrary to the concept of a carbon budget.

Let’s look first at the sixth paragraph of Labour’s energy policy.

“It is internationally agreed that the average global temperature increase must be kept below 2 degrees Celsius if the worst effects of climate change are to be avoided. That means two-thirds of currently identified fossil fuel reserves cannot be consumed before 2050, in the absence of widely-deployed (and still unproven) carbon capture and storage technology.”

This is fantastic, isn’t it? Labour get it! They have read up on the Meinhausen et al Two Degrees Nature paper, the Carbon Tracker Unburnable Carbon Report, Bill McKibbin’s Do the Math and the IPCC’s Sixth Assessment Report.

They understand that the carbon in existing fossil fuel reserves will when consumed produce significantly more carbon dioxide than the quantity compatible with keeping average global warming to two degrees.

If only that were so. The next sentence tells us that Labour don’t get climate change.

“This does not mean that New Zealand should stop developing its own petroleum resources in a world still heavily dependent on oil. But this will be in the context of transitioning to renewable energy, which New Zealand and the rest of the world needs rapidly to do.”

This is inconsistent and nonsense. Someone else somewhere else must keep their fossil fuel reserves in the ground to avoid dangerous climate change. But not New Zealand. Under Labour’s policy, the private sector will develop New Zealand’s oil and gas reserves and the oil and gas infrastructure, with say a 40 or 50 year life span, over which they will expect to get a market return. Thats a carbon commitment for most of the years until 2100. The very time frame that the IPCC low emissions pathways say we need to reduce greenhouse gas emissions by 70%.

What is Labour thinking here? Where does Labour think the carbon dioxide from NZ’s new hydrocarbon reserves will end up? Or maybe if you label the NZ hydrocarbons as “transition” fuels there are fewer carbon atoms? Again this is nonsense.

I can only guess that Labour, in stating that their policy is in “the context of transitioning to renewable energy”, are arguing that oil and gas are now “transition fuels” to renewable energy supplies. That oil and gas are “bridge fuels” to renewables. Again this is nonsense. Are Labour now agreeing with Nick Smith?

I am not the only person to note the inherent contradiction in Labour’s policy. Bryan Walker has already noted that the intellectual hollowness is plain in Labour’s policy. Walker said;

“Political parties and governments which support expanded exploration and development of fossil resources either do not understand the severity of the scientific message or are so consumed by the prospects of economic wealth that they are determined not to heed it.”

Ditto Forest and Bird’s Kevin Hackwell;

“If Labour is taking climate change seriously it would realise that its fossil fuels policy is at odds with the party’s overarching policy statements on sustainability and climate change.”

Labour really need to be challenged on this. It’s as if the party has set a compass bearing for the destination and then headed off in the exact opposite direction. If there isn’t an understanding of the limited carbon budget in both your energy policy and your climate change policy, then it’s pretty much a ‘fail’ before even looking at the detail of the climate change policy.

81 thoughts on “Memo to Labour: Calling fossil fuels “transition fuels” doesn’t make the carbon go away”

  1. Have you found a definition of transitional fuels? During the climate change debate there was a brief exchange on this. The point was that you can’t bring about a change to electric cars say unless those cars are available. Put another way, stop people using petrol and they may revert to something worse, like coal which happened during the second world war. Main trouble was people had to clean out their gasifiers fairly frequently and left the coals on the roadside, bush fires sometimes resulting.

    However, Fontera has built several coal fired plants for processing milk. No “transitional” argument could be applied to that.

  2. The point was that you can’t bring about a change to electric cars say unless those cars are available.

    Typical troll-like reasoning from governmental mouthpieces. The government should be facilitating the transition by encouraging the development of the necessary infrastructure and providing investment incentives.

    Subsidise electric cars. Send a signal to electric car makers, and their potential investors, by giving them a leg-up into the market. Encourage investment in green technologies by providing tax break incentives. The Green Party is right in that their are massive opportunities here.

    It’s nowhere near enough, but at least it would be a start.

    1. Transcript of that part of the debate in which the word “transition” appears several times. I’ve left out a few words that add nothing.

      1:08:08 Samantha Hayes to David Parker: Would a Labour government get rid of those fossil fuels subsidies?

      Parker: Not as you describe all of them. I don’t accept that all of the things you describe as a subsidy are a subsidy.
      Groser: Thankyou

      Parker: We are in a transition from fossil fuels to renewables and it does take a while. I will do all I can to push renewables but I don’t think it makes any sense to import Saudi oil rather than exploit our own oil and gas.

      Hayes: Which brings me to my next point actually. We’re going to look at mining, fracking and offshore drilling.

      Parker: Can we talk about the environmental issues …

      Hayes: We’ll get into that. I just want to frame that slightly for us. The International Energy Agency says that if we are going to have a good shot at keeping warming below 2°C – that was the internationally agreed target at Copenhagen 2009, the Copenhagen Accord. If we are going to do that then 3/4 of fossil fuel reserves must remain in the ground which means we can’t burn what we have already found, let alone go exploring for any more. Now Mr Parker, under your government, Many of the current drilling permits which were being explored by companies like Anadarko which is offshore in Raglan – those permits were handed out when lLabour was last in government.

      Parker: They were, yep!
      Hayes: So how can you justify your position?
      Parker: Are you using oil?
      Hayes: Everyone’s using oil!
      Parker: I think that’s part of my answer.
      Hayes Are you saying we should continue to expand it in New Zealand?

