If you've struggled to gauge the direction of this government, on energy efficiency policy at least, its ad libbing days are numbered. But the lignite to urea fertiliser proposal is fool's gold

If news emerged that the Energy Efficiency and Conservation strategy had been “axed” in a week when you were quite coincidentally formulating another Pundit post about not very joined-up thinking you'd think... nice.  Except that it didn't happen; it was a Labour beat-up .

Mischief-making  Opposition spokesperson  Charles Chauvel  would have realised his mistake, if  he'd  spent 10 minutes reading the Energy Efficiency and Conservation Act 2000 (the Act), and checking the Gazette. The media report on which he based his press release condemning the "axing" was misinformed. It might have suited him to remain misinformed: tit for tat and all that. Pre-election, the Labour government’s energy efficiency strategy suffered from National’s mischaracterisation of it.

Under that Act, the Minister of Energy must ensure that, at all times, there is a strategy in force  that promotes energy efficiency, energy conservation, and the use of renewable energy sources. “Axing” isn’t an option, nor is  ministerial sneaking around, short of repealing or significantly amending the Act. If the minister determines that the strategy should be replaced, he (in this case, Gerry Brownlee) must publicly notify his intention, and ensure that a replacement strategy is promulgated in accordance with the statutory process. That process requires public consultation and submissions. “Publicly notify” means publishing a notice in one or more daily newspapers circulating in the main centres, and in the Gazette, and on the internet.

On August 3, 2009 Brownlee gazetted his decision to replace the strategy. Until it is replaced, the current one remains in force.

The previous government’s strategy sets out half a dozen broad brush objectives, for example, “warm dry healthy homes with improved energy costs”, “reduce transport system energy use and greenhouse gas emissions”, and “90 percent of electricity generated from renewable resources by 2025”. Each of these is underpinned by more detailed proposals, whose degree of specificity varies, from “make decisions” or “publish policy”, to “10 percent reduction in public sector energy use per FTE by the end of 2012 compared with 2006/07”, “introduce fuel economy labelling for light vehicles”, and “subsidise an additional 5.7 million compact fluorescent lamps by the end of 2009”.

This government's revision isn’t surprising. The two surprises are, first, that it’s taken the best part of a year for a formal announcement to emerge when the Act requires it “as soon as practicable”. After all, revision of the policy was notified on the Energy Efficiency and Conservation Authority (EECA) website on April 6 , and later that week in the National-Greens working arrangement. Brownlee even flagged his intent back in February, in a section of his "first major speech" as minister titled "reviewing the energy strategy". Second, that the Opposition spokesperson not only doesn’t read the Gazette; if his press release is to be believed, he's managed to miss this whole series of developments in his shadow portfolio that fall not far short of ministerial knicker-waving.

The 2007 strategy reads like a Clark government manifesto. Its revision is a corollary of all the other things this government has already announced it isn’t going to do. It may also be a reaction to Jeanette Fitzsimons’ continued use of it as a vehicle for accountability, for example, in the Greens' "

Big Affordable Climate Change” proposal released on August 4. The strategy gives shape to the work of the EECA. For Brownlee to get the Authority that he administers heading in his direction, rather than the previous government’s, the strategy had to be revised.

What emerges from the revision process is going to be fascinating, for two reasons.

First, the current strategy and, indeed, the Act itself, were both Fitzsimons’ work. Under the memorandum of understanding between National and the Greens, Brownlee has agreed to collaborate with Fitzsimons on updating and revising it. Whatever emerges at the end of that process will be indicative of the Greens’ influence on this government.

My heart goes out to Fitzsimons, though, who must be having to perform what would be an anatomically remarkable feat at the best of times – simultaneously holding her nose and breathing through it.

Second, the government will be forced to do what it has not deigned to do to date: articulate its policy. Under the Act, the strategy must address certain requirements. The government must state its policies and objectives; set targets that are measurable, reasonable and practicable; and say how it will achieve them. As a matter of principle, you’d hope and expect that the onus will fall on Brownlee to explain, in relation to each ditched proposal, why it was not viable. All this will be a huge departure from the pretty random approach we’ve seen to date.

