Lignite coal to stay in the hole

I am celebrating today after the news that Solid Energy will be dropping its Lignite project in Southland. This is a win for the climate and our environment and for Southland.

My thoughts are with Solid Energy’s employees who will be going through a time of great uncertainty. There should have always been a transition plan in place for workers and its time that we prioritise sustainable industries that won’t subject workers to this kind of uncertainty and boom and bust nature of the fossil fuel industry.

This project would have seen lignite, the lowest grade and dirtiest coal, dug up, destroying prime farm land, and turned into briquettes. The Parliamentary Commissioner for the Environment came out against the project and its climate implications. In her report she said: “Just one of the two proposed lignite-to-diesel plants would increase the gap between the international climate change commitment we have made and where our greenhouse gas emissions are headed by 20 per cent. If both proposed lignite-to- diesel plants were to be built, the gap would increase by 50 per cent”.  She also  reported that the industry is unfairly subsidised by taxpayers under the current rules of the Emissions Trading Scheme.

I’d like to say a big thank you and congratulations to Coal Action Network, and the locals in Southland who have been working hard on this issue for years to ensure a more sustainable future for Southland and Aotearoa. They’ve been doing the tireless work on the ground, highlighting the massive flaws in these plans, and organising the Coal in the Hole Summer festivals, which I have been to each time in the last two years.

Just a couple of days ago I urged the Southland District Council to make mining for lignite a prohibited activity in its new district plan in my op ed to the Southland Times and urged others to do likewise with our online submission guide. I also worked on a Member’s Bill that would ensure, under the Emission’s Trading Scheme, that Lignite projects are fully liable for the costs of the Greenhouse gas emissions they emit. I’m glad that in this case, the coal will remain in the soil and those Greenhouse gases won’t be released into the atmosphere.

Bill English today came out blaming Solid Energy’s smaller renewable investments for the company’s decline, which doesn’t stack up. As I pointed out in my blog a couple of weeks ago, it was the company’s coal projects which has contributed the vast majority of the company’s debt.

I hope that everyone who has worked hard to keep the coal in the hole will take a moment to celebrate this victory today.

20 thoughts on “Lignite coal to stay in the hole

  1. Oh goody.

    No jobs for workers.

    Salary for Gareth $150,000 + perks.

    Nothing wrong with that!

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  2. How ironic that fracking is the reason for the global coal price collapse. Natural gas, from fracking, has replaced it and driven down demand for coal.

    You should celebrate the fact people like you failed to stop fracking in the US.

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  3. And why didn’t we sell this pig when we had a chance? I’ll tell you why – ideology. “Don’t Sell Our Assets”.

    There is absolutely no reason for the government to own a coal mining company, and even less reason to own one that’s going backwards. It’s now worse than worthless, as the taxpayer will, no doubt, be left propping it up.

    Marvelous.

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  4. Partly, but mostly to do with supply.

    Natural Gas is at $3.32/MBTU – it was $9-10/MBTU during Bush years. They’re running out of places to store it.

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  5. Cheers, Gareth.

    I’m wondering what the Greens’ position is on the proposed government bailout. Personally, I couldn’t agree more with Idiot/Savant at No Right Turn:

    Let Solid Energy fail

    So, thanks to the management skills of that Mighty Atlas of Business, Don Elder, it looks like Solid Energy is on the verge of bankruptcy, with the government openly talking about a bailout. It shouldn’t be. Unlike our electricity companies, coal is not a strategic resource. Neither does it constitute strategic infrastructure, unlike Telecom, KiwiRail, Air New Zealand, or KiwiBank. We own it basically as a legacy problem: it was important once, back in the 19th and early 20th centuries, when coal literally drove the economy. But now we’ve moved away from coal-powered ships, coal-powered trains, and coal-fired electricity, its just an outdated relic (and a dirty polluting one at that).

    Thanks to climate change, its also a relic without a future. Rather than propping it up for another few years, so it can cause more damage to the global climate, we should let it fail. The government has let non-strategic SOEs fail before – notably Terralink (formally the mapping arm of the Department of Survey and Land Information – something else which used to be important). There’s no reason they shouldn’t do so again. As a bonus, this will also hold the banks to account for their poor lending decisions, rather than implicitly bailing them out as well.

    As for the jobs, fuck ‘em. If the government wants to run a giant jobs scheme, it should be something less environmentally damaging.

    @Muhamed Allam 4:47 PM

    You seem to assume that any economic activity that creates jobs is good, despite how much harm it does. Sure, I feel sorry for the Solid Energy workers (the real ones, not the executives who got the inflated bonuses supported by increased corporate debt).