      Parker: I think the biggest risk to the world is if we pursue an uneconomic oil future and substitute for oil from other fossil fuels including coal and lignite to liquids. They are the biggest risks the planet faces in terms of extensions to the use of fossil fuels. We’ve said we are not up for lignite development – that’s just nonsense. I think you will see use of or high value coals for coking and steel production for a while yet out of New Zealand, and I think you will still see some exploration for oil. I don’t think that will change the rate..It won’t slow down New Zealand’s transition away from oil towards renewable substitutes.

      Hayes to Miss Tuaine : There is huge opposition among Iwi to mining, drilling and fracking. How does the Maori Party reconcile its support for the government and its projects – it’s push to be a mine-frac-drill economy?

      Nancy Tuaine: Our first responsibility is to our people and to our land. How we achieve that ..is our responsibility. We are opposed to doing things to the land we have no control over – what happens to them. Things like fracking, deep sea drilling – all of those things have an impact that we don’t quite know what it is, nor can we control. The Maori party is totally opposed to those things. There are some Iwi in this country that have relationships but they understand what these are and they’re within their landscapes and they have those relationships. The Maori party is inter-generationally responsible and we take that role very seriously – if we don’t protect our lands now, if we don’t find and invest in – like what you said – clean technology, then there is going to come – its not a matter of if but when. We are opposed to those things we can’t control and we don’t know the impacts of.

      Hayes to Tracey Martin: Miss Martin I would like to bring New Zealand First in on this: what are your thoughts?

      Martin: Our manifest has made it really clear. We want to see a transition from fossil fuels to renewables. We want to see a phasing across of the 46 million dollars, the subsidies we were just talking about or whatever those payments are or whatever they’re called – we want to see a phasing of that 46 million dollars across into this other area and particularly around future development so part of that conversation has to be about a climate change act, similar to what the UK has got,so that we have that plan going forward to phase across. There are human beings involved in production and human beings currently using things that we need to have a cohesive plan to shift ourselves from here to there as quickly as possible recognising the humans in the conversation.

      Hayes to John Minto: We had a question of the week Mr Minto about cutting the fossil fuel subsidies by a 100%. Internet-mana said that would be great, lets do that. Isn’t that a little bit crazy given that we all still rely on oil?

      Minto: No I don’t think it’s crazy at all. We support the transition. For a country like New Zealand, we would have no new coal mines starting up, we would phase out our coal mines within ten years, and certainly no fracking and no deep sea oil drilling. Those things are really important. They are the three horsemen of global catastrophy. I think they are. Those three things we don’t want a part of.

      Can I just say another thing? There’s something that has not come up yet. If we had allowed and if we do allow the Tiwai Point aluminium smelter, let the market forces apply and it closes down, that would be a marvelous thing for New Zealand because we would have 14% of our electricity that is produced at the moment is heavily subsidised for the benefit of Rio Tinto and running that company, and it’s so bad that NZ could afford to put all of the workers at Tiwai Point on a government salary and tha would be cheaper than paying the massive subsidies we do at the moment for the electricity, and the added benefit for us would be: we would move much closer to that 100% renewable energy. We would reduce the price of electricity. That would be a great thing for families in New Zealand s I look forward to the day when the government stops subsidising Tiwai Point for the benefit of all New Zealanders.

      Hayes: That’s a pretty big call, particularly for those with families working there. I’m not sure of the number of people employed at Tiwai Point. Minister Groser,would you like to respond.

      Groser: There are about 800 directly employed at Tiwai Point. It produces half a billion dollars of exports. The fact that it uses renewable energy from Manapouri rather than exporting that bauxite from Queensland to China which uses coalfire means making a positive contribution from a global perspective on climate change.

      Parker: I’m not with John on that one either.

      Norman: Going back to the debate about oil – Think about it. We are spending about 8 billion dollars a year on imported oil, right? Basically its to run the transport fleet – that’s what its for. If we move the transport fleet away from oil, whether that’s biofuels, electrification or whether it’s buses, trains, walking, cycling, then it’s of enormous economic benefit to New Zealand because we are not spending our hard earned cash – at the moment we are basically spending every dollar we earn on tourism, overseas tourism, we have to spend on oil to run our transport fleet. Every dollar we save on the transport fleet because we move it on to either locally sourced energy like eleectricity or biofuels or we just reduce the energy use because we are using much better forms like buses, trains, all that kind of stuff – it’s enormously beneficial to the economy of New Zealand and it reduces our greenhouse emissions. It’s a win win.

      Minto: I agree.
      That 14% of electricity used at Tiwai point could be used to make that transition
      Parker: We can’t use that electricity in cars that are not here.
      Hayes: That is a good point Mr Parker
      Minto: We’re talking about a transition arn’t we?
      Parker: Why shut Tiwai Point down until we have to?
      Minto: but when ..?
      Parker: The market will take care of that if we have a decent price on carbon, these technologies will come forward and we bring them forward – then what will be will be but I wouldnt be closing Tiwai point down …
      Minto: We can’t afford not to

      Hayes: Mr Parker, do you see a scenario where we could?

      Parker .. No, unequivacally no, we don’t need to. We have more affordable sources of energy than any other country in the world, the aluminium produced is valuable and it’s the cleanest aluminium in the world.
      01:17:20

      Note for those not up on the Tiwai point smelter: It is NZs biggest single carbon emitter, though a small part of our overall emission., The emissions come from the carbon electrodes used.

