Moving the earth for oil

Ethical oil. That’s what Canada is producing from its massive tar sands operation, according to the newly appointed Environment Minister Peter Kent. I admit to having missed that dimension in what I have read of the oil extraction from tar sands. I understood that when the CO2 emissions from its production is added to the CO2 from its combustion it emits between 10 and 45 percent more than conventional crude. I also understood that the environmental effects of the mining and extraction process are appalling, that restoration undertakings are more promised than real and that First Nation communities are gravely affected. Most telling of all I understood that according to James Hansen if the world wants to have a chance of avoiding dangerous climate change it must not only rapidly phase out coal emissions but also leave unconventional fossil fuels such as oil from tar sands in the ground.

But I didn’t understand that tar sand oil was ethical. What makes it so? The Minister explains:

Continue reading “Moving the earth for oil”

Can you dig it?

On the same day that I wrote a post about the proposed lignite development in Southland I emailed the Minister for Economic Development, Gerry Brownlee, to express my dismay at the news. I have received a letter in reply which explains all too clearly how such a development could, and presumably will, proceed under current policy.

In my email to the Minister I pointed out that simply offsetting the massive emissions from lignite development would hardly be in line with the intention of the Emissions Trading Scheme (ETS) and the imperative to reduce greenhouse gas emissions. I wrote that unless there are clear plans to capture and sequester the carbon dioxide which will be released the company should not be permitted to undertake any of the proposals. The government is the owner of Solid Energy, able to tell the company it is not to proceed with the plans, and if necessary able to legislate to prevent the development of lignite until such time as sequestration technology is established. I spoke of the Minister’s duty to prevent such development at this time, and stated in conclusion that his obligation to protect our descendants from the potentially terrifying effects of climate change far outweighs any responsibility he carries for present economic development.


The Minister’s reply first assured me that, like me, the Government is concerned about climate change and is committed to doing its “fair share” in reducing New Zealand’s greenhouse gas emissions. The fair share theme is a constant in government statements about climate change these days. It’s a politically useful term: it reminds those who want to do considerably less than we are doing that we can’t afford to appear laggard, and it also serves to placate those who feel we are less than whole-hearted in tackling the issue. It’s hard to argue with, and I can understand its attraction for the government. Nevertheless it’s hardly the kind of term that immediately leaps to mind if one really is concerned about climate change. It suggests that the Government worry is not so much climate change as political positioning.

The Minister goes on to say the ETS is the Government’s principal policy response to climate change. It puts a price on greenhouse gases, he explains, and provides an incentive to reduce emissions and to encourage tree planting. He then adds that it does not provide a cap for existing (or future) emissions and hence is not prescriptive about what developments should or should not progress. This strikes me as a very clear admission that the ETS may not, in fact, result in any reduction of emissions at all.  It is a remarkable act of faith in the power of incentives, and an abdication of responsibility for the outcome.

That abdication becomes clearer as the letter proceeds. It is admitted that lignite developments of the scale being investigated by Solid Energy will create significant greenhouse gas emissions, depending on the particular projects chosen. However any development will be “carbon compliant” with New Zealand’s greenhouse gas emission management frameworks. That looks like meaning that Solid Energy will pay whatever is required under the ETS to cover the cost of its emissions, and if the project remains profitable under such a regime it will go ahead whatever the level of its  emissions.

But if Geoff Bertram and Simon Terry have it right in their book The Carbon Challenge, Solid Energy, far from paying for the emissions from a plant to manufacture urea from lignite, may well be entitled to subsidies in the form of free emission units for its operations provided it meets certain benchmark standards for ‘emissions intensity’. Bertram and Terry estimate that subsidy could go as high as between $500 million and $1 billion dollars in nominal terms over the first twenty years of the plant’s life. This, even though it would be the country’s biggest single industrial emitter of greenhouse gases after the Huntly power station.

Back to the Minister’s letter. A paragraph follows noting that to potentially mitigate against CO2 emissions Solid Energy is actively following the progress of Carbon Capture and Storage (CCS). The letter referred me to a page on the Ministry of Economic Development website for information about government-industry collaboration on the active investigation of the feasibility of CCS in New Zealand. Maybe I missed something but the page looked pretty sleepy to me. There’s little sign there that CCS is likely to figure prominently in Solid Energy’s lignite projects.

The Minister’s letter then emphasises that projects of this scale have long lead times. He is aware of investigative drilling and pre-feasibility studies, but as yet the decision to commence project construction has not been made. As no formal proposal has been lodged he cannot pre-empt outcomes. I don’t know what pre-empting means in this context, but it seems pretty clear from the rest of the letter that he won’t be looking to create any obstacles.

A final paragraph points out that a development of this scale “that can effectively manage its emissions profile” would provide significant opportunities for New Zealand, maybe even bringing about “a step change” in New Zealand’s growth.  Given that the bar for the management of emissions is set so low what this seems to mean is that we’re soon to enjoy major economic benefit from the development of lignite. Am I being unfair in drawing the conclusion that this counts for the Minister ahead of any climate change concern?

