Category Archives: economics

Is Fonterra Seeing the Light?

by Jeanette Fitzsimons

Several new Fonterra plants have been officially opened in the last week or two, though they have all been running for a few months. Together they suggest the company may finally be giving some weight to the “value” component of its mantra, “Volume, Value, Velocity”.

Screen Shot 2016-02-29 at 11.09.03 amWe have criticised Fonterra in the past for its push for more, more and more milk, leading to farm intensification, more water pollution and more greenhouse gases. So it’s only fair we issue a cautious bouquet when they balance that with added value.

Bill English has just opened the new Reverse Osmosis plant at Edendale, the largest dairy factory in the southern hemisphere. Reverse osmosis is a widely used technology which purifies water or concentrates liquids by passing them through a membrane under pressure. Continue reading

Advertisements

The Privatisation of Solid Energy

by Jeanette Fitzsimons

When Solid Energy went belly up with huge debts and failed businesses like its briquetting plant in Southland, the Government was forced to drop it off the list for privatisation because it was no longer fit for sale. Right?

Wrong. Solid Energy has been 46% privatised under our noses without most people realising what was going on.

There was considerable public anger that taxpayers’ money was used to bail out the failed company so it could try to trade its way out of its difficulties. However, part of that deal was persuading the banks who owned much of its debt to write off $75m of that debt in exchange for equity – shares in Solid.

Coal Action Network activist at the now mothballed Mataura briquetting plant - supposed to provide local jobs, but didn't.

Coal Action Network activist at the now mothballed Mataura briquetting plant – supposed to provide local jobs, but didn’t.

The banks were very reluctant. It wasn’t their idea of a good investment. There is no sign they had any moral qualms about fossil fuels and the future of the planet, nor that they were concerned about the carbon bubble making coal a risky investment. But they should have been.

Both of these factors have caused investment funds overseas, including churches and university pension funds, to divest. Rather, the banks were concerned that the company was a basket case and converting their loans into shares meant they might never see any of it again. They may well be proved right.

Tokyo Bank challenged the debt restructure in the High Court, backed by the other banks, and lost: http://www.interest.co.nz/bonds/68407/bank-tokyo-mitsubishi-take-unsuccessful-solid-energy-debt-restructure-challenge-chin-won

TSB subsequently wrote off the value of its new shareholding, $13.8m, reducing its profit this year by 5.9%: http://www.nbr.co.nz/article/tsb-bank-profit-slips-59-solid-energy-writedown-bd-156961

This much has been reported. However, the net effect on Solid’s ownership is less well known. The effect was to reduce the Crown’s ownership of this former SOE from 100% to 53% – almost exactly what was intended in the initial privatisation plans. The rest, 46%, is owned by the banks, all of them apart from TSB overseas owned. The current shareholding is:

NZ Govt/taxpayer 53.38%
BNZ 10.13%
The Bank of Tokyo – Mitsubishi UFJ Ltd 10.13%
TSB Bank Limited 8.55%
Westpac New Zealand Limited 7.03%
Commonwealth Bank of Australia 5.70%
ANZ Bank New Zealand Limited 5.07%

Why would this matter? Aren’t we better off without a poorly performing coal company that pays no dividends and will eventually have stranded assets? Well, maybe it’s not that simple.

We are in a transition, whether Solid and the Government recognise it or not, from fossil fuels to renewable energy. That transition could be smoother or more bumpy, depending on how Solid Energy is managed.

As long as ministers have the power, as they do for an SOE, to give directions to the board, they can influence that transition in the public interest. (The fact that no government has so far showed any interest in doing so doesn’t take away from the hope that one day they might actually recognise climate change as a problem that requires serious action).

For example, Solid could have been instructed to open no further mines, to manage its existing mines well and pay down its debt, and to put its considerable inventiveness into developing transport fuels based on waste wood rather than lignite – possibly in partnership with Crown-owned Scion. That opportunity has now gone – a 53% majority could not impose that on the rest of the shareholders.

As it happened Solid Energy’s small ventures that would have been in the public interest had they been well managed, and would have helped smooth the transition to a low carbon future – Biodiesel NZ (biogold biodiesel) and Nature’s Flame (wood pellets) – were often conveniently blamed for the SOE’s demise. Two former SE managers now own Biodiesel NZ and are confident of making a profit.

“We are very confident that Green Fuels can provide very competitive pricing in comparison to mineral diesel. Using Biogold™ enables companies and organisations to do the right thing for our environment. A responsible attitude towards sustainability is becoming an increasingly hot topic especially in the current conversations around building a ‘new’ Christchurch and maintaining a ‘pure’ New Zealand.” (http://dieseltalk.co.nz/news/green-fuels-nz-purchases-biodiesel-facilities)

If Solid succeeds in pulling itself out of its hole, a hole that appears to be getting deeper in the face of continued low coal prices that show no sign of rallying, the banks are likely to sell their holdings as soon as they can. This will not be to NZ Mums and Dads, but more likely to overseas investors.

As we’ve pointed out on this blog before, the Indian steel industry has shown considerable interest in our coal assets:

https://coalactionnetworkaotearoa.wordpress.com/2014/03/06/bridges-india-coal/

Handing over a large chunk of these coal assets would create a further vested interest to join other big industries pushing against New Zealand achieving a decent climate policy.

Under modern free trade agreements, and especially under the TPPA if it is signed, foreign investors will have the right to sue our government for any change in policy that impacts on their profits. Goodbye carbon tax, or even a renewed ETS. The TPPA is itself a powerful reason to resist privatisation.

“Privatisation by stealth” is the hackneyed term that comes to mind, but the point here is that we were never told this was the effect of the bailout, but were left to figure it out. More contempt for democracy.

It is hard to see any sensible way forward from here. Coal is a sunset industry and the necessary transition seems likely to be a very bumpy one.

Selling Future By Buying Debt

This article by Rosemary Penwarden first appeared in the Wanganui Chronicle:

http://www.nzherald.co.nz/wanganui-chronicle/opinion/news/article.cfm?c_id=1503423&objectid=11180816

My mum is 89 and needs 24-hour care. Despite multiple strokes, she can still smile and, when the clouds in her head part, the old sense of fun is not faraway. She holds a blue stone day and night.

My Christmas was spent feeding mum, helping her stand so she felt safe to take those few excruciating steps to the bed, the wheelchair, the commode. I changed her, washed her and read to her. I held her hand when she was upset in the night.

Except for a few phone calls and visits from family, that was our Christmas.

I turned off the radio and the TV. We didn’t have to participate in the nation’s most obscene display of conspicuous consumption ever recorded – a record-breaking 148 electronic transactions per second at 12:24pm on Christmas Eve.

Nor did we join the Boxing Day scramble when sales rocketed 12 per cent past last year’s record.

And when more than 20,000 new items got listed on Trade Me.

Mum’s carers came as usual to shower her at Christmas. They used their own cars, paying the first 10 kilometres themselves and then earning 30 cents per kilometre on top of a minimum hourly rate of $13.75.

Along with their 40,000 care worker colleagues, they sit at the bottom of the Kiwi income ladder, where half of New Zealanders earn less than $24,000 per year. At the top, a chief executive’s average salary is $1.5 million.

So who was ringing up $235 million through the nation’s tills on Christmas Eve while mum’s carers worked and we sat home? Who owns what in Godzone?

New Zealand’s 2.9 million adults own almost $470 billion in cash and assets, but it’s not shared evenly. In fact, the wealthiest 1 per cent own three times as much as the poorest 50 per cent combined. Around 1.45 million of us own just 5 per cent of the nation’s wealth.

At the bottom end of the asset ladder, it’s not wealth but debt, debt, debt. Hence, for many, Christmas becomes the most stressful time of year. On go the carols, up goes the tinsel and out comes the hard sell. Off we trot, clocking up debt that half of us can’t afford to repay.

My friend, physics professor Bob Lloyd from the University of Otago, talks about another, bigger kind of debt – and not just at Christmas. He talks of energy inputs and outputs.

One output is atmospheric carbon dioxide (CO2). Since the discovery of coal, cheap oil and gas, we’ve been on an energy spending spree like there’s no tomorrow. The burning of these fuels has dumped massive amounts of CO2 and other greenhouse gases into the atmosphere, warming the planet.

