Lignite: dirty brown forbidden fruit

By Bryan Walker 20/02/2011

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.