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Right Decision – Wrong Reasons

25 February 2013

Right Decision – Wrong Reasons

Members of Canterbury Coal Action were this weekend celebrating the decision of Solid Energy to abandon its lignite projects near Mataura in Southland. But it’s not a simple “win” for the campaigners.

“We’re delighted that this decision means that millions of tonnes of coal will not be exploited,” said spokesperson Dr. Rachel Eyre of Christchurch. “It means less carbon dioxide emissions, less local health issues, less pollution in the air and the waterways. And of course, less upheaval for the local communities. So that’s great news.”

When the decision was announced by Solid Energy it was as part of a review of their business after the company was found to be $389 million in debt. The low demand for coal world wide has meant that prices have fallen and Solid Energy couldn’t pay its debts. The projects at Mataura were considered “not core business” and so are to be stopped.

“Solid Energy would like us all to think that this decision is based on a rational economic appraisal of the situation,” said Dr. Eyre. “But in fact they need to admit that lignite is a very poor quality coal, their potential business partners have all pulled out, and they have a lot of opposition in the local communities.”

Dr. Eyre visited Southland last month and spent time with some of the people who would have been affected if the projects had gone ahead. “It was upsetting to see people whose homes and communities would have been terribly affected if all this had been allowed to proceed. The talk of jobs being created was viewed as a joke – most of the jobs and money would have gone overseas, but locals would have had to contend with the mess, noise and pollution. We’ve heard from several people from Australia who have seen big miners come in and cause havoc for no local benefit.”

Dr. Eyre explained that Southland was an agricultural community which relied on farmland, clean water and a “clean green” image among its customers. “A large opencast lignite mine here would have been a disaster.”

Dr. Eyre admitted she was concerned that some of the “spin” from Solid Energy around the announcement showed that they still hadn’t really understood their situation in spite of losing millions of dollars, hundreds of jobs and their CEO Don Elder. “It looks like the culture of spin at Solid Energy runs deeper than just Don Elder,” said Dr. Eyre. “They are trying to imply that the company got into trouble because of its investments in renewable energy. That’s nonsense – the cost of coal has fallen, but renewable energy companies like Meridian are still profitable. Renewables are the future, whilst coal is a sunset industry.”

The Government is left with an embarrassing problem on its hands because Solid Energy is a state owned enterprise and it is currently valued at less than its’ debt. It has fallen a long way since it was tipped to be part of the asset sales programme. “Currently the Government couldn’t give it away. No one, in New Zealand or overseas, would want to invest in projects like these – they were based on misplaced belief in technologies like carbon capture and storage and a denial of the realities of climate change.” Dr. Eyre explained that in the future, Governments will need to put an effective price on carbon “not the ridiculously weak ETS we have now,” and that will inevitably raise costs still further.

“From Invercargill to China we are seeing a move away from coal – it’s a dirty fuel of the past. Biomass, wind, solar, hydro, and tidal are the energy sources of the future. New Zealand has a great opportunity to be in near the beginning of the renewables boom. Solid Energy can be part of that exciting future and we hope that the decision to abandon the Mataura lignite idea is a positive step in the right direction.”

It’s certainly great news for the communities in Southland and for the campaigners at Canterbury Coal Action.


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