Papers released under the Official Information Act show State-owned mining company Solid Energy plans to open some new coal mines. Is this the way forward for energy in New Zealand? Is this how Solid Energy plans to dig itself out of the pit it is in – spend more money developing coal mines?
The company itself estimates the coal price needs to be around US$118-$140/tonne to mine economically. The Steel Index shows the benchmark Australian export price for hard coking coal is around $US$101/tonne at present, and even premium coal, which is unlikely to be found in a new mine, is still under that viable price.
Solid Energy has had to be bailed out and is now in the hands of its bankers due to over-reaching ambitions and poor oversight by its board.
State-Owned Enterprises Minister Tony Ryall agrees the over-riding factor for all Solid Energy operations, is the international price of coal. These plans look like throwing good money after bad.
Viable or not, this is about old thinking versus new thinking, supported by the Green Party. Coal is the world’s dirtiest fossil fuel. The last thing the environment needs is to burn more coal to put more carbon into the atmosphere.
Our future is not in coal. The International Energy Commission recommends every country leaves two thirds of fossil fuels in the ground.
We should be investing in new technologies, not dirty old ones with dubious returns. Green energy investment is one of the fasting growing sectors in the world, but it seems Solid Energy and its backers can’t see the wood for the trees.
Solid Energy will be looking to Fonterra as a potential major customer for these new mines. But using coal as the energy for processing milk, badly taints Fonterra’s milk and brand to say nothing of the nation’s green, clean image.
The Greens will push to have all New Zealand’s power generated by renewable energy. We will support biofuels so that large energy users like Fonterra can use sustainable, local resources such as woodchip-fuelled biofuel.