    But it is a far more sound economic, social and environmental proposition to spend taxpayers’ money transitioning those workers to other employment in sustainable industries than to spend it propping up an SOE engaged in a disgustingly polluting dinosaur industry for which there is no long-term future.

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  6. @Arana 4:55 PM

    How ironic that fracking is the reason for the global coal price collapse.

    I guess so, but why pick the lesser of two evils when both of them are evil.

    We need to be looking to renewable energy, rather than the race to the bottom the fossil fools are advocating.

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  7. The solution, of course, is to give the Huntly power station to Solid Energy, and then they’ll have a vertically integrated business. The conglomerate can then decay over a few decades, and that’ll be the end of coal in NZ, for a good few decades at least.

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  8. Hi Gareth, You must be thankful that the employees of Solid Energy are saved. Lignite Coal Mines are dangerous like others. Health & Safety of employees was at stake. Opportunity Cost is too high in comparison to remuneration. Let’s name this celebration as Victory of Earth & Human-Life!

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  9. Coal Mines are very dangerous so you must be thankful that the employees of Solid Energy are saved.

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  10. ‘Coal Mines are very dangerous so you must be thankful that the employees of Solid Energy are saved.’

    Being a police officer is very dangerous. Lets get rid of the Law.

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  11. I’m wondering what the Greens’ position is on the proposed government bailout. Personally, I couldn’t agree more with Idiot/Savant at No Right Turn

    Wow! You’ve changed your tune.

    http://www.greens.org.nz/koa

    “The National Government’s plan to sell 49% of Meridian Energy, Mighty River Power, Genesis Power and Solid Energy is bad for the economy and the first step to full privatisation of these valuable public assets.”

    Selling would be bad for the economy, huh.

    As we’ve been trying to point out, at length, there is no reason for the state to carry the risk of these “assets”. The state has regulatory control, it has a controlling stake, it collects “dividends” on ALL profitable business in NZ by way of tax on profits, yet carries none of the risk (unless it wants to maintain a 51% stake).

    Why on earth own something when you already control and profit from it?

    Now we see the downside. The mindless ideology that demands we keep pigs like Solid Energy – Keep Our Assets – sees taxpayer money torched. In real terms, that means less money for hospitals, welfare, education and the rest.

    Marvellous. What fantastic leaders we have in this country.

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  12. I guess so, but why pick the lesser of two evils when both of them are evil.We need to be looking to renewable energy, rather than the race to the bottom the fossil fools are advocating.

    Because the demand still exists.

    People on here were telling me the Greens simply MUST fly a lot as cutting their energy use would make them less politically effective. The exact same rationalization exists for all energy use – it makes us more effective at whatever it is we do.

    So few people have shown much inclination to significantly reduce their own energy demand.

    When renewables provide the same energy for the same cost, then fine. Until then, energy demand remains, so doesn’t it make more sense to pick the lesser of two “evils” in the meantime?

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  13. According to military strategists in war collateral damage is unavoidable. And in various other conflicts these same military strategists would suggest, sometimes to save the villagers we have to burn down the village. . .

    I find war abhorrent and detest its very nature. But this is a fight, a battle, and a war of sorts to save our Mother. Our protector and provider for life itself, she is here for all species on this planet. Our Mother sustains every inhabitant – not just a chosen few who wantonly rape and pillage her for greed and profit.

    To these mining corporations, what is in the ground is sheer profit and theirs to be exploited. However, lignite is poisonous gold and a cancerous filled chalice that doesn’t sustain life, instead slowly smothers it. How dare these defilers shit on our Mother – our precious Mother Earth! Yes these lost jobs are worth it in the end. . .

    Gareth we are victorious in this battle, but sadly the war is far from won.

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  14. I think he must have been trying out the latest cannabis harvest. It must have been a spectacular one this year if it can inspire such lunacy. Meteria will be pleased, assuming she is still the party spokesperson on legalising cannabis.

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  15. I find it highly suspicious that, at a time coinciding with the National government’s program of asset sales, a key asset is suddenly allegedly worth a lot less. My bet is there is a lot more to this story then the public spin.

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  16. . The exact same rationalization exists for all energy use – it makes us more effective at whatever it is we do.

    No… Within the context of competition that rationalization exists.

    Where everyone pays the same and takes the same reductions (no competition), it is removed. Removing the coal as a power source does not cause a differential cost to be born by some but not others. It is not even important as this is one of the reasons that Greens are willing to accept fracking (provided it is properly regulated) to supplant the use of the coal while we build up the renewable sector.

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  17. I have always known that Solid Energy, as it was being run, was an expense to the State. Would always have been happy to see IT flogged off, but not the coal… There is certainly an opportunity for a private “solid energy” that has its focus on wood pellet fuels and other similar renewables, but only with a CO2 emission penalty that isn’t a joke.

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