This is a proven fact, but vested interests – mostly with connections to the fossil fuel industry – try to confuse us. You can see why – they have a lot to lose. Eighty per cent of their already discovered coal, oil and gas will soon be worthless because they will have to remain unburned for the planet’s atmosphere to keep to two degrees of global warming.

Go above two degrees, the world’s governments have agreed, and we are on a trajectory toward mass extinction within a few short generations.

It may already be too late. Weather patterns are changing faster than predicted, ice is melting and excess dissolved CO2 is acidifying the oceans.

Carbon dioxide stays in the atmosphere for many hundreds of years, so even if we stopped burning fossil fuels today, multiple changes are already in the pipeline. Put bluntly, the world’s output of CO2 has become the main limiting factor to future human existence. We’re in debt, big time.

But Bob sees global warming as a symptom rather than a cause. Our CO2 debt, like our household debt, is a symptom of the same addiction. The cause, up in lights this Christmas, is conspicuous consumption, rampant consumerism, the myth that we can keep on growing in a finite world already choked to the brim.

Bob’s cure is a strict treatment regime with three main remedies.

One: We need to reduce inequality. Why do we allow a chief executive to earn more than 62 times what we’re prepared to pay someone to toilet him when he’s old?

Two: We need to change the economic system to reverse the emphasis on conspicuous consumption.

Three: We must halt the vested interests that, until now, have kept the “business as usual” machine ticking along – vested interests like those described by English journalist George Monbiot in a February 2013 Guardian article about two secretive organisations working for US billionaires that have spent $118 million to ensure that no action is taken to prevent man-made climate change.

Who doesn’t want the best for their kids? Our Christmas gifts to them include an atmosphere choked with CO2, slowly dying oceans, record storms and droughts far into the future. Right now we are stealing from their future to give them something they may just put on Trade Me the next day.

It’s not going to be easy. We need to get honest and stop pretending there’s no tomorrow. Tomorrow belongs to our kids.

And here’s a gift for next year. Find an old person, turn off the TV and radio, and be with them for Christmas.

Rosemary Penwarden is a Wanganui grandmother, freelance writer and member of Coal Action Network Aotearoa, a group that wants to see the sensible phasing out of coal mining.

Auckland Diocese of Anglican Church Becomes First New Zealand Institution To Divest From Fossil Fuels

UPDATE: Following decisions to divest from fossil fuels by the Auckland and Waiapu Dioceses, the following dioceses have  divestment motions coming up for consideration:

  • Wellington (21-22 Sept) – STOP PRESS: Wellington has also voted to divest
  • Dunedin (27 Sept)
  • Waikato and Taranaki (28-29 Sept)

Main Story

In a major boost for the growing fossil fuels divestment campaign, the Auckland Diocese of the Anglican Church has become the first New Zealand institution to decide to divest from fossil fuels.

As reported by the Anglican Communion News Service: http://www.anglicannews.org/news/2013/09/auckland-diocese-to-divest-from-fossil-fuels.aspx:

the Diocesan Synod voted overwhelmingly to support a motion calling on the diocese to withdraw its investments from companies whose main business is the extraction and/or production of fossil fuels.


The divestment motion was co-sponsored by Revd Mathew Newton of St Paul Symond’s Street and the Diocesan Climate Change Action Group. It asks the diocese to sell off any remaining fossil fuel holdings within 2 years.

Similar motions calling for fossil fuel divestment are being put to other Anglican dioceses during the next few weeks, and the Waiapu Diocese has subsequently passed a divestment motion. Matheson Russell, who initiated this process within the Church, has written about it for the Anglican Church publication Taongahttp://www.anglicantaonga.org.nz/News/Common-Life/Auckland-challenged-on-fossil-fuels

Here are three excellent videos on the issues to watch and share:

CANA welcomes this important first step in getting New Zealand institutions to divestfrom fossil fuels. We hope that other Anglican dioceses, other churches and faith groups, and other New Zealand institutions make the same decision. Work is already going on both in front of and behind the scenes to put pressure on other institutions todivest, and we expect this announcement to be the first of many.