    2. Rob Painting
      from the news today it looks like the Greens are going for it as you recommend. I was amused to see a reference to government servants gradually getting electric cars by way of setting a good example. I can almost feel departmental heads salivating over images of the Tesla S and taking a keen interest in the location of fast recharge stations. 🙂

  3. We are smart enough to learn how to live sustainably, and there have been advancements and developments by the scientific community to do so. However, there is no money to made with sustainability. No way to exploit the masses if they have cheap sustainable energy, services, and products.

    That’s why you don’t know about these technologies. Because those in power, those with money, and those who want more of both take those technologies and make sure they aren’t released to the public. 
    LENR aka Cold fusion

  4. The Green Party have plans to set up a Green Investment Bank
    https://home.greens.org.nz/press-releases/greens-will-establish-green-investment-bank

    yet they want to fund this from raising the royalties from oil production.

    “The Bank will cost $120 million over the next three years and will be paid for by raising oil mining royalty rates to those charged internationally.”

    I’m not sure if they propose to raise the royalties on existing wells only

      1. I never made the claim that NZ should not charge or increase royalties on oil production.

        Norway has done particularly well out of this, and it is ironic that they are exploring in NZ with presumably a large part of any profits made being sent back there.

        1. Andy, investing the proceeds from FF exploitation is the obvious way to fund our bootstrapping into our future.
          By making FF use more expensive and using the funds to boost investment into the successor technologies we are doing precisely what we should be.
          Thus the Greens policy is entirely on the right tracks!

          1. Increasing royalties from oil exploration doesn’t necessarily make it more expensive for the consumer. It just makes it a less attractive business proposition for the oil companies.

            1. You gave the example of Norway yourself. Has their collection of Royalties from their (expensive and technically difficult to exploit deep water offshore) oil and gas critically disadvantaged them against all of their geographically close and interconnected competitors (UK, Denmark, Holland)? Does not look like it does it. BIRDCHOPPERS! … sorry that just slipped out.
              Promoting replacement with revenue from the thing that needs to be replaced, you really have to tie yourself in knots to try and argue against that.

            2. I’m not quite sure the point you are trying to make,
              I am not arguing that we should not impose royalties on oil and gas production.

              Norway has done this very successfully and created a sovereign fund that now owns 1% of the entire world stockmarket, making every Norwegian a paper Krone miliionaire (should get a couple of rounds in on a Saturday night in Oslo)

              They (Statoil) have taken their North Sea expertise and expanded it into deep water prospects, now being one of the world’s top experts in this arena

              This is why, presumably, they are exploring deep sea prospects in NZ.

              Here in NZ, however, we don’t want to develop this industry at all.

              Unless, of course, we want to tax it to fund our pet projects.

              So therein lies the conundrum.

            3. Do you have existing fossil fuel extraction (including oil and gas) in NZ? – Yes.
              Is it a good idea to milk this existing industry, including any further exploitation of new fields, to provide revenue to boost growth in the alternatives that will cut demand for the fossil fuels? – Yes.
              Rest assured andyS, readers here will usually be quite sure of the point that you are trying to make, even if we highlight the deficiencies or outright lies in your argument.

            4. So you think it is a good idea to “milk” the oil industry to fund your projects, including new projects, which will likely be deep sea.

              That is counter to the view held by the NZ Green Party, which wants no deep sea oil exploration and production.

              Therein lies the conundrum

            5. Coal, lignite, oil, gas, fracked oil and gas, tar sand. Whatever fossil fuel is being extracted (existing exploited reserves or any new reserves being exploited), take revenue for that, and feed it into incentives for displacing it, progressively reducing the future market and need to extract fossil fuels, deep water oil and gas or otherwise.
              Only a conundrum if you are hard of thinking or a anti renewable zealot.
              BIRDCHOPPERS!

            6. Let me clarify Beaker. You are in favour of deep sea oil, fracking, lignite, tar sands, in fact any source of revenue to fund your pet projects.

              Would that be a fair assessment?

              Would you also be in favour of funding from the proceeds of gambling, drinking and smoking?

              These are issues that have been raised in NZ political circles by the way, the Sky City casino issue, for example

            7. Andy, if we want any chance at all to stop the global train wreck we are creating for life on Earth at present then we must stop digging for more of the very poison that is killing us. And it would also be handy to tax the production of the existing wells (or at least stop handing them trillions in subsidies at year for a start) in order to raise the price of the black death to a level that really motivates people to accept the necessary changes in lifestyle required to aim for survival of humanity as we know it, no less.

              I see absolutely no contradiction to using the funds raised from taxing ff production for the investment into their successor technologies.

            8. Let me clarify Thomas, are you like Mr Beaker in favour of shale gas, tar sands, oil and gas, lignite, and other forms of FF if it is used to subsidize your useless wind turbines that have been sitting mostly idle for the last 30 days in NZ during this unusually dry and windless period?

            9. ‘Let me clarify’ you say andyS (twice) followed by desperate and transparent spinning.
              Any reasonable person reading what I have written here and stating that I am in favour of greater extraction and consumption of fossil fuel would have to be quite dim. But you andyS are not a reasonable person are you. This is another example of your egregious anti renewables zealot compulsion. Rather sad to observe and it must be exhausting for you.
              Just two other points, the main source of revenue for renewable generation is selling power to the grid (not bad for something you claim is useless and does not work, but then you specialise in counter-factual claims dont you), from what I have seen the Greens are proposing to incentivise renewable development from tax on fossil fuel consumption, suppressing the harmful to the advantage of the beneficial. As fossil fuel use drops that revenue will drop with it, but its need will be dropping also thanks to the prior deployment of renewables.
              Oh and in the UK, Cigs, Booze and Betting are all taxed and rightly so. The revenue from this tax is not hypothicated, it just goes into the general HMRC pile funding pensions, hospitals, schools etc. Does not fund wind turbines however despite the repeted claims of wind NIMBYs. Funny how they are so averse to getting their claims right, a bit like you andyS.
              I had to laugh at your attack on NZ wind turbines not producing much “during this unusually dry and windless period” Whatever next, are you going to call for the immediate dismantling of NZ hydro power stations just in case there is another drought?

