Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Solid Energy’s lignite should “remain in the ground": PCE

Solid Energy’s lignite should “remain in the ground” says environmental watchdog

by Pattrick Smellie

Dec. 9 (BusinessDesk) – State-owned coal miner Solid Energy’s plans to turn low-grade Southland lignite coal deposits into massive new industries “make no sense” and the coal should “remain in the ground”, says a report on the proposals from the Parliamentary Commissioner for the Environment.

The commissioner, Jan Wright, is particularly scathing of lignite-to-diesel production plans, because of its very high carbon emissions compared to other options, and says Solid Energy’s plans rely on massive taxpayer subsidies through the Emissions Trading Scheme.

At Solid Energy’s projected production rate of 35,000 barrels of diesel per day and a carbon cost of $50 per tonne, the cost to New Zealand taxpayers through the ETS would be almost $275 million a year.

If plans for two such plants eventuated, the cost would double and could represent an indefinite taxpayer subsidy.

However, Solid Energy is defending its plans to ramp up lignite conversion from around 2015, saying it planned to take responsibility for all resulting carbon emissions “through a range of approaches and technologies.”

“Our lignite projects will deliver significant value and jobs for New Zealand,” said Solid Energy’s new energy general manager, Brett Gamble, with potential to add $377 million a year to economic growth, assuming a world urea price of US$265 a tonne – a price lower than that achieved between 2006 and 2008.

Diesel from lignite could act as an “insurance policy” for New Zealand if, as expected, oil prices rise dramatically over coming years.

However, Dr Wright says next year’s ETS review should end the potential for major new carbon-emitting industries to be automatically eligible for the free carbon credits that existing heavy emitters are issued to help smooth the introduction of carbon pricing to combat climate change.

“It makes no sense that the ETS rules would lead to taxpayers subsidising…new investment in outdated dirty technology,” says Wright, who says large scale lignite industries would also compromise the environmentally pure image that New Zealand uses to sell its tourism and agricultural products to the world.

“New Zealand’s lignite should remain in the ground, at least until subsidies for its large scale exploitation are ruled out and mitigation options are proven sufficient and reliable.”

The 49 page report, which was held back from release on Nov. 23 out of sensitivity following the Pike River coal mine disaster four days earlier, says the plans by Solid Energy and L&M Energy to convert lignite variously to diesel, urea and exportable briquettes “would take the country in the wrong direction.”

The report says diesel from lignite has an emissions intensity factor of 5.8 per thousand litres, compared with 3.1 when manufactured conventionally from crude oil.

If made from renewable wood, diesel could be produced at an emissions intensity of just 0.3, making wood a more attractive option, says Wright.

However, the report also suggests that urea and briquette production would be relatively benign, compared to diesel production, although both would inevitably raise NZ’s carbon footprint since both would be new industrial developments.

Lignite-to-urea has an emissions intensity of 1.3 per tonne, compared with a weighted average for urea used in NZ of 1.2. Such urea is currently supplied from the Kapuni natural gas field by Ballance Agri-Nutrients and imports from Arabian Gulf states.

Briquettes from lignite have a lower carbon intensity at 1.7 per tonne versus 2.1 per tonne of sub-bituminous coal.

(BusinessDesk) 07:19:15

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>

ALSO:

Economy: Double-Dip Recession Next Year, But Housing Rolls On

New Zealand's economy is expected to slip back into recession early next year as delayed job losses, falling consumer spending, and the absence of international tourists bites into growth. More>>

ALSO:

Microsoft New Zealand: Microsoft Expands “Highway To A Hundred Unicorns” Initiative To Support Startups In Asia Pacific

New Zealand, 14 October 2020 – Today Microsoft for Startups launches the Highway to a Hundred Unicorns initiative in Asia Pacific to strengthen the region’s startup ecosystem. This follows the initiative’s success in India, where 56 startups were ... More>>

Fonterra: Farmers Taking Another Step Towards New Zealand’s Low Emissions Food Production

They’re hot off the press and intended to help take the heat out of climate change. Fonterra farmers are already among the world’s most sustainable producers of milk and now have an additional tool in their sustainability toolbox. Over the last few ... More>>

ALSO:

Electricity: New Zealand Remains In Top 10 For Energy Balance

The World Energy Council’s Energy Trilemma Index has become part of the energy dialogue both globally and in New Zealand. The Index illustrates the need for countries to balance energy security, energy equity and environmental sustainability. New Zealand ... More>>

ALSO:


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>

University of Canterbury: Proglacial Lakes Are Accelerating Glacier Ice Loss

Lake Tasman, New Zealand | 2016 | Photo: Dr Jenna Sutherland Meltwater lakes that form at glacier margins cause ice to recede much further and faster compared to glaciers that terminate on land, according to a new study. But the effects of these glacial ... More>>

ALSO:

Dairy: Fonterra Sells China Farms

Fonterra has agreed to sell its China farms for a total of $555 million (RMB 2.5 billion*1), after successfully developing the farms alongside local partners. Inner Mongolia Natural Dairy Co., Ltd, a subsidiary of China Youran Dairy Group Limited ... More>>

ALSO: