Solid Energy wants to open up ‘new energy’ and other things: lignite resources, public debate, the company’s own mind, apparently. Shame those dangerous radicals don’t have much to say worth hearing. Shame if they had to be booted out, for asking the wrong questions

“This is not a forum for interest groups to represent their position on wider issues, nor is it appropriate to use this meeting to make political points. Anyone who tries to disrupt will be asked to leave,” says Solid Energy’s chairman John Palmer, adding this eviction policy to the security guards, and bags-at-the-door.

Solid Energy doesn't want its AGM “sidetracked before it starts”. It’s not that Palmer’s scoring political points himself, about interest groups’ credibility or anything. He wouldn’t be implying that they’re dangerous radicals, or anything. If that’s what he meant, he’d say so. He’d accuse them of “scare tactics, emotion and half-truths,” perhaps.

Later on in the meeting, he does.

This year’s annual report, and the AGM speaking notes, call lignite ‘new energy’. Lignite isn’t new; it’s low-grade soggy coal. Solid Energy plans to transform it, to other inputs: a better class of coal, diesel, and fertiliser. Doing something useful with it would be new.

Their opponents see it as more of the same, only worse — yesterday's emissions-intensive strategy, that must be phased out, soon.

There was a small ‘interest group’ presence at the AGM: a whole two people at least, one polite enough not to get himself kicked out, the other silent.

Solid Energy’s defensiveness is arguably a little ridiculous, but an SOE trying to be front-footed doesn’t want to suddenly find itself on the back one. They’re tippy-toeing round the spectre of Schedule 4.

Gerry Brownlee and his grumpy miners can blame so-called ‘greenies’ and ignorance all they want, for the failure of that debate, and they do. Brownlee’s proposal fell apart, in truth, because it was full of holes. Solid Energy won’t make the same mistake: they want, well, a rock Solid business case first.

They’d like to script the whole lignite conversation, as carefully as their AGM. They’re laying the foundations so thoroughly, we might wake up one day and find the factories all but built:

We are taking a proactive information-sharing approach with key stakeholders and the community. This runs the risk of raising either expectations or opposition long before the final project is agreed. That is a risk that we will continue to take to ensure an informed public discussion. Some opponents we know will continue to use scare tactics, emotion and half-truths to denigrate these potential developments in advance of a compelling business case that is acceptable to the wider New Zealand community interested in gaining sustainable wealth. We will be aware of this, but not deterred by it.

The recent public discussion on wider resource development is a clear example. The discussion on resources in Schedule 4 land was only a discussion about Schedule 4. The real discussion that needs to take place is about resource development for New Zealand and how that should occur. New Zealand is at an economic and social crossroad. If we continue to fail in a constructive public discussion about our future wealth, and how and where that should come from, the social and economic consequences are clear and dismal. This company is prepared to take a stand in promoting discussion about resource development, the issues about sustainability and environment that surround that, and the future wealth that will be denied if we take a closed mind about those issues. As a company we are well positioned to take part in both the debate and the development. We have an open mind about the outcome but we cannot allow the discussion to be sidetracked before it starts.

I wonder when this “discussion” (the constructive, fully informed, open, public one) is actually going to start, then? Some time before, but not "long before", and maybe some time after, “the final project is agreed”?

These are the feasibility stages. It’s not exactly premature, you might think, to observe that until Solid Energy can guarantee no emissions risk, which plainly is not the present case, these projects aren’t going to be feasible, ever.

Meanwhile, we press on. All the Southland lignite conversion projects have advanced “significantly”. During the 2011 year, construction of a demonstration-scale plant for lignite ‘briquetting’ will start — drying out the coal, and raising its energy content, on par with other coal.

The coal to urea for fertiliser, and coal to crude oil for transport fuel projects “are still at a very early stage with important technology and economic issues requiring detailed work”. There’s a partnership with fertiliser company Ravensdown, to investigate coal to fertiliser. There’s an agreement securing exclusive NZ rights to coal to crude oil technology. In 2011, work will go on, to further develop the technology, and pilot plant plans.

Things seem further advanced on the production side than the carbon offset side, where the tippy-toeing turns into a nice tap-dance.