To get involved in other fossil fuel divestment campaigns in Aotearoa/NZ, check out 350.0rg.nz’s Go Fossil Free page: http://gofossilfree.org/nz/

Can We Make Steel Without Coal?

In this article, Jeanette Fitzsimons considers an issue with very important implications for both the coal industry and the prospects of making major greenhouse gas emissions reductions: whether, and to what extent, we can make steel without using coal. We welcome your comments and feedback – please send your responses to coalactionnetwork@gmail.com.

Can we make steel without coal?

Coal is the most concentrated source of carbon dioxide and the biggest threat to the climate through accelerated global warming. Leading climate scientist James Hansen of NASA and Columbia University says that if we are to stabilise climate at a safe level the world needs to phase out coal burning to zero by 2030.

This is supported by analysis by Carbontracker and others that 80% of the known reserves of coal must be left in the ground forever if we are to limit warming to two degrees.

Coal Action Network Aotearoa (CANA) is committed to opposing all new coal mines in order to meet that target. However, 60% of Solid Energy’s coal production in NZ is for steel making, mainly for export, and the company says that “there is no way of making new steel without coal”.

If this is true, principled climate campaigners must either stop opposing new coking coal mines on climate change grounds, (Happy Valley, Denniston Escarpment, Mt William, Pike River) or propose a world with no new steel. (There are of course strong biodiversity reasons for opposing some of these mines but it is a different argument.)

Fortunately Solid Energy’s claim is not true.

Why is coal used to make iron and steel?

Firstly coal is converted to lump coke in a coking oven. A particular rank of coal, known as “coking coal”, is required to make the preferred quality of coke.

Then raw iron is made by reducing (removing the oxygen from) iron ore (iron oxide) by reacting it at high temperature with coke in a blast furnace. About half of the carbon in the coke combines with the oxygen from the iron ore to make CO2. The rest of the coke is burned in a blast of air in the blast furnace to provide the required high temperature; making more CO2. The resulting pig iron typically contains 2.5-4.5% carbon, making it relatively brittle and unsuitable for most uses.

Steel is made in a subsequent process as an alloy of iron and carbon (along with some other elements). Around 1% of the carbon from the coke remains in the raw iron to provide the source of that carbon. So coal (as coke) is a reducing agent, a source of energy to drive the process and a source of carbon to incorporate in the steel. Alternative processes need to meet all three functions. This is why you have to do more than just substitute a different energy source.

In New Zealand, the coking coal occurs on the west coast of the south island. The bitumen in the coal binds it into lumps in a coke oven. Coking coal is higher in carbon content than cheaper coals and lignite which are used in power stations and industrial boilers.

New Zealand’s Glenbrook Steel plant uses a different process. It is a unique design, developed to use NZ iron sands and sub-bituminous coal from Huntly.

What quantities are we talking about, globally and in NZ?

World steel production in 2011 was 1518 Mt and used 761 Mt of coal – 12% of all hard coal mined.

The Glenbrook plant (now owned by Bluescope) makes 600-650,000 tpy steel and uses 750,000 tpy Huntly coal plus 1,000 GWh electricity and some Natural Gas, supplying 90% of NZ’s needs. It also recycles steel.

Can we make steel with less coal?

For a start, we could recycle much more than we do.

Steel can theoretically be recycled indefinitely, with the remelting and alloying process ensuring its quality. That requires energy, but much less than to make new steel, and it needs no new source of carbon so is generally produced in electric arc furnaces. The current global rate of steel recycling is 30%, helping keep carbon emissions from pushing ever higher. Obviously there are limits to what can be collected for reuse but it should be possible to raise it to 80%, and would be if there was a sufficient price on carbon. Failure to price environmental damage leads to massive waste because collecting material for reuse is “just not worth it”.

The Direct Reduced Iron (DRI) process makes raw iron with inputs only of electricity and natural gas. India produces some 68MT/y by this method. If the electricity is renewable and the gas used is biogas from waste, this approach could be made sustainable. However DRI is often alloyed with scrap steel in the steel making step, so to add DRI to recycled steel complicates lifecycle analysis.