            10. Beaker, i will repeat your comment

              Coal, lignite, oil, gas, fracked oil and gas, tar sand. Whatever fossil fuel is being extracted (existing exploited reserves or any new reserves being exploited)

              It appears that you will attach your porcine snout to any source of FF revenue, now or future

            11. Yup andyS, thats part of what I wrote. The remainder was (just so that we as sure that you are not quote mining)
              ‘ take revenue for that, and feed it into incentives for displacing it, progressively reducing the future market and need to extract fossil fuels, deep water oil and gas or otherwise.
              Only a conundrum if you are hard of thinking or a anti renewable zealot.
              BIRDCHOPPERS!’

              So andyS, is that still a conundrum for you?

            12. Beaker, your argument that wind turbines will “replace” fossil fuels is laughable

              By the way, at present crude oil prices are barely able to sustain the North Sea oil industry (layoffs are happening in Scotland right now), never mind gift money to support your “industry” too

            13. “By the way, at present crude oil prices are barely able to sustain the North Sea oil industry (layoffs are happening in Scotland right now), never mind gift money to support your “industry” too” Is that the north sea oil industry that was started off with generous government support and is now in declining production because the extractable oil and gas from those fields is running out? That North Sea Industry? By the way I was up in Aberdeen just a few weeks ago staying with people who actually work in the offshore oil and gas industry – like your claims of the Aberdeenshire countryside being desecrated with wind turbines, your ‘barely able to sustain the North Sea oil industry’ statement has the factual basis we have come to expect from you andyS.
              “your argument that wind turbines will “replace” fossil fuels is laughable” Add wind turbines to the grid and their lower marginal cost generation displaces fossil fuel powered generation reducing fuel consumption, CO2 emissions and the wholesale electricity price. Not my argument, what actually happens.

            14. So your friends in Big Oil will know that Brent Crude is at its lowest price in 2 years

              http://www.bloomberg.com/news/2014-09-10/wti-trades-near-8-month-low-as-supplies-slide-less-than-forecast.html

              Wood Group offshore has been laying off staff. Companies like Shell and BP are struggling too,

              On the face of it, Aberdeen is booming, with lots of new offices springing up,

              Maybe a couple of new Middle East wars will spruce up business. Maybe when Mr Obama has shaken up ISIS a bit we might get a higher oil price which will liven up the local economy.

              That is, of course, predicated on a No Vote in the referendum which will drive many companies south of the border, should a Yes vote win, (including the Bank of Scotland)

              Also a problem too, for the half a billion pounds a year that the English pay to Scotland in wind energy subsidies.

              Probably academic, since I would bet on a No vote in the Scottish referendum.

            15. First you provide a link about international oil demand being down then go off on lots of tangents about Scotland. Calling this a fishing trip would be complimentary.

  5. Great article. Here is another way of putting the problem of the Labour Party policy.

    All governments agree that 2 degrees warming is not to be exceeded. The IPCC has produced a carbon budget of 1000 gigatons of CO2 emissions for humanity’s careful use over the next few hundred years to stay within that target. Reputable estimates suggest that the entire carbon budget will be ‘locked and loaded’ for use by existing infrastructure and plant ie thermal power plants, planes, cars etc by 2018: http://bit.ly/1rRyrtj

    That means that from 2018 you have to 1) stop building any new thermal power plants, planes, cars etc or 2) dramatically increase energy efficiency in them. Either pathway doesnt leave any room for finding and using new fossil fuel reserves. Unless you are searching for better machine oil to grease wind turbines.

  6. “That means that from 2018 you have to 1) stop building any new thermal power plants, planes, cars etc or 2) dramatically increase energy efficiency in them. ”
    Considering that you only need about 50cc/100kg of load, it is feasible to use light-weight, slow vehicles with a max engine capacity of 250cc (Tuktuks for example) for the vast majority of our daily transport. Of course that would require a massive change in the mindset of a lot of people who couldn’t cope without their 150kph SUVs. I imagine the suggestion would go down like a brick balloon, but it will have to happen sooner or later. Sooner, we may dodge the bullet….
    …. or we may already be locked into >2°C by the carbon released 20 years ago. Bugger!!

  7. @noelfuller,
    Parker defends oil exploration in two ways. First he says “I don’t think it makes any sense to import Saudi oil rather than exploit our own oil and gas”.
    I take that to mean he thinks oil resources NZ develops will reduce NZ’s imports of oil. Tim Groser has said more or less the same thing a few minutes earlier.
    This self-sufficiency argument is faulty on two levels.
    First, it is just factually incorrect that new oil resources will substitute for oil imports. This is because NZ oil production is predominantly (95%) an export industry. See page 11 of the Energy in New Zealand 2013 “almost all domestically produced New Zealand oil is exported”. In 2012, NZ domestic oil production was 87 petajoules of which 4 petajoules was consumed in NZ.
    The second point (even if oil production did in fact reduce oil imports) is explained best if it is Tim Groser arguing for self sufficiency. Groser’s other ministerial hat is free trade. So why is he not being consistent with his free trade principles, of promoting globalised free trade of commodities such as oil? If you consider that globalised free trade benefits all parties, then there is nothing wrong with importing oil while ceasing exploration for local oil resources. Groser and Parker are both proponents of free trade, except it seems, when we start to talk about leaving hydrocrabons in the ground.

