Archive for the ‘Energy’ Category
Today Energy Minister Simon Bridges announced new hefty criminal offences for protesters targeting ships in the EEZ, including for entering a 500 m exclusion zone.
Photos: The Dominion Post Collection, Alexander Turnbull Library.
I see I am getting a bit of gyp from critics in the blogosphere whose latest fantasy is that I lack an environmental ethic.
Their mistake is they think that a healthy environment stands in opposition to a healthy economy.
I don’t rise to the bait too often, but on this occasion I will bite and lay out my record.
Some of these critics should do their homework.
I am 52 years of age. I tramp, ski, and swim in rivers and the sea. I have been fighting for environmental causes most of my life.
As a lawyer I fought for conservation orders that now protect many of the south island’s rivers including the Mataura, the Buller, the Ahuriri, the Greenstone, the Dart, the Lochy, the von, and the Kawarau.
I am still active in river protection. This year I am appearing pro-bono as an expert witness on energy policy in support of the Fish and Game application to protect the Nevis river from damming.
As Minister of Energy I halted the decline in renewable electricity as a % of total generation, set an objective of 90% renewables by 2025 and put in place a myriad of initiatives to achieve that end. That objective has survived the change to National, and good progress is being made towards it. Together with Jeanette Fitzsimons, I also promulgated the most ambitious energy efficiency and conservation strategy we had ever had, and played a strong hand in the design and funding of the insulation retrofit programme that National continued with.
As Minister of Energy I added substantially to the lands protected from mining by extending schedule 4 protection to all parts of national parks not then protected, including Kahurangi.
As Minister of Land Information I revamped tenure review, helped form a number of conservation parks, including the Otiake Park in the Hawkduns, stopped tenure review around lakes and rebalanced the relationship between the Crown and lessees. National has reversed some of those changes.
As Acting Minister for the Environment I unblocked the national policy statement on freshwater quality. Trevor Mallard continued this work culminating in the very good NPS proposed by Judge Shepherd et al, which was then neutered by National.
As Minister of Climate Change I successfully legislated to price greenhouse gases in all sectors of the economy covering the 6 main gases covered by the Kyoto protocol. New Zealand remains the only country in the world to have achieved that. I was named Environmentalist of the year in 2008 by the Listener for that and other initiatives.
Changes by National and a loss of momentum internationally collapsing the price of carbon have undermined it, but the architecture remains sound. It is Labour’s policy to bring agriculture in to the ETS.
While in government I read about set nets causing the deaths of Hector’s and Maui dolphins. After confirming with Chris Carter that this was intend a serious problem I approached Helen Clark who, with Jim Anderton’s help, vastly expanded the areas where set nets were banned.
I have had high profile run-ins with proponents of lignite developments, including Solid Energy’s Don Elder.
As Labour’s then spokesperson for conservation, I helped lead Labour’s successful campaign against National’s plans to allow mining in schedule 4 National parks, Coromandel, Great Barrier Island etc. For those with a sense of humour, my Christmas interchange with Gerry Brownlee on the issue, in which Gerry starred, remains the most watched clip from parliament. http://inthehouse.co.nz/node/912
I have spoken often on the need to better protect our albatross and petrels from being killed as by-catch. Similarly, I am a defender of lowland wetlands against reclamation, and against degradation caused by intensification of nearby land use.
I have been a defender of the RMA, while wanting to improve its reputation by addressing some of its arcane and hard to defend processes.
I am happy to stand on my record on environmental matters.
Which is why it annoyed me to be told I am out to lunch on mining issues.
Having a clean environment means making sure we use our natural resources responsibly. It doesn’t mean we stop using all of them.
That’s why, outside of schedule 4 areas, mining applications can and should be considered case by case.
As I said when interviewed, there is legitimate public concern about deep sea drilling arising from the Gulf of Mexico catastrophe and the limitations of New Zealand’s response to the Rena shipwreck. We must ensure that world’s best practice is followed and that the safety devices needed in the event of mishap are available and can be deployed. Even then, it may be that the deepest of wells are too risky and ought not to proceed.
In terms of lignite, I reiterated that Labour believes its use as an energy source using current technology is a dirty greenhouse gas intensive practice. We are also unconvinced it is economic, especially if environmental consequences are included, and have said government money should be spent on renewables instead.
Our position on developments in the EEZ is that RMA type principles should apply. We sit between the Greens (who would ban most development activities) and National, whose EEZ legislation, while initially supported by the Greens, is inadequate.