There are various processes that reduce the coal needed for a tonne of steel. The University of NSW has developed a polymer injection technology where some of the carbon and energy come from used car tyres, with 1 million car tyres substituting for 15,000 tonnes of coal. (1) This is useful while there are large quantities of used car tyres but is not a long term solution. Alternatively, the Hisarna process uses coal directly rather than making coke, reducing coal input by around 20%. (1)

The steel industry worldwide is putting serious effort into finding ways of reducing carbon emissions from steel making – within the current economic framework. But we are looking for something that could replace coal altogether.

Is it technically possibly to make steel without coal?

The obvious answer is that it must be, as early iron and steel production used wood-derived charcoal instead of coal-derived. However the scale of today’s industry is vastly bigger than two hundred years ago.

Electrolysis has been shown to be capable of coal-free steel production but the technology is said to require another 20 years of development before full commercialisation. (1) However, this is roughly the time it will take under Hansen’s scenario to phase out coal directly, making it a possible option for the future.

Charcoal made from wood or other biomass can provide the reducing function, a source of energy and the minor carbon component in steel; with further heat obtained from electricity or natural gas (or biogas). However, even the small quantities of iron and steel made a couple of centuries ago, along with the heavy demands of ship building, had a serious impact on Europe’s forests. The scale of steel demand is now many times greater, so the real question is about scale and sustainability. Climate change cannot be considered in isolation from land use, food production, and forestry policy.

Is there enough wood or other biomass, and where would it come from?

Wood could be grown in plantations for use in the steel industry, just as it is now grown for timber. But land is a limited resource and is also needed for food and buildings and for the protection of wild nature and other species. There have been various attempts to calculate how much land you would have to devote permanently to rotational wood harvest for each tonne of steel to be made annually. The estimates vary between two and seven hectares per annual tonne, depending on species, climate, soil and process efficiency. Clearly the world is not going to devote 2-7 billion hectares (13%-50% of the global land area) – or even a small fraction of that – to steel making, and nor should it.

However, all existing forestry operations have residues of woody material of low commercial value. As well as prunings and thinnings, harvesting residues like branches, bark and damaged logs average at least half the tree. Woody waste from crops – such as coconut shells and husks, corn stover, grain stalks – can be added to this.

Figures from the Food and Agriculture Organization of the UN (2) estimate annual waste from commonly cultivated crops is in the region 25-176 exajoules (Ej – 1018 joules). Parikka (3) estimates annual waste biomass from all sources is around 64 Ej and compares this with total global energy use from all sources for all purposes of 440 Ej. For comparison, global coal use for steel making is around 22 Ej. (5)

Carbonscape, a NZ firm which has developed new very efficient technologies using microwaves to process wood waste into charcoal, calculate that with their process it would take 1.6BT biomass globally to replace all the coal currently used in iron and steel making. That is around 3% of the 50 B tpy of world annual biomass productivity. Carbonscape is not yet in commercial production but has produced test batches of charcoal to secure an order for 9,000 tonnes from NZ Steel.

While these numbers are far from precise they do indicate that far more waste biomass than needed is available. Of course, not all waste can be easily recovered; some of it will be too far from steel mills to justify the transport energy and cost; some of it already has alternative uses; and the green leaf and twig waste (a small proportion of the forestry total and probably more of the crop waste total) should remain on site to return nutrients to the soil.

However, the most important question is whether the forestry and other biomass operations on which steel making might piggy-back, should all continue.

Are the forestry operations that produce the residues themselves sustainable?

Brazil produces some 23-36 million m3 of biological charcoal each year to make iron and steel. Some of it is from planted woodlots on a 7 year rotation but most is from old growth forests. There is a major international campaign to stop this logging of old growth forests to supply the steel industry.

Much logging in tropical countries is actually illegal as well as unsustainable and the world’s old forests are diminishing fast, along with the wildlife and indigenous communities they sustain. We cannot both campaign against cutting forests unsustainably, and rely on residues from this practice to fuel our steel mills.

If a plantation forest is managed well, using its residues for energy and carbon is a big environmental plus. But how is the steel maker (supposing they even care) to tell the difference between charcoal from sustainably managed forests, and that from illegal and unsustainable cuts? It seems impossible.

