Fonterra’s coal-fired climate folly

By Jeanette Fitzsimons

Cross-posted from Coal Action Network Aotearoa 

Why would Fonterra spend several million dollars on a process lasting nearly a year, seeking planning consent for a huge new milk drier that it knows will never be built? Perhaps that’s not a lot of money to them – after all, one million is only three months’ salary for their CEO.

Fonterra’s proposed Studholme project, just outside of Waimate in South Canterbury, would see two new spray driers powered by two immense coal boilers – one 65MW, the other 50.

one lump or twoThis is the biggest new coal burning project in the country, with the hearing happening just as our Minister for Climate Change is about to travel to New York to sign the Paris agreement where we undertook to reduce our greenhouse emissions a totally inadequate 11% below 1990 levels. (It’s even more inadequate when creative accounting turns this into more like +10%).

Fonterra is already the second biggest coal burner in the country and grew its coal use by 38% between 2008-2013. They pay lip service to climate change but in practice are totally wedded to coal. Continue reading “Fonterra’s coal-fired climate folly”

Coal, climate change, and the New Zealand economy: winners, losers, and long-term users

Cross-posted from Coal Action Network Aotearoa

As the country reeled with the news last week that Solid Energy had gone into administration with a $300m debt, another event was happening in the Pacific that puts the debate in a context that it too seldom receives in New Zealand.

Sign on Kiribati's island of Tarawa. Photo: flickr
Sign on Kiribati’s island of Tarawa. Photo: flickr

On Thursday, Kiribati Prime Minister Anote Tong wrote to world leaders calling for a moratorium on new coalmines.

“Kiribati, as a nation faced with a very uncertain future, is calling for a global moratorium on new coal mines. lt would be one positive step towards our collective global action against climate change and it is my sincere hope that you and your people would add your positive support in this endeavour,” he wrote.

“The construction of each new coal mine undermines the spirit and intent of any agreement we may reach, particularly in the upcoming COP 21 in Paris, whilst stopping new coal mine constructions NOW will make any agreement reached in Paris truly historical.”

UK Economist Sir Nicholas Stern agreed: “The use of coal is simply bad economics, unless one refuses to count as a cost the damages and deaths now and in the future from air pollution and climate change,” he told Reuters (Stern’s full statement here).

In June, Pope Francis said in his encyclical that the use of “highly polluting fossil fuels needs to be progressively replaced without delay.”

Continue reading “Coal, climate change, and the New Zealand economy: winners, losers, and long-term users”

NZ climate policy shambles, and other summer reading

It’s summer down south, and New Zealand’s politicians have embarked on their summer break. It’s summer in Waipara too, and with yesterday topping 30ºC and today heading in the same direction, your blogger has immediate climate concerns of an irrigation and vine management nature to attend to. So, with apologies for what may turn out to be less frequent posting over the next few weeks, here’s a quick round-up of stuff worth reading.

The NZ government will be relieved to be heading to the beaches after being battered by a hail of criticism for their climate policies over the last week. Brian Fallow, the NZ Herald‘s economics editor, was especially direct in his dissection of NZ’s climate policy settings post-Doha:

The Government’s climate change policy is a shambles and a disgrace. Unless, that is, you are happy for the costs of the inevitable adjustment to a low-carbon future to be needlessly increased and pushed onto the young, in which case it is doing a great job.

Gareth Morgan joined in, calling for the government to come clean about what its policies really mean:

Continue reading “NZ climate policy shambles, and other summer reading”

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.

Oram on ETS debacle: Business Council for Sustainable Development ordered to shut up by big emitters; Nick Smith guilty of “breathtaking hypocrisy”

Fonterra and other big emitters have used their clout to silence the Business Council for Sustainable Development from commenting on National’s proposed changes to the emissions trading scheme, Rod Oram reveals in his Sunday Star Times column today.

…on November 5 Barry Harris, Fonterra’s head of milk supply and sustainability, delivered a withering speech to the council’s meeting. There were 31 other representatives of corporate members in attendance. Harris sharply criticised the council for what he considered its failure to represent the interests of members like Fonterra that “had a lot of skin in the game”.

The council’s insight into how opposed much of the public and some of business is to the ETS changes has clearly rattled some of its less sustainable members. According to some attendees, council chairman Bob Field, chairman of Toyota New Zealand, ordered council staff to stop making public statements on the ETS.

Perhaps Fonterra and Toyota believe that business can only be sustainable if it is protected from the costs of its polluting ways. The huge subsidies, of course, are their’s by right. Meanwhile, it remains to be seen if some of the less hypocritical members of the BCSD will make their voices heard.

In a coruscating column, Oram calls Nick Smith’s headlong rush in to bad legislation “breathtaking hypocrisy”, and quotes extensively from Smith’s comments a year ago when Labour’s ETS was being debated in Parliament.

Oram’s take on the current situation is right on the money:

National is making a dreadful mistake if it believes it can railroad through incompetent, damaging legislation hugely favouring heavy emitters.

At the next election, it will be easy for Labour and Greens to win support from the substantial number of voters who want an ETS that might actually cut emissions. Such an ETS would save the next government some $2 billion a year in subsidies to the heavy emitters, money voters would like spent instead on them and investment in new, clean technologies.

The whole column is worth a read. It’s Oram at his well-informed, combative best.