The kindest thing one can say of the Minister and the Government he represents is that they have as yet no adequate conception of the magnitude of the threats that come with climate change. I’ll do them the courtesy of presuming that if they did they would have made it very clear by now that the lignite will stay in the ground.

[Mock Turtles]

Licking lignite

Jeanette Fitzsimons raised the alarm in a recent Herald op-ed over Solid Energy’s plans for Southland lignite. A very justified alarm. She wrote of well-advanced plans to use more than 3 billion tonnes of economically recoverable lignite from three fields in Southland. Big plans, of which New Zealanders are hardly aware. First off is the transformation of lignite, by drying it, into briquettes for Fonterra’s milk-processing plants and for export. Only 100,000 tonnes a year in the pilot plant to be built next year, followed by a full-scale plant many times larger. Next are plans to convert lignite to diesel, with the claim that all New Zealand’s diesel could be produced this way. The third big plan is the conversion of lignite to urea.


It’s the increase in greenhouse gas emissions associated with this vast development that concerns Fitzsimons. Her article rests on the arguments of James Hansen that the use of coal must be phased out over the next couple of decades. And she’s not buying the claim of carbon compliance:

“Solid Energy says all the emissions will be ‘offset’. But increasing the amount of biological carbon that cycles between atmosphere and plants can’t compensate for putting more fossil carbon into the system, even if our ETS scheme pretends it can.

“Paying money is, in the end, not a get-out-of-jail-free card for increasing pollution.

“These huge lignite developments are close – Solid Energy intends to start building next year. Any hope we had of reducing our greenhouse emissions would be lost.”

Her conclusion is robust:

“As citizens, we need to refocus our domestic action to tell Solid Energy and the Government by every means available to us to keep the coal in the hole. Every tonne of lignite New Zealand keeps in the ground is 1.5 tonnes of carbon dioxide that doesn’t get into the atmosphere.”

I agree entirely, and wonder what is going on in the mind of the Minister of Energy and others in government as they contemplate the proposed activity of the government-owned company. It’s not as if there is any requirement for lignite in something essential like our electricity generation, no lingering imperative that we carry on using it until we can replace it with renewables. The only imperative in the proposed lignite exploitation is that we not leave any resource stone unturned in the drive to greater economic wealth.

I don’t know how much thought the Minister gives to the counter imperative that we take every step open to us to prevent the continuing build-up of greenhouse gas emissions in the atmosphere. There is perhaps a cautionary note in the reference to coal in the Draft Energy Strategy, but it’s far from specific:

“New Zealand’s extensive coal resources currently contribute to electricity supply security. Coal is also utilised by industry and is exported. Coal could potentially contribute to the economy in other ways, such as through the production of liquid fossil fuels, methanol or fertiliser such as urea.

“This potential is more likely to be fully realised if an economic way to reduce high levels of greenhouse gas emissions is found. Carbon capture and storage technology (CCS) will potentially be an effective way of utilising resources while reducing CO2 emissions.”

Moreover there’s nothing in Solid Energy’s plans which suggests that the lignite development is going to wait on CCS (if the technology is ever developed successfully). Meeting the slack requirements of the ETS is all they appear to have in mind, and that’s clearly no impediment to proceeding.

The Minister has a wide embrace. He welcomes every renewable energy development that comes along. In the same breath he waxes enthusiastic at the prospect of the discovery and urgent development of fossil fuel resources. If the Draft Energy Strategy is as close to his and the government’s philosophy as we’re going to get it appears the thinking is that we can fully exploit the fossil fuel resources while alternatives are being developed. And we should be getting on with it smartly while it’s profitable. It’s an opportunity which we would be foolish to miss. Indeed according to Chris Baker, CEO of the mining and exploration lobby Straterra, who followed up Jeanette Fitzsimons’ article the very next day, the lignite resource could be worth $3 trillion. He didn’t say to whom, but no doubt there would be trickle down.

How does this wealth stack up against the release of more atmospheric carbon as a result of exploiting the lignite? That’s a rhetorical question. It doesn’t matter how many trillions of dollars we gain if we lose a habitable world for our descendants in doing so.

If the government is serious about tackling climate change it should instruct Solid Energy not to pursue the lignite plans and relieve them of whatever dividend expectations that makes them unable to fulfil. If regulation is necessary it should legislate for it. It should tell the public that unless full carbon capture and storage technology is possible there can be no exploitation of the lignite fields because of the seriousness of the threat of increased greenhouse gases. That threat, it should explain, far outweighs the transient economic gain of fossil fuel development.

We can’t have it both ways. We can’t reduce emissions by increasing them. We can’t say we recognise the threat of global warming and at the same time expect to carry on with all activities which give rise to it. If Gerry Brownlee and the government think we can, they are deceiving themselves and us. Jeanette Fitzsimons is absolutely right. Keep the coal in the hole.

PS. Take a few minutes to send Gerry Brownlee an email to that effect. Remind him that he has a responsibility to the future. I’ve done so.