    BTW is the debate transcript online somewhere?

    1. I did just that bit to have in print where the parties were coming from with the word “transition” and incidentally we also get all the minor parties looking for a straight carbon tax and being quite against more fossil fuels extraction. Without a progressive carbon tax “transition” has no meaning. A carbon tax must at least level the field but best tilt it toward renewables so people put their heads hands and feet to work.

      I note from the midday news the Greens are proposing 100% renewables by 2030 given a progressive carbon tax. The news did not say 100% of what – electrical generation maybe? Also mentioned was a move to stimulate electric car uptake including establishment of a country wide recharge network.

      A country wide recharge network was swiftly established in Estonia. I have wondered if the fact they issued public servants with electric cars had anything to do with the 100% coverage. Public uptake however, has not followed because cars at the right price maybe are not available although free public transport in Tallin has been cited.

      The battery technologies have to be the critical pricing element. Battery breakthroughs would also be of the greatest importance in accelerating takeup of distributed generation at all levels. Tesla’s super factory will help too so maybe Russel Norman has reasons for optimism.

      1. “The battery technologies have to be the critical pricing element. Battery breakthroughs would also be of the greatest importance in accelerating takeup of distributed generation at all levels. Tesla’s super factory will help too so maybe Russel Norman has reasons for optimism.”
        As I noted, the big component of the problem is that we assume electric cars to have similar performances to the behemoths begat of infinite supplies of cheap fossil energy. We HAVE to rethink what we really need as opposed to what we have come to expect over the last century.

  8. Noel,
    Well thats a commendable effort doing all that transcription!
    Yes it would be probably be reasonable to classify use of fossil fuels (or oil resource development) as transitional if the use was subject to a decent carbon tax.
    At the moment according to this explanation of the Climate Change (Liquid Fossil Fuels) Regulations 2008, scroll down to “Calculation of emissions, it indicates that exports of fuels (like our oil) are deducted in calculating the ‘reported’ use of fuel that is subject to the NZETS. So our oil exports are not subject to the NZETS. And are therefore not carbon-priced. Parker must know that.

    1. I don’t think a carbon tax will ever be applied to exports. The nature of a carbon tax is that it is applied either at the point of entry or generation within a country or state or it is applied at the point of sale like GST as in British Columbia which may have an advantage in keeping people conscious of it.. Suppose NZ sells to Sweden-Norway where there is a carbon tax of about $200 a ton. Ideally as with all carbon schemes they work better if everyone is in but even so those who have been in longest have the highest carbon taxes while for those who go it alone a carbon tax is still effective as Australia demonstrated before the reactionaries took over. Oh how they will be reviled in a not very distant future!

  9. “Let me clarify” beginning of another rhetorical device to misrepresent, confuse and sew distractions andyS – not good faith discussion but malign intent as I see it.

    1. noel, it appears has if andyS’ “education” in mathematics was severely lacking in courses in logic. However, it is difficult to determine if his illogical nonsense is attributable to ignorance or deliberate dishonesty in order to sow confusion .

  10. Noel,

    Are you still there? I have returned to your question about what do we mean by the term ‘transition fuel’? Which I realise I didn’t address. I recall that in one of Bryan Walker’s posts, he said something along the lines of “the term ‘transition fuel’ appears to have a very elastic definition when used by a politician”. Very pertinent!

    Have you read Jan Wright the PCE‘s report of June 2014 Drilling for oil and gas in New Zealand: Environmental oversight and regulation? On page 87 she discusses the question in the context of climate change.

    Gas. She notes that the overseas examples (USA) are typically about gas displacing coal in thermal power plants due to the lower price of from fracking. However, less US demand for coal led to more US coal exports, cancelling out any CO2 benefits. I’d note that if fuel switching is caused by a price advantage to gas, then that isn’t ‘locked in’ as the price advantage can be reversed in the normal trading of the market. She also notes the view that methane leakage from gas infrastructure is much higher than estimated (The work of Howarth and Ingraffea at Cornell University).

    Wright concludes that in NZ gas is more likely to displace new geothermal or wind power than to displace coal thermal electricity given that so little coal is now used at Huntly. So gas is definitely not a ‘transition fuel’.

    As for NZ oil, Wright says it is all exported as it’s the wrong grade to be refined at Marsden Point. So there can be no fuel substitution and NZ has no policy of oil self-sufficiency. So I assume she is saying that more NZ oil can’t be a “transitional fuel”.

    Also have your read this comment on shale gas from Kevin Anderson? Anderson argues that no fossil fuels no matter how carbon-intensive have ever been displaced by cleaner fossil fuels (except perhaps peat!). They just stay in the portfolio!

    So I’m now thinking that describing the use of a particular hydrocarbon for energy as “transitional” will only be valid – if there is an unambiguously effective regulatory policy to phase it’s use out in favour of the no-carbon alternative. So we’d need regulation to stop reversion to 1940s coal-fired cars or to stop Fontera installing coal thermal plant boilers. As well as a carbon price.

    1. Still here Mr February.. This is good stuff. Thankyou. I have joked that pinning down politicians stands as much chance of success as exterminating rats but we get a few of them when we try. We could do better in pinning down the meaning of words they otherwise use very flexibly.