“Taking full responsibility for greenhouse gas emissions is a key consideration in all our developments. We expect our lignite-based plants to achieve full carbon compliance in accordance with New Zealand legislation and requirements”. And, “We are investigating a range of options to help reduce or offset CO2 emissions,” including carbon capture and storage, and bio-sequestration.

Roughly, that’s technology — processes to capture and reuse emissions safely, or geo-engineering, to try to lock them away again underground — and trees — tree-planting, and possum and deer control work, to grow native forest carbon storage. In 2011, Solid Energy wants to “refine [its] portfolio of prospective carbon capture and storage locations”.

The company is working hard, at some cost, towards “environmentally responsible coal mining”. In the end, for a few reasons, it’s still coal mining, and still, in the case of lignite, an oxymoron.

There’s the fossil vs active carbon argument. There’s the basic economics argument: the more coal and fossil-based fuel on the market, “the cheaper it will be, and the more that will be used”, delaying clean tech.

And third, every aspect of these new ventures, however well-intentioned, is a new phase of the global carbon experiment — the uncontrolled experiment. Not very 'environmentally responsible', to gamble the future of the whole planet.

On one hand, there’s relative certainty and simplicity, if a little rough on one SOE. On the other, Solid Energy says ‘trust us’. We don’t exactly know what we’re doing, but we mean well.

Their annual report cites Colmar Brunton research: “62% think that we should make more use of our coal resources (the highest number since we began this survey in 2004)”; “78% of those unaware of clean coal technology are more positive if technology can be used to reduce pollutant emissions”; “79% think that it would be good if coal could be converted to transport fuel to keep prices at today’s level”.

It sets this sort of helpful, impartial information against those who, as John Palmer told Morning Report the following day, would “say no at any cost”. I just don’t hear anyone saying no at any cost: there is, however, a sector saying ‘no’ to a risk that is fatally high.

Comments (13)

by Tim Jones on October 28, 2010
Tim Jones

I was the 'polite one' at the Solid Energy AGM, and the question I asked was: if Solid Energy digs up and burns the 1.5 billion tonnes of lignite reserves it claims to have (whether directly, or by converting to liquid fuels etc), how many billion tonnes of greenhouse gases will be released into the atmosphere?

To my surprise, in between a lot of waffle about how mining and burning NZ lignite would actually be good for the atmosphere, Don Elder answered my question. He said that 2 tonnes of CO2 would be released into the atmosphere for each tonne of lignite burnt.

In other words, if all this lignite is used, according to Don Elder of Solid Energy himself, 3 billion tonnes of CO2 will be released into the atmosphere. (Some other sources say the amount would be smaller, but still over 2 billion tonnes.)

That's equivalent to almost a year's worldwide increase in atmospheric greenhouse gases. And that's why Solid Energy's lignite plans - which are, utlimately, the Government's lignite plans - have to be stopped.

Well done for keeping on speaking up about this issue!

by Simon on October 28, 2010

Wow, Tim!

Good on you for surviving being the "quiet one" at the Solid Energy AGM and good on you for that very good question for Elder and Palmer!

Good post too, Claire. It appears that the management of Solid Energy has its own 'groupthink' that allows them to ignore oxymorons and to accept cognitive dissonance. How else could Solid Energy see the Schedule 4 debate as a 'failed public discussion' or think that they (Solid Energy) has an open mind but their opponents have 'closed minds'.

by Claire Browning on October 29, 2010
Claire Browning

Whatever else one may say about the Schedule 4 debate, at least we knew we were having it.

by Judy Martin on November 01, 2010
Judy Martin

I really, really hope they don't persist with this one. I promised myself a while ago that lignite mining was the one cause that would have me camping outside the mine and lying down in front of bulldozers, but I'm getting old now, and the ground is so hard and cold, and I have so much else to do...

Thanks for keeping on reminding us, Claire


by Judy Martin on November 04, 2010
Judy Martin

The debate is becoming more public anyway [links to Jeanette Fitzsimons: Keep coal in the hole, or green efforts will remain futile -- Ed].

Interesting to see the lobbyist's litany of tired old excuses in response to Jeanette [Chris Baker: Clean technology the only alternative to coal mining] - we'll get clean technology, China and India aren't going to stop, we need steel to make windmills, don't we? think of the money, jobs, jobs, jobs... Almost nothing about the lignite "resource" that Jeanette is talking about, and nothing about the tonnes of carbon emissions.

by Claire Browning on November 04, 2010
Claire Browning

Ah-hah. The declaration of war. The opening salvos. Been waiting for them.

