The high cost of lignite projects

UNDER WAY: Clutha-Southland MP Bill English turning the first sod at Solid Energy's briquetting plant in Eastern Southland.
JOHN HAWKINS/The Southland Times
UNDER WAY: Clutha-Southland MP Bill English turning the first sod at Solid Energy's briquetting plant in Eastern Southland.

On September 9 at Mataura, Southland, Finance Minister Bill English took a spade and turned the first sod on a suite of projects designed to be the largest industrial complex ever built in New Zealand.

If these projects go ahead, they will destroy hundreds of hectares of top-quality Southland farmland and raise climate-changing greenhouse emissions by billions of tonnes.

Most New Zealanders still don't know about these projects - which is strange, because we own the company that wants to build them.

The resource is lignite - or brown coal - the dirtiest, lowest- quality coal, which is more than half water. Dirty and inefficient to burn, too heavy to transport any distance economically, it is part way between peat and coal and some analysts refuse to describe it as coal at all.

The company is Solid Energy, owned by you and me until the Government carries out its plan to sell half of it, ultimately to foreign investors, who will provide the capital for these massive projects.

The plant being built now at Mataura is the very thin end of a very large wedge. Described as a "pilot plant" it will cost a mere $25 million, and use a mere 150,000 tonnes a year of lignite to make briquettes - a solid fuel that is just lignite with the water squeezed out.

The energy density of these lumps of dried, compressed lignite is higher, making it economic to transport it longer distances.

Solid Energy claims that burning briquettes has lower carbon emissions than burning lignite. However, when you include the emissions from the conversion process, the emissions are higher.

The main customer of Solid Energy's existing, small lignite mine at Southland's Waimumu is Fonterra's dairy factory at nearby Edendale. But lignite is too heavy and wet to truck further away.

Yet Fonterra has now said it will not use briquettes, dashing Solid Energy's hopes of a local market, so it has now turned its focus to export - assuming someone wants them.

Step two in what Solid Energy chief executive Don Elder has described as "a comprehensive strategy to unlock the value of Southland's lignite resource", is the plan for a briquetting plant, 10 times larger, in about a year's time, using 1.5 million tonnes a year (Mt/y). That means new, much larger, opencast mines with all the problems of dust, noise, trucks, processing machinery, and unknown effects on the water table on which farmers rely.

Step three is a joint project with Ravensdown using 2MT/y lignite to make 1.2 MT/y of urea - twice what New Zealand currently uses. It will be mainly for export but no doubt there will be a marketing push in New Zealand too for farmers to use more urea, intensifying our livestock farming, with more nitrogen ending up in our rivers.

Step four is the really big one - 12MT/y of lignite to make diesel. And here the climate change impacts are enormous. Burning a litre of diesel made from lignite will emit about twice as much carbon dioxide as burning our present diesel, made from petroleum. Efficiency and renewable alternatives would be a more sensible response to peak oil and rising prices.

Solid Energy knows it will not be pleasant living anywhere near these developments, so the company has bought up 4000ha of high- quality farmland around the proposed mines and processing plants.

This is changing the rural community as farmers give way to tenants and eventually to great black holes in the ground.

Climate change is already causing misery around the world with melting ice, loss of fresh water, and extreme weather events like droughts, floods and heatwaves. Leading scientists like James Hansen, who recently visited New Zealand, including a visit to the proposed lignite site, tell us that we are very close to a point of no return after which sea levels would rise, over time, by 20 metres and climate instability would make food production far more difficult. It is possible to pull back from the brink, Dr Hansen says, but only if we phase out coal completely during the next 20 years. No new coal. It's that simple.

The Government has a target to halve our greenhouse emissions by 2050 and to reduce them by 10 to 20 per cent by 2020, but no plan on how to do it. Our pathetic Emissions Trading Scheme will do little because there are so many exemptions and the carbon price is so low.

Solid Energy's suite of projects would raise our emissions about 20 per cent.

Dr Elder says they will take full responsibility for their carbon emissions. That is, frankly, nonsense. He relies particularly on Carbon Capture and Storage (CCS), a technology to capture and store the carbon dioxide underground. That is a hoax.

No-one is using CCS commercially anywhere in the world. Projects are falling over on a regular basis, largely because of cost. The cost of the infrastructure is likely to exceed the cost of the projects themselves and would capture only a fraction of the gas - maybe half. If this is feasible, why are they not installing CCS on the pilot briquetting plant? It is difficult to add it on afterwards. Furthermore, it can't be used on mobile emissions sources like vehicles.

One farmer has refused to sell his land to Solid Energy at any price. This week, more than 100 people - octogenarians, technical experts, students, mums and dads - will gather on his land, half a kilometre up the road from where Bill English wielded his spade, to discuss how to stop these lignite projects from going ahead.

They are doing it for their grandchildren, and yours.

Jeanette Fitzsimons is a former co- leader of the Greens

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