      So there is no such thing as a transitional fuel

      There can be a transitional economy, namely any economy that is targeting replacement or elimination of fossil fuels and is structured to bring this about.

      In such an economy any fossil fuel in use can be deemed to have a transitional function but only insofar as there is no immediate replacement and incentives to do so are in place. Plainly New Zealand does not have a transitional economy in place. The ETS is only a placebo at present.

      Some discussion pertaining to the meaning of “transition”

      1. Is there anywhere a program to render ambulances fossil fuel free? If there is such a program and suitable technology and incentives, we would not put ambulances off the road simply because the conversion technology has not reached them. Until then they need fuel.

      2. Fontera has built several coal fired power stations recently to process yet more milk powder for sale to China adding the worst kind of emissions to a system that begins with intensive dairying, depleting our soils, feeding them by depleting other places (Indonesia) with produce obtained in the first place by destruction of rain forest and release of carbon from the peats they have created. and also forest clearance in NZ to make way for intensive dairying. To that significant increase in emissions can be added large increases in methane emissions, various nitrogen compounds polluting and gradually eutrifying waters and adding another powerful greenhouse gas to the atmosphere – add in the transport emissions too – food and fertiliser miles!. No part of this could be viewed as being in a transitional mode toward a fossil fuel free future, rather every part increases emissions.

      A transitional economy would have to strongly deprecate this, it should fetch carbon taxes at every point to bring it to an end. No wonder the milk powder feds don’t want the Greens anywhere near them! Groser, as did Helen Clark, claimed NZ farming the most efficient in the world. I wonder what full carbon accounting of NZ intensive dairying would reveal?

      3. What, in contrast can be said of NZ Steel and its need for coking coal to produce steel. That carries a high carbon cost. Is there any alternative on the horizon? NZ Steel have offset this somewhat by converting some of their emissions back into oil, offsetting equivalent oil extraction – with kiwi technology. Do we really need so much steel globally speaking or in NZ? I can’t answer that one but a carbon tax should not have exemptions on CO2 if people are to put their minds to work on the issues. The CO2 to oil should fetch compensation through a tradable certification scheme. NZ Steel sells its certificates to itself to offset part of its carbon taxes (theme for an operetta ?).

      David Parker argued that the Greens’ scheme does not get the balance between agriculture and forestry right, which he claims an improved ETS would do. The Greens have proposed a certification scheme aimed at dairying. I don’t know the details or if any have yet been made known but I suspect that it could result in sustainable farmers paying carbon taxes only on what they burn with their machinery. I would like a more general certification scheme to add to what the Greens have already proposed – somewhat on Swedish lines except tradable certificates are awarded not only for renewable power generation but also for carbon sequestration and carbon fuels offsets as with NZ Steel say. In a Sweden-Norway like certification scheme not only would I earn a bit more off my PV roof but that balance with forestry Parker wants could be achieved and the Iwi Leaders Group on Climate Change’s concern over devaluation of their forestry NZUs (which would have to be replaced) could be allayed.

      5. Over in UK (Scotland) another breakthrough on hydrogen generation has been announced, 30 times faster than current methods, cheaper and safer, and suited to use of wind and solar for electrolysis of water to get the hydrogen. No doubt the fossil fuels industries would seize on this to produce even cheaper fertilizer while continuing to use coal generated electricity for the electrolysis of water. An economy in transition might discriminate between hydrogen generated using fossil fuels and hydrogen generated using renewables.- certificates for hydrogen generated by renewables on top of the renewable power generation certificates perhaps – may be unnecesary but should be considered.

      1. “So we’d need regulation to stop reversion to 1940s coal-fired cars or to stop Fontera installing coal thermal plant boilers. As well as a carbon price.”

        I dwelt on two tools to encourage decarbonation in my above post on “transition” but forgot regulation as a third where it is necessary.

    1. Actually the inconvenient truth is that coal is by far and away the cheapest way to heat a home in NZ. I found this out when researching home heating systems for our new home project.

      Coal isn’t actually a option for us as we are in Canterbury region, which doesn’t allow domestic coal fired home heating.
      If you live in Otago or Buller, for example, then you can burn coal and it is cheaper than any other option.

      I know you will argue about externalities but I am just stating the direct cost to the consumer.

      1. “I know you will argue about externalities but I am just stating the direct cost to the consumer.”
        You’re arguing direct cost in an environment where there is no accounting for externalities, which is unsustainable. That environment is doomed, either because we see sense and vigorously discourage fossil fuel burning or because the climate has gone so unstable that humanity is struggling to survive.

        1. This is why the people of Buller will never party vote Green, since their economy was built on coal

          As it happens, the Buller was the birthplace of the NZ Labour Party (Mickey savage ) and probably will be the place it will be buried too

      2. I found some indicative prices here:
        http://www.theboilerhouse.co.nz/#boilers-and-fuel

        If you use the calculator based on Central Otago, the costs for various boiler options, assuming 8 hours a day for 7 months of the year, are:

        Coal $168
        Slab Wood $368
        Pellets $588
        Diesel $812
        NatGas and LPG $980

        This price comparison doesn’t include electricity and heat pumps but these are also quite a lot more expensive than coal

        A carbon tax can’t fix this massive price disparity. You would have to ban coal outright (as has happened in Canterbury, yet people still burn it illegally in places)

        1. I took a look around the net on coal bans: air pollution is the only reason cited – Canterbury, Reefton, Beijing (city plus 22 districts) and in Cork they can’t think how to ban smoky coal but permit smokeless coal – there is a carbon tax on coal but apparently ineffective. Seems regulation is the only way but the tool only exists with respect to pollution. Concerns about diesel also tend to focus on air quality only.