Which brings me to Southland lignite coal, the example of not very joined-up thinking I mentioned earlier.

The lignite to urea fertiliser proposal hit the headlines in the very week the prime minister was busy big-noting our “Global Alliance on sustainable agriculture” credentials.

It’s a Solid Energy feasibility study, not a government proposal. However, as a state-owned enterprise, you’d expect Solid Energy to defer at least a little bit to its minister’s expectations. The proposal’s aggressive backing by Conor English, Bill’s brother, on behalf of Federated Farmers might be another wee straw in the wind – or not, because, superficially, the proposal looks good for farmers.

Having spent the last several years purchasing or obtaining access rights to lignite in Southland, Solid Energy divines that the best use of this (it’s not an easy thing to find acceptable uses for) is to convert it to urea fertiliser. Building and running a plant will create jobs for Southland, satisfy domestic dairying demand that is currently at the whim of a fluctuating international market, and have billion-dollar export potential. Pattrick Smellie reports on its economic prospects, here and here, including downstream conversion to diesel.

However, it’s been called “a triple hit on the environment” by the Sustainability Council’s Simon Terry. The correlation between urea application and nitrous oxide emissions is well-understood. Some disappears on application; then cows eat the nitrogen-laden grass and emit more when they pee. Nitrous oxide is a greenhouse gas, a culprit in ozone depletion, and  fresh water degradation  also  occurs from  the  nitrogen run off.

If demand for urea  was constant, the only live question would be whether to import it or not , and Terry's argument would be pretty substantially undercut. Martyring ourselves economically won’t help. However, I still think he's on the side of the angels, for these reasons.

English and Don Elder, the Solid Energy chief executive, say that if a plant was built, it would be “fully carbon compliant” with the emissions trading scheme. Subtext: not only “fully”, but “gladly”! If the scheme continues in a similar vein, the obligations on Solid Energy et al will be small; the “trickle down” effect of a boom in Southland and propping up dairying would have to be more of a flood to compensate. It’s not really a response, either, because compliance is not the same as an emissions reduction path.

Then, there’s talk of nitrification inhibitors, and “biofeedstock options”. If that’s a fancy way of saying “feeding cows stuff other than grass” then … um … why would you be buying urea, again?

We can deduce that the Global Alliance will spend its time dreaming up whizzy scientific ways to breed and feed and house ruminants, and calling it original thinking. I’d call it more of the same, and kind of a circuitous route to sustainability – make a big mess, clean it up again, and we’ll all clip the ticket on the way round. Genius.

The pollution risk is known; the capacity to alleviate speculative. Terry has been an advocate for the use of nitrification inhibitors, but every time he tries to talk about it, Charlie Pedersen (English’s predecessor) comes on grumbling about how it’s just not that simple for farmers. The government  and farm lobby position has been that there’s little we can do about agriculture, in setting an emissions reduction target. And yet, when it comes to an economic rev-up it's  evidently a no brainer.

TVNZ reported  last week that worms, mites and nematodes are the way to the future (yep), and a newsworthy scientific development (er… no, ask an organic gardener, or your grandparents). Described as an "underground breaking new study by AgResearch and Massey University," a scientist told us that the tiny creatures play a vital role because "they excrete little poos that are high in nutrients that are really good in the soil". It was great to see this reported – a rare PR coup for sustainability – but the contorted white lab-coated angle necessary to make the news was very funny.

The trouble with worms is, they do what they do for free, for love, just because they can; only the soil gets rich. Urea fertiliser is among farmers’ highest expenses; humusy wormy soil sequesters carbon, rather than emitting it. Turn the thinking inside out, and there’s your profit motive.


Comments (5)

by Claire Browning on October 05, 2009
Claire Browning

Jeanette Fitzsimons has been field researching the "alternative" (as in, non-status quo, urea free) approach. She writes:

It’s urea that makes it possible to run five cows per hectare rather than two, and increases milk production.

