Political Consensus Grows Around The End Of Thermal Coal

For anyone still thinking that mining coal and burning it to provide heat or create electricity (that is, mining thermal coal) is a good way to make a buck, August 2015 was full of bad news.

First, Wellington’s Dominion Post newspaper said in an editorial that it was time for New Zealand to slash its coal use. Then, the same day, Genesis Energy announced that it would close the coal-fired power generators at the Huntly power plant by 2018.

No more coal at Huntly ... who'll be next to abandon coal?

No more coal at Huntly … who’ll be next to abandon coal?

But the writing was appearing on the wall even before these announcements. Not only had the thermal coal price dropped precipitately in response to the rise of renewable energy and environmental concerns in coal’s major markets, but there is a growing political consensus that thermal coal mining in New Zealand must stop.

This consensus does not yet include the National Government. While Energy and Resources Minister Simon Bridges welcomed Genesis Energy’s Huntly decision, and noted that it created further opportunity for renewable energy, he conveniently ignored the Government’s continuing subsiding of fossil fuel mining and use and lack of support for renewables.

The Green Party has long opposed coal mining, and now Labour and New Zealand First are, at least partially, moving in the same direction. In response to the Government’s statement that state-owned coal mining company Solid Energy might be facing liquidation, Labour Party leader Andrew Little – himself a former head of the coal miners’ union, the EPMU – drew a distinction between using coal for heating and power generation, which he agreed was on the way out (audio at 1:41), and using coking coal for making steel, which he said was “part of a green economy.”

New Zealand First’s Richard Prosser was similarly bullish on Solid Energy’s future, but both in his reported comments and in separate discussions with Coal Action Network Aotearoa, NZ First has drawn a distinction between coking coal and thermal coal. New Zealand First’s 2014 election policy calls for a progressive phaseout of coal:

The most effective way to reduce the build-up of greenhouse gases in the atmosphere (primarily carbon dioxide and methane) is to progressively phase out the burning of fossil fuels, especially coal, and instead use renewable energy eg wind-power, photo-voltaic electricity from sunshine, wood fuels, etc. (Climate Change section of NZ First Environment and Conservation policy)

When we met with New Zealand First, they advocated a similar position to the Labour Party: that is, they expressed continued support for coking coal, but agreed that it was time to move away from the mining and burning of thermal coal.

But while businesses and political parties are moving to end the use of thermal coal, there is one large New Zealand company which is bucking the trend – and that, of course, is Fonterra which, as we reported last month, has increased its coal use 38% since 2008 and plans a further major expansion of coal-fired milk drying plants. Fonterra’s low-value-add, high-energy-input business plan is coming unstuck as global milk prices fall. It’s time for Fonterra to take another path.

Though the political consensus is growing against thermal coal, Labour and New Zealand First are both continuing to back the mining of coking coal – that is, coal used for steel production – even though the coking coal price has also slumped, and burning coking coal is no better for the climate than burning thermal coal. You can read Cindy Baxter’s take on the shaky state of coking coal in her recent analysis of the state of play in the coal industry.

The message to companies such as Fonterra is clear: by backing the increased use of thermal coal, you are on the wrong side of history, the wrong side of science, and the wrong side of a growing political consensus.

The Field Trip to Failure

By Zella Downing, of CANA and Coal Action Murihiku

The Australasian Institute of Mining and Metallurgy, the AusIMM, focuses on “promoting excellence across all professional disciplines through advocacy and provision of continuing professional development opportunities.”

New Vale lignite mine, Mataura, Southland.

New Vale lignite mine, Mataura, Southland.

One such development opportunity might have been the AusIMM’s  upcoming field trip this Saturday to the lignite fields of eastern Southland, as part of its upcoming conference – except the proposed development of those lignite fields bears no kinship with “excellence.”

The proposed development of the lignite was one of Solid Energy’s biggest failures. They spoke boldly about the wealth and glory that would flood the region, but the project was a complete washout, and its exorbitant cost helped lead Solid Energy into financial ruin.

Promotional material for Saturday’s fieldtrip describes the aborted briquetting plant as “the initial step in [a] thwarted lignite development strategy”. Promoters need to say something like that because it would be impossible justifying a field trip to a failure. This plant failed to produce the wee energy sumptuous briquettes that it said it would produce because they were plagued with difficulties. GTL’s North Dakota plant had to be closed after spontaneous combustions.
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Coal, climate change, and the New Zealand economy: winners, losers, and long-term users

As the country reeled with the news last week that Solid Energy had gone into administration with a $300m debt, another event was happening in the Pacific that puts the debate in a context that it too seldom receives in New Zealand.

Sign on Kiribati's island of Tarawa. Photo: flickr

Sign on Kiribati’s island of Tarawa. Photo: flickr

On Thursday, Kiribati Prime Minister Anote Tong wrote to world leaders calling for a moratorium on new coalmines.