Yet there is already a world wide system in place to do just that for timber, paper and packaging.

The Forest Stewardship Council (FSC) certification system operates in 80 countries and five continents. It certifies that a product comes from a forest that is legally harvested and well managed with regard to environmental protection, wildlife conservation, and safe and fair working conditions. It also outlaws genetically engineered trees, citing risks of increased flammability, invasiveness and contamination of native forests with engineered traits.

Forests may be planted or well managed natural forests where high wildlife densities and populations of animals like great apes and tigers, are retained.

Globally 165 million ha of forest are certified, and this number is growing fast. The system includes chain of custody certificates in 105 countries so a product can be tracked through the value chain. NZ has 1.4 million ha under certification. Currently the system is not applied to residues but there is no reason why it should not be and there is some reference in the literature to extending it to residues for biofuels.

A similar area of forest is certified under the parallel certification system, PEFC. The two systems are gradually converging.

Is the wood residue in the right place?

Handling, drying and transport are major costs to recovering wood residues for use. However, if it is planned right the forestry industry already has much of the equipment needed on the site, and removing waste can be a bonus for an industry which otherwise has to work around it or burn it.

There are many different logging practices, some of which make it much easier to recover the residues. Practices such as taking the whole logs to a skid site, cutting and stacking at the time of logging, and the use of mobile chippers can reduce costs. Carbonscape says their micro-wave charcoal technology lends itself to small scale units for decentralised processing in the forest. A NZ wood fuel supplier says the energy required to haul a truckload of dry chip regionally is equal to only about 4% of the payload.

Some residues will of course be on steep inaccessible slopes, in areas too remote from steel mills. It is beyond the scope of this paper to estimate how much of the globally available wood residue might be harvested for making charcoal.

Other advantages of wood over coal

A wood-based process is much cleaner, with no sulphur or mercury emissions, low oxides of nitrogen, no toxic coal mine tailings, less ash which is not a toxic waste, less slag to dispose of, and less lime needed because charcoal is basic rather than acidic. It is claimed there are fewer industrial accidents than with underground coal mining.

Because of these side benefits, the Norwegian ferro-silicon industry is willing to pay twice as much for wood charcoal as for coal (per unit fixed carbon) for smelting.

What are the big obstacles?

Leaving aside the biggest issue, which is total lack of political will or interest in climate change as a problem, there are two issues which need to be addressed.

The first is scale, as it is for all sustainability questions. The capacity of the atmosphere to absorb carbon is not the only limited resource. Constantly growing steel production within an infinitely expanding economy will very soon run up against limits of land and water to produce biomass. These limits are not an argument to continue using coal – itself a limited resource – as to do so will change the climate and destroy many other resources. Steel making can continue in a sustainable society without coal, but on a limited scale.

The second is price. As long as coal pays nothing for its contribution to climate change, sustainable alternatives will be more expensive. (Under NZ’s ETS, coal mining for export pays nothing for its carbon emissions, either here or in China, India, or Japan, our main markets.)

A serious price on carbon without loopholes, preferably internationally co-ordinated, is necessary and urgent if steel making is to move away from coal. Necessary – but not sufficient. If a price on carbon is all that occurs the world’s forests will be raped to supply the steel industry. So controls on forestry are needed too. A requirement that all steel fuel come from FSC certified forests or sustainable agriculture would do it.

How much steel do we really need?

In a sustainable society steel use, like everything else, will be moderated. The first and easiest step is to cut out waste. When the rate of building new infrastructure stabilises and we are not constantly building more bridges and high rise short-lived buildings, demand for steel will drop. Design for durability and repair will play a part. There are also materials that can substitute.

Steel framework in up to 6 storied buildings can be replaced with pre-stressed laminated timber, a process developed at Canterbury University. They then become a store of carbon rather than a source of emissions. (However, a small amount of steel is used in a strengthening rod and end caps).

What do we need, to create a sustainable steel future?

First, a substantial price on carbon. That will help drive the wood based technologies and recycling. A recent Otago University thesis estimates that even $50/tonne would be enough to drive all technically feasible boiler fuel substitutions of wood for coal. (4)

Second, we need good resource studies and mapping of the wood residue resource, along with improved harvesting techniques and equipment. Scion is doing some of the former.

