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.
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.
Solid Energy, NZ’s state-owned coal mining company, is promoting an alternative to an economy wide emissions trading scheme. According to Carbon News, the approach is being “heavily peddled to policy makers and others in Wellington”, and it is seen to have “great simplistic appeal”. Carbon News has made the document, A Durable Climate Change Strategy for New Zealand, available here.
The essence of the scheme, once you plough through Solid Energy’s reasons for disliking the ETS as currently proposed, is that the government should plant lots of trees, funded by a $1/tonne carbon levy applied across the economy. Lots and lots of trees — a million hectares of new exotic and native forest planted over the next 20-30 years. Solid Energy claims that “Kiwiforest” would provide enough cheap carbon sequestration to allow the economy to grow without the need to impose steep carbon prices. An ETS would only be introduced when there was a truly global interlinked network of carbon markets.
Sounds attractive, on the face of it. Who could object to planting lots of trees? Certainly not me. Unfortunately, as a national emissions strategy it looks too simplistic to be realistic, and on Solid Energy’s numbers delivers emissions reductions that aren’t credible.