It’s also urea that causes cow urine to emit higher levels of nitrous oxide and the higher stocking rate also increases it. Along with climate changing emissions it greatly increases the runoff from farms to waterways, increasing nitrate levels and faecal bacteria in the rivers we want to swim in or drink from.

But it’s also urea that makes farming profitable, right?

Wrong. I’ve visited a number of dairy farms in the Waikato recently who have given up using urea and dropped their stocking rate. The extra milk they could produce isn’t worth enough to pay for the urea, for the bought in feed to enable them to run those high stocking rates, and to pay for grazing their young stock off the farm to make more room for milking cows. If they are also able to claim the organic premium, they are laughing all the way to the bank. They also tell me their stock are much healthier, their vet bills halved or better, their soil micro-organisms more abundant.

She links to a further costed and referenced piece here.

by stuart munro on October 05, 2009
stuart munro

I suppose some conventional farmers are not used to it yet, but as you say, it is in things like the organic premium that NZ can find the segmentation that will enable them to prosper in a global market. The famous Kobe beef of Japan, and Korean Hanoo, are fine models for our industry. The world really wants safe clean food, the safer and cleaner the better.

If we don't take that route, crude mass manufacturing involves pitfalls like http://www.nytimes.com/2009/10/04/health/04meat.html?scp=2&sq=e%20coli&st=cse (very dangerous strains of E Coli in US Beef)

by Claire Browning on October 06, 2009
Claire Browning

I'm with you on the first point, Stuart, but am not sure it's necessarily very closely connected with the second. It's a big leap, to say NZ non-organic => US-style food outcomes, particularly for our dairy and beef. A cautionary tale, though, I guess.

"Organic" isn't a panacea either, without a careful look at what people mean by it. Reducing chemical inputs is great, but an organic shop these days looks quite a lot like an ordinary supermarket with its stock of processed, packaged, often imported "convenience" food - just at premium prices. You have to ask whether that's better for either us or the environment than something local, fresh, sustainably grown, but not organic.

by stuart munro on October 06, 2009
stuart munro

Organic is much like Keynesian economics - it does work better than everything else - but it's a full time job keeping it working that way.

The US style - the commodification of food products, is philosophically a very slippery slope, and was probably established by slave/plantation agriculture that was established there centuries ago.

If you commodify everything, you end up in a race to the bottom on production price and safety issues, and indirect values like local environmental impacts, especially delayed ones, are wont to go by the board.

NZ made this error bigtime when it licensed foreign vessels to fish our eez. The ministry decided to favour boats with fish meal plants, on the basis that fishmeal is the recycling of offal and heads etc. Now, prior to the QMS, this made some sense, but subsequent to it, meal plants became a license to 'recycle' nontarget species, or fish spoiled by overcatching - thus evading the control costs the QMS was designed to impose. This meant Russian vessels, and subsequently Norwegian designed filleter vessels, which drastically reduced our major fisheries for low end product like meal, and fillet block. Management fail.

The reverse of the commodification path is the promotion and preservation of unique product values - regional product identification, for example, and various levels of standards which might include several organic ratings, grassfed, and possibly preslaughter feeding practices to maximise taste or tenderness.

High end product does not become feedstock for industrial disasters like the current US E Coli & CWD outbreaks. Producers of high end product want skilled workers who won't screw it up, and will pay them for that skill.

The practices described in Ruth Ozeki's My Year of Meat, and by Upton Sinclair in The Jungle, do occur elsewhere, but nowhere so badly as in the US (no documents on China yet though). I had rather NZ did not travel so far down the food commodity path, and there is a fair economic argument for not doing so.

by Claire Browning on October 06, 2009
Claire Browning

Under the memorandum of understanding between National and the Greens, Brownlee has agreed to collaborate with Fitzsimons on updating and revising [the strategy]. Whatever emerges at the end of that process will be indicative of the Greens’ influence on this government.

My heart goes out to Fitzsimons, though, who must be having to perform what would be an anatomically remarkable feat at the best of times – simultaneously holding her nose and breathing through it.

I now understand that Fitzsimons is not actually involved in writing the new one.

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