Third, we need to expand the FSC and make certified residues mandatory in this country. There are moves towards that overseas.

Once these are done we need a national strategy on the priority use of wood residues. Transport fuels, boiler fuel and smelting fuel are all likely to compete for the available wood and allowing the market to sort out what we use here and for what, and what we export, risks very perverse outcomes. (For example exporting charcoal might be more profitable but if it leaves us without transport fuel at home could cripple our economy.) It is inexcusable that no government has embarked on this work, or even plans to.

Most of all though, we need a change of mindset, where climate change is recognised as serious enough to change our way of doing things, and to learn to prosper within the limits of the biosphere.

Conclusion

This brief survey has not attempted to quantify the amount of steel needed to run a stable society, nor the quantity that could be made sustainably without coal, nor the quantity of wood residues that are available, easily harvestable and close enough to steel production sites, though some ballpark indications have been given. Work on refining this is urgent.

However we can conclude that it is quite feasible to make steel without coal and in some places it is already being done.

If wood or other biomass residues are used instead of coal, the main limiting factor is the quantity of residue from sustainably managed forests or cropping. Ultimately the limiting factor is land and land use competition. The FSC certification process could be used to ensure that wood residues are sustainable. Although the quantity is limited, it is large.

The current world production of steel, let alone its constant expansion, is not sustainable, but in a stable state economy a mix of substitution, much greater recycling and the use of biomass residues instead of coal can enable steel production to continue.

A sufficient price on carbon is essential, along with further quantification of the availability of wood residues and the development of more efficient technologies to enable this.

Most of all we need a change of political will to prioritise action on climate change and end the mad rush for growth at all costs so that these options are pursued.

What is clear however, is that there is no case for soft-pedalling our demand that no new coal mines be opened.

References

1. Croezen, H and Korteland, M, A long term view of CO2 efficient manufacturing in the European region CE Delft 2010

2. http://news.mongabay.com/bioenergy/2006/07/crop-residues-how-much-biomass-energy.html

3. http://www.joensuu.fi/metsatdk/viefor/data/material/071129113157Global_biomass_fuel_resources.pdf

4. Deller, Nic, Replacing NZ’s Coal Consumption with Energy from Wood Residues: a feasibility study B App Sci dissertation, EMAN 490 Otago University 2012

5. World Coal Association Coal and Steel Statistics 2012

Coal Action Network Aotearoa Newsletter October 2012

Follow us on Twitter  
and on Facebook 

If the New Zealand cricket team needs a new spinner to replace Daniel Vettori, they need look no further than mining industry lobby group Straterra. Perhaps because Solid Energy is in a tailspin and the mining industry has been coming under challenge all around the country in recent months, they have chosen to highlight a survey carried out, in somewhat mysterious circumstances, by Pauline Colmar, formerly of survey firm Colmar Brunton, which purports to show strong public support for mining.

However, on closer inspection, the survey was worded along these lines:

Survey company: Would you swim with sharks – if sharks didn’t bite?
Lots of respondents: Yes
Survey customer press release: “Majority of New Zealanders say they love swimming with sharks”
(notice the lack of options here for a respondent to say “hang on, but sharks DO bite”).

There’s more on that survey below. We have also more on Solid Energy’s troubles and their future plans; more on the forthcoming Powershift conference in December and 2013 Summer Festival in January; and the latest news on Denniston legal action.

Check out our international section that discusses the links between climate change and the horrific “Superstorm Sandy” in the US this week. Our thoughts are with the families of the people who died,  from the Caribbean to the US and Canada, and with those suffering in the devastation Sandy left in its wake. Continue reading

Mining plan ‘pure lunacy’, lobby group says

Coal Action Network Spokesperson Kristin Gillies on TVNZ’s Breakfast explaining why we think opening another coal mine is not the answer to the West Coast’s economic crisis. view here…….

All Solid Energy staff should be back at work tomorrow, and then lets begin a conversation about how we are going to provide long-term sustainable livelihoods for those communities.