“Kiribati, as a nation faced with a very uncertain future, is calling for a global moratorium on new coal mines. lt would be one positive step towards our collective global action against climate change and it is my sincere hope that you and your people would add your positive support in this endeavour,” he wrote.

“The construction of each new coal mine undermines the spirit and intent of any agreement we may reach, particularly in the upcoming COP 21 in Paris, whilst stopping new coal mine constructions NOW will make any agreement reached in Paris truly historical.”

UK Economist Sir Nicholas Stern agreed: “The use of coal is simply bad economics, unless one refuses to count as a cost the damages and deaths now and in the future from air pollution and climate change,” he told Reuters (Stern’s full statement here).

In June, Pope Francis said in his encyclical that the use of “highly polluting fossil fuels needs to be progressively replaced without delay.”

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It’s time the Government saw the writing on the wall for coal

Press Release 

Coal Action Network Aotearoa today called for the Government to “get real” about the future of coal.

Former Solid Energy CEO Don Elder and Finance Minister Bill English turn the sod for Solid's failed lignite briquetting plant in Southland.

Former Solid Energy CEO Don Elder and Finance Minister Bill English turn the sod for Solid’s failed lignite briquetting plant in Southland.

Solid Energy going into administration is good for the workers currently employed by Solid Energy in the short term, but the future of coal is looking bleak.

“It’s good that no workers will lose their jobs today,” said CANA’s Cindy Baxter. “But, our “Jobs After Coal” report shows coal mining in New Zealand doesn’t have a history of helping the communities it serves – in most areas where coal is mined, the median income of those communities is lower than the regional average.”

The Government has continually failed to face the reasons for Solid Energy’s freefall in recent years.  It pushed the company into an untenable position by changing policies such as the mandatory biofuels regulation, and backed the its failed and highly irresponsible plans to mine billions of tones of Southland lignite. What’s more, the Government continued to insist that Solid went into more debt, all the time ignoring the plummeting coal prices.   Continue reading

NZ nears the end of coal-fired power: all eyes on Fonterra

Press Release 

Coal Action Network Aotearoa today welcomed Genesis Energy’s announcement that it will close its Huntly coal-fired power station – but noted that this would now bring close scrutiny onto the next biggest coal user: Fonterra.

No more coal for Huntly

No more coal for Huntly

“The Genesis announcement will give the owners of the consented wind and geothermal projects the certainty to go ahead and build, creating jobs in a clean energy future,” said Jeanette Fitzsimons of CANA.

“We have more than enough renewable projects in the pipeline to replace Huntly coal and most of our gas-fired power stations,” she said.

“The question is how will Fonterra explain to its customers that it will now be going head-to-head with industrial steelmaking to be New Zealand biggest cause of coal-fired climate disruption.”

Fonterra is New Zealand’s third largest coal user. Its coal use has grown by 38 precent since 2008 and more growth is planned as it ignores the options of more sustainable waste wood-fired boilers in favour of coal for its milk drying processes.

Solid Energy a stranded asset

Press release

Solid Energy is a stranded asset and the sooner the Government and the Labour Party realise this, the faster New Zealand can start seriously discussing a “Just Transition” away from fossil fuels, Coal Action Network Aotearoa said today.

#HeadsinSandNZ participants provide the colour on a wet Wellington day. Thanks Ashlee Gross/Harvey Molloy

“Several commentators in New Zealand are today saying that coal has a future, but the world is thinking otherwise, as can be evidenced from President Obama’s Clean Power Plant announcement today,” said Cindy Baxter, of the CANA organising group.

“Solid Energy’s Chairperson resigned in April because her view that the company was not viable conflicted with Bill English.   She was right. We need to face up to this fact, not continue to promote coal use around the country,” said Baxter.

Consider these factors:

  • Today, shares of the world’s largest coal company, Peabody Energy, plunged again to just over USD$1 and the company is struggling, with others like Arch Coal on the edge of bankruptcy
  • In Germany, a brand new coal fired power plant could be bought last week for just one Euro. In Queensland last week, a coal mine sold for $1.

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Who’s the real threat to security: Govt climate policy – or four climbers?

PRESS RELEASE

Coal Action Network Aotearoa today congratulated the Greenpeace climbers on the roof of Parliament drawing attention to the lack of Government action on climate change.

GPACTION“Who is the bigger threat to security here:  John Key’s apparent intention of letting global temperatures rise by 4degC by taking virtually no action  – or four peaceful activists and a few solar panels on a roof?” asked Jeanette Fitzsimons of CANA.

The Greenpeace action comes on the back of a Dutch Court yesterday ordering its Government to increase its 2020 emissions reduction target of 17% to at least 25%.  New Zealand’s target is 5 percent.

“The Dutch Government’s 2020 target was already better than New Zealand’s – yet the court ordered it to increase that target in order to ‘protect its citizens’.  The world is moving to tackle climate change, yet New Zealand seems intent on doing as little as possible,” said Cindy Baxter of CANA.