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Lignite and the Climate
By Cath Wallace
In November 2010, the Parliamentary Commissioner for the Environment (PCE) issued a report: Lignite and Climate Change: The high cost of low grade coal (www.pce.parliament.nz).
The PCE points out that there are four proposals for developing the big lignite deposits in Otago and Southland, primarily by Solid Energy, a government owned company (though the government has signalled it wants to sell part of it).
The proposals noted by the PCE ( 2010, p14) include a plant producing about 2 billion litres of diesel per year, using at least 12 million tonnes of lignite per year and another producing 3 billion litres using 12-17 million tonnes of lignite annually. A further project would produce by 2016 1.2 million tonnes of the nitrogenous fertiliser, urea, using 2 million tonnes of lignite annually.
Solid Energy also aspires to produce 1 million tonnes of lignite briquettes for export by 2014. The briquetting process would squeeze out most of the moisture otherwise in lignite, generating emissions of 1.75 million tonnes CO2 equivalent (C02e). By comparison, using wood pellets instead for electricity generation would emit only 0.2 million tonnes C02e.
Finally it has been proposed that lignite could be used to fire the thermal power station at Tiwai Point aluminium smelter.
The production of urea would be a double whammy against the climate since the use of nitrogenous fertiliser would further affect the climate with the release of nitrogen dioxide once applied, and this is much more potent per tonne than CO2. Water quality is also damaged by nitrogenous fertilisers.
NZ’s Greenhouse Emissions and the costs of lignite.
The PCE noted the huge gap of 24-30 mil tonnes between NZ’s obligations to reduce our greenhouse gas emissions and the actual trajectory of increase of emissions that we are on. The lignite projects would horrendously increase our emissions – and that in turn will cost New Zealand money we could use for many other purposes, as well as costing dearly against New Zealand’s reputation around the world.
The PCE notes that even without the lignite projects, and with efforts to reduce emissions with the (feeble) Emissions Trading Scheme price on emissions from farming, and by accounting for forests that do sequester carbon, “New Zealand emissions will continue to rise, at least until 2019. Net emissions are projected to grow 40% between 2010 and 2020, taking New Zealand’s annual emissions rate to 30% above the 1990 level” (p 18).
This would leave a 24-30 million tonnes of CO2e gap between our commitments and our performance, and incur a cost we would have to meet. It would cost New Zealand $1.2-6.0 billion just in 2020, depending on whether the price of carbon is $50 or up to $200 per tonne (PCE, 2010; 18).
Steve Goldthorpe, energy analyst, posted this useful explanation to the Coal Action Network about the emissions from lignite:
“Only about half of a typical tonne of South Island lignite is combustible fuel, which might burn to give 1.2 tonnes of CO2. The rest is water and dirt. Some South Island lignite is so wet and dirty that it would yield less than one tonne of CO2 per tonne of material dug up and burned.
In contrast, the high value export quality black coal mined on the West coast might yield 2.8 tonnes of CO2 per tonne if burned and it could have up to three times the energy content per tonne compared with the poorest quality lignite.”
Goldthorpe notes that Don Elder of Solid Energy refers to lignite as “coal”, which it is not. Genuine coals and lignite quality varies hugely. He suggests that the real factor is in the realm of one to three.
“If the low quality minerals called South Island lignite are left in the ground for a few hundred million years, they might turn into high quality coal that is then worth digging up to use sparingly as a source of valuable materials. That would be a better use of the resource.”
(Reproduced with permission of Steve Goldthorpe Energy Analyst Ltd, Steve.Goldthorpe@xtra.co.nz.)
So what are the alternatives to using lignite? The first and most obvious is to not let the Tiwai Point smelter continue to drain NZ’s energy resources, but of course there would be a cost of lost jobs, but few uses of the energy would produce so few jobs per $m invested as does the highly capital and energy intensive Tiwai Point Smelter, so after the immediate disinvestment and the reallocation of the hydro power, there would be more jobs, not fewer.
Second, for most of the applications of lignite, including the thermal power station, wood could be used instead. Since growing trees absorb carbon, this would not add to the GHG emissions in the way that using a fossil fuel like lignite would, but the PCE concludes that insufficient wood can be found where the lignite is – but of course if diesel is to be made, it need not be where the lignite is.
The point though is that the more we go down the fossil fuels path, the more we displace other renewable technologies.
Urea use itself is also highly damaging both to water quality and the climate. Burning lignite for power is likely to have big impacts on air quality, with attendant respiratory disease. Diesel made from lignite using the Fischer-Tropsch process would produce about 5.8kg of CO2e per litre, compared with 3.1kg/litre from conventional diesel, or 0.3kg /litre from diesel manufactured from wood. The PCE calculates that a single lignite-diesel Fischer-Tropsch plant
producing 35,000 barrels of diesel/day would
generate 5.5m/tonnes CO2e per year, and that at the lower assumed price of carbon of $50/tonnes, this would cost New Zealand $300m more than conventional diesel (PCE, 2010; 28-29). Compared to say, bio-diesel, the lignite-derived diesel would be hugely more expensive still.
Solid Energy is trialling forestry wood production both for fuel pellets for which there is already an established market, and for carbon sequestration to try to offset some of the emissions from the products it seeks to produce. The problem is that there is a limit to the amount of land that can be covered in forest, and
forests either may be harvested in which case much of the carbon is released again, or they become mature and cease to provide a net carbon sink.
Carbon capture and storage (CCS) has been promoted as a solution by Solid Energy, but the PCE concludes that there is nowhere that could be proven both
feasible and reliable in the south, and that anyway, the technology remains speculative, uncertain, unreliable and highly risky. This is underscored by the discovery by farmers in one of the major CCS stores where the supposedly permanently stored CO2 is bubbling up in farmers’ paddocks like so much soda water.
The impact on NZ’s greenhouse gas emissions of
lignite mining and the manufacturing or export of diesel, urea or briquettes or thermal power production using lignite would be profound and expensive. The PCE shows that “a single lignite-diesel plant would increase NZ’s national greenhouse gas emissions bill by 20%” (p39).
The PCE’s report provides far more detail than can be provided here, but it is clear that there is a considerable risk to New Zealand and the climate from the lignite projects, and that the government will feel inclined to allow lignite-based activity to be subsidised by the allocation of free emissions units. The Commission recommends against such subsidised allowances of emissions credits: “it makes no sense that the ETS rules would lead to taxpayers subsidising, even at a modest level, new investment in outdated dirty technology” (p42). Thus she recommends to Parliament that only industries that reduce NZ’s net greenhouse gas emissions be given carbon credits, and that new industries based on large amounts of lignite should not be given free carbon credits. Criteria should be developed for the issue of free carbon credits.
Solid Energy is a state owned company so it is possible for the SOE minister to simply direct the company to desist from its plans to use lignite and to redirect its efforts to wood pellet production. This would be the equivalent of directors reorienting a private company. Ministers redirected Timberlands in 2002 away from logging native forests, to exotic forestry. The Key government could and should direct Solid Energy to leave the lignite in the ground. We and the climate would be far better off if it did.
(republished from the March 2011 issue of ECOlink)
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