  11. The whole point of a carbon tax is not to pay it and keep burning but to stop using the stuff all together. We don’t need a tax, we need to recognize the problem and start making the changes. All we are doing at the moment is trying to cheat the system and gain an advantage whereas the changes are cheaper, cleaner and better.

    1. “We don’t need a tax, we need to recognize the problem and start making the changes”

      Where did that come from? At present 6 of the 8 parties say they recognise the problem and have, are or will make changes in the direction of a carbon tax. Without a carbon tax to incentivise changes we have exactly what we have now – a handful of first adopters making changes, The rich opposing change, with some exceptions, plenty who do not know there is any issue, others who deny it, and the rest leaving it to others.

      I agree that the large scale issuing of credits is a doubtful tactic demonstrated by our ETS and other trading systems except the Swedish model where certificates have to be earned.

      The issue gets sticky somewhat with afforestation. How do you ensure afforestation has more value or at least equivalent value to agriculture after taking differences in albedo into account? Then there are people who have planted for carbon credits believing in an approach that has lost credibility. How can planting a forest which will be harvested in 25 years or less earn any credits, or certificates, unless that carbon can or will be sequestered? Used for common structural purposes or paper most or all of the carbon will be returned to the atmosphere (commited emissions) by fire and decay in a few generations. So felling trees should earn a carbon tax, not a credit unless it is used instead through conversion to biochar and sequestered as soil improvement. Can we do so on such a large scale? Can that return fertility to the felled land? Will the biochar guarantee the retention of soil carbon (sequestrated) for centuries and millenia as has happened with Amazon terra preta de indio?

      What of farm soil quality? Carbon content of soil should earn certificates if improved or maintained at a satisfactory level in a sustainable way or carbon tax if the quality is lowered.

  12. You really are being obtuse andyS. None of those numbers have any relevance unless the true costs, including all the consequential downstream are included and while I’d agree it’s hard to put a figure on mass extinctions we should, nay MUST make that call.

    1. I provided some retail costs of various fuel types that can be used to heat your home in some parts of NZ

      In particular, these numbers show that a carbon price would be ineffective at reducing coal usage, which I suggest would have to be eliminated by an outright ban should you wish to pursue that option

  13. Some of the schools here have been grizzling about the wood pellet stoves they put in costing three times as much to run as the coal ones they used to have. Not sure how heat pumps compare.

    1. Can you please name a school. I would like to inquire personally how they are going with the wood pellet stove.
      However, coal may be cheap, but not everything that is cheap is affordable. You conveniently forget the consequences, for which in the case of coal, society pays….

      1. The problem is, it’s not just society, it’s the entire planet’s ecosystem. Given the possibility of a 30-50 year lag in the inertia plus the vast amounts of methane clathrates stored in the tundras and sea floors, we run the risk of a runaway positive feedback that renders Lifeboat Earth as inhabitable as Venus.

        And before anyone starts scoffing, remember that the Earth has never experienced such an explosive release of fossil carbon. All the previous mass extinctions related to sudden temperature increases were spread over many 1000s of years, not over a couple of centuries. We’re in totally uncharted waters.

      2. It was Kaikorai Valley, in an article in one of the local papers, but I think they mentioned that other schools might have been affected ( maybe in Alexandra? ) The school I’m working at is beautifully designed for natural light in the classrooms, but of course that means there’s a lot of single glazed windows leaking heat. Since the place was built, lighting has got much cheaper, at least for electricity used, and lots of classrooms keep the curtains drawn anyway as they’re all using computers. They use heat pumps and some night store heating, plus an older block has water radiators retrofitted with gas. Teachers and pupils seem about equally spendthrift about leaving doors and windows open with the heaters running.
        I’ve been doing some work for a mate helping fit out an office building; he’s going for heat pumps and night store too. That seems to me the best as regards emissions ( as long as your grid’s low carbon and the refrigerant isn’t getting into the atmosphere after end of life ), and should be favoured by government action to keep power prices down.

          1. Kaikorai Valley school switched from coal for environmental reasons, I suppose. The school I’m at never had a boiler, and it would cost bulk to install one.The Otago University, Cadbury’s chocolate factory, and the hospital laundries run on lignite ( I think the steam is piped between them.) The German guy in charge of the university’s system is quite keen on wood pellets, but he says you’d never beat coal on cost.
            A friend of mine built a house in a new suburb on the approach path to Queenstown airport. The area was only developed on condition no domestic fires were installed, to prevent smog from affecting the airport, but someone won a court case to be allowed to use one of the powdered coal burners with an electric screw feed and fan fluidised bed combustion, on the grounds it’s smokeless. My mate put one in too, and burns a couple of ton of lignite a year. It’s cheap, but I told him he’s shafting the planet for his kids – like most of us.

          2. The “rest of society” that is using coal should think again. Cheap is not the same as affordable!
            If the true cost of burning coal were factored into the price (and who can price the value of a new planet anyway?) then nobody right in their mind would touch the stuff unless absolutely necessary (steel making I suppose).
            Schools and the state sector generally should make a start by moving away from coal, no matter how “cheap” it seems to buy.

            1. Then I suggest you write to Dunedin Council and explain to them that their policies are destroying the planet.

              This is the same council that is divesting its investments from fossil fuels, and trying to attract the oil and gas industry to the area, so you need to make sure you get the right person

            2. Another kind of divestment would be students themselves demanding a ban on fossil fuel heating – lignite ugh! Put it down to the new Stern report or any other of the proliferating reports on the necessity for rapid action and add in externalities to the arguments. Where’s Generation Zero on this one?