Thank you, Judy.

Bless Chris Baker ('the lobbyist'). He is a gift that keeps on giving, and he's absolutely right: coal will eventually be replaced by something else, or we might one day develop technology/techniques that let it be burnt cleanly. In which case, fire away.

But on lignite, the question is not so much whether to stop ("If New Zealand were to stop using coal ... "), as whether to start.

On coal, and its replacement, the questions are economic, and answers to them won't be found in last year's bible.

There's also the question of time. That year's worldwide increase in emissions Tim Jones talks about comes in a context where (without factoring that in), emissions must peak by 2015.*

On the technology, Chris says the necessary technologies need to be developed, for carbon capture and storage. Just like the substitute green technologies.

By all means, let's be realistic -- and let's also be even-handed. Solid Energy says it doesn't have all the answers yet, but that won't deter it from trying. Ditto green alternatives.

Other imperatives should, however, deter SE from trying. You know -- like having a biosphere that works, so we can live in the brave new world, once we arrive. Or deter it from speculating, which is what it's doing currently, with all the rest of us putting up the stakes.

* Just to try to put in some context the urgency of this.

by Denis Tegg on November 04, 2010
Denis Tegg

Aah yes ...Chris Baker the lobbyist the gift that keeps on giving.... and giving.

Only 2 weeks ago Straterra responded to the NZ Parliament report "The Next Oil Shock" by suggesting NZ was "cushioned from oil shocks".

I had some fun dissecting that proposition here.

by Claire Browning on November 04, 2010
Claire Browning

Nicely filleted.

As I'd just finished saying to someone else: Chris is a master at telling only half of the story, getting the other half wrong, and immolating straw men ... but that don't stop him trying.

I guess he figures history shows convenient untruths seem to be about all it takes, to win climate wars.

[PS. I was reading that report this morning, btw, wholly coincidentally. That's a post for another day.]

by Denis Tegg on November 04, 2010
Denis Tegg

It's great that you are intending to post on the Oil Shock report. As with the lignite issue what is missing is any robust debate.

Politicians avoid the oil shock subject like the plague, and I continue to be astounded at how little attention is being paid to this issue by our mainstream media. What I wonder could be more newsworthy than a predictable and imminent event which could force the much of World's, and NZ's economy into a series of recessions?
I have assembled a summary of reports on oil depletion from credible international organisations.  The hyperlinks may be of help in researching the subject.

by Save Happy Valley on November 04, 2010
Save Happy Valley

The ironic thing is Solid Energy could transition into a clean energy company and make clean fuel: it owns Biodiesel NZ, our largest biofuel company.

How much longer will Dr Don Elder be the CEO of Solid Energy and would a new CEO be prepared to change direction? or a new government issue a directive, forcing it to?

by Claire Browning on November 05, 2010
Claire Browning

Thanks, Denis. I didn't know about your blog before, but I'm really looking forward to having a hunt around on it. Thanks.

SHV, if you have a look at Solid Energy's annual report, you'll see that is their new narrative. They would argue, I suppose, that it wouldn't be a change in direction; they're evolving that way anyway.

They want to try to squeeze lignite into that category.

I, and others, think the lignite part is expedient and dangerous nonsense; and am sceptical about how much of the new narrative is greenwash. However, they have recognised the opportunity.

If I understand correctly, they're also saying that a coal to crude oil (to diesel) facility could equally be a biomass to diesel facility. I blogged about that here.

by Claire Browning on November 05, 2010
Claire Browning

There’s an agreement securing exclusive NZ rights to coal to crude oil technology.

I got that from the annual report. I was referring to the IER agreement. It's already out of date, although work is continuing. Hat tip: Denis.

by Save Happy Valley on November 08, 2010
Save Happy Valley

If you look at the funding priorities of Solid Energy though it is a coal and Lignite company, with a tiny bit of clean energy on the side. If they dropped Lignite and invested in renewable energy as their focus, it would be a change in direction. Maybe a new CEO is needed for that to happen.

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