Coal conversion recipe: whip ‘em, and spin it a bit

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.