            3. Good idea.
              Let me ask you Andy: If you were responsible for the city council, what would you advocate to do about lignite burning?

            4. I would also suggest that Dunedin should ban all diesel and petrol transport in their city as they deem fossil fuels ” unethical””

              Councillor McTavish is your contact point.

            5. As usual, Andy responds with a straw man argument on ff transport instead of answering a simple question on heating: I repeat, if responsible for decisions at the “city” council (insert city of your choice in NZ) would you ban coal fire heating or not?

            6. Christchurch banned coal burning for clean air reasons.
              A similar ban in London cleaned up the smog problems they had in the 1950s.

              If a town has a smog problem due to its topography and there is public support then banning coal makes sense

              I don’t think you can ban coal because of CO2 reasons. I don’t think there is any legislation to support this and I can’t see how it would work, as it would imply a ban on all fossil fuels.

            7. Andy, when there are no alternatives – as is generally the case with transport fuels at the moment – a ban makes no sense (hence your straw man argument). But if there are alternatives readily available as for heating use, then a ban makes sense. If ChCh could do it for smog reasons then surely the rest of the country could do it for AGW reasons. You need to start somewhere Andy. When will you finally accept this?

            8. It doesn’t make sense to ban coal because of “AGW reasons” because you would have to ban home heating from diesel, gas, etc as well.

  14. ‘…I can’t see how it would work, as it would imply a ban on all fossil fuels.’
    A rising tax on carbon would. New Zealand’s complicated, with CH4 and N2O so projaginate, but fuels are easy to monitor. Obama’s EPA rules look like a happy place for loophole lovers, in comparison.

  15. “I don’t think you can ban coal because of CO2 reasons.”
    Oh, fear not, it will come. It may be people being torn limb from limb by truly pissed-off victims of disasterous climate/droughts/floods/famines etc.

    “I don’t think there is any legislation to support this”
    Not from the latest pack of Noddies anyway. It will come, depending on whether political organisations survive the disasters mentioned above.

    ” I can’t see how it would work, as it would imply a ban on all fossil fuels.”
    You’re onto it, Sunshine.

    1. If you introduce legislation to ban coal because of CO2 then you will open the door to banning petrol, diesel, gas, oil, plastic, concrete etc

      Probably won’t be very popular with the voters

      1. Andy we must start somewhere. Banning Coal in ChCh was readily accepted for smog reasons because people can smell the problem. With AGW we don’t smell it yet on a personal level but the consequences are far bigger than one city of smog. Banning coal for heating could be one sensible step on the ladder of policy changes humanity must make if we want to have a chance at all. Banning FF for transport is not on the cards as there are no sensible alternatives yet for the general population – quite unlike heating – where you can use better fuels.
        Your persistent all-or-nothing rhetoric is pathetic really. It is the same fallacy that underlies your anti-wind and anti-solar stance. I could say the same on your fabulous Thorium reactors (none of which are commercially available yet) and which will for a long time to come certainly only play a part in the basket of contributions towards solving our problem.
        You must start to see the solution as a synergy between a range of contributing developments, from stopping coal use for reasons other than steel making or required chemical processes to a healthy mix of solar and wind in the grid, to geo-thermal, tidal and other locally sensible options.
        So stop crying foul whenever somebody mentions a worth while step we can take because it is not somehow a 100% solution. It won’t be and never will be and if you continue arguing like this you simply look foolish.

        1. I will ask the question again.
          What criterion are you using for banning coal?

          Just because it is coal?

          Or is there some kind of threshold of CO2 that you will impose?

          Maybe you can provide me with some actual logical argument that would form the basis of a rational policy

          1. Since your imagination fails you shall we put some obvious choices forward then:
            For heating we have choices between: Coal, Gas, Oil on one side and: Wood Chips, Wood stove, Heat Pump, straight electric on the other side.

            Point 1: Coal is by far the worst when it comes to CO2 generation per BTU of energy delivered:
            http://www.eia.gov/tools/faqs/faq.cfm?id=73&t=11

            Point 2: NZ can produce ample wood chip material and we have also the luxury of straight firewood being available in most rural places

            Point 3: Our electricity grid is using over 60% non FF energy resources so using this to drive heat pumps would be a far better option than coal.

            Point 4:Phasing out Coal for direct heating would be just as doable in the rest of the country as it was in ChCh.

            1. Are you proposing that we ban all forms of fossil fuel heating for homes, or just coal?

              If the latter, what is the policy and legal framework you propose to use to make this happen?

            2. Just coal for a start as clearly it is about twice as bad (CO2 wise) as the other FF alternatives.
              The legal framework could take the Chch framework as a reference. Surely something that could be worked out with a will to take sensible step into the right direction.

              One step at a time.

            3. Rubbish. Following your all-or-nothing thinking you would then be in favor of legalizing anything i suppose? Take your pick of “banned” behaviors from driving when drunk to whatever else society decided we would be better of without…..
              I think you really have an issue with your black-and-white mentality. Don’t you think this is a bit unsophisticated for a grown up?

            4. You wish to ban coal because it causes “global warming” apparently.

              97% of scientists agree, so we can take it as a given

              97% of scientists agree that cows cause global warming.

              So why don’t we ban cows too?

            5. Fewer of the battles with home-built straw men, please Andy. If you want to indulge yourself with fatuous argument, please find somewhere else to do it.

              Thanks.

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