We can develop our resources responsibly and make responsible decisions for our future – and a sustainable economy requires it.
Last Saturday Labour Party members and friends gathered in Titirangi to talk about the environment and green technology. It was great that deputy leader and Labour’s environment spokesperson Grant Robertson was able to join us. (UPDATE, and Grant’s speech can be found here)
I gave a speech about the unbreakable nexus between economic development and environmental protection. It’s called The Dolphin and the Dole Queue and you can read it here or follow the discussion it’s generated at The Standard.
My speech contextualised clean-tech and renewable technologies and how these might meet some of the pressing environmental challenges. It did this by placing in context:
- The gathering storm clouds of major environmental trends, such as climate change, fossil fuel scarcity and population growth;
- Why a strategic shift to a green economy which incorporates clean-technology and renewable energy is required;
- A reality check on the remaining ‘gap’ – that fact that, even with prompt action, major risks and adjustments will still exist;
- Rules of thumb for navigating future choices – evidence and analysis, the precautionary principle, and resilience economics.
There is no longer a genuine debate about whether our climate is changing. Instead there is an overwhelming consensus of climate scientists versus the old vested interests of polluters and their curious allies on the conspiratorial fringe.
The truth is our planet is near – if not past – the point where our ever-increasing demands on resources will surpass the Earth’s ability to sustain our civilisation in its current form.
Too many politicians appear to have calculated that frightening people with the truth just makes things difficult for them. Maybe that was true. Perhaps it still is. But the time for short-term thinking must end because the facts are clear.
Do you want future generations to have much more difficult and conflict-riven lives than we do; is it acceptable to you that your descendents should look back at us and ask “How could you have known what you did and yet you did nothing?”
There is huge potential for New Zealand in clean-tech and renewable energy. We’ve already got Lanzatech capturing industrial waste exhaust and turning it into energy. We’ve got SolarCity installing solar panels on thousands of roofs in Christchurch. Living Earth is creating compost from waste which might have gone to landfill. New Zealanders are doing amazing things in the clean economy which matter, and which help us get a slice of the $6 trillion potential global market.
But a core part of my speech stressed that a more serious and sophisticated analysis of the potential and limits of clean-tech is required. Yes, we must ensure New Zealand isn’t left behind and that our country maximises both the ecological and economic value of our necessary transition to a clean economy. But we must also carefully guard against the risks of “green-wash” and being overly optimistic that a move to a low carbon future means business as usual. Because it doesn’t. It’s going to take cultural changes around consumption and stewardship of the things we own and the land we inhabit, and we’re going to have to meaningfully reach out to the developing world so that their rise doesn’t countermine our progress.
New Zealanders must work through the challenges now because the rest of the world is racing ahead of us. We need to deliver a broad public and political push for sustainable economic growth and enhanced environmental protections, and we need to start today because our “clean green brand” is already being questioned overseas.
This change is sharply at odds with National’s “milking and mining” plan of ever-increasing pollution and kicking business leaders who dare to speak out against their dead-end strategy. So progress is going to be a big challenge.
I concluded that, while the challenge is huge, community engagement and activism is necessary and change is possible.
What do Red Alert readers think? How can we get the most from clean-tech? Is enough being invested in its development? How are we going to change attitudes and work together so we can enjoy fulfilling lives today while still saving this planet for our grandkids?
Can the Government tell an asset from an elbow?
Had it thought through the fatal flaws in its partial privatization drive, or has it been taken by surprise? Hat tip to Clayton Cosgrove for bringing SOE sale issues to the fore. Here’s a potted summary of some emerging commercial and economic development implications:
- When the SOE’s are partially privatised they become companies with a partial public shareholding, regulated by commercial law and not the SOE Act. They are no longer SOEs. They no longer have the Crown’s good corporate citizen obigations. Elbow #1.
- That is why the s9 Treaty Clause debate is so fundamental. Iwi are 100% right to be outraged that the Crown’s obligations under the Treaty of Waitangi could be sold down the river (literally). If the Crown’s response is to indemnify the private investor and bear 100% of the ongoing Treaty obligation, then the taxpayer is effectively subsidising the private investor. Clayton nailed this last week. Elbow #2.
- Minority shareholders rights include the ability to invest in future profitable expansion plans. Dilemma for Crown: pony up its 51% of those future capital requirements or face equity dilution below 51% and loss of residual control. The Govt’s response has been to hedge how much it wil initially sell. Does 45% leave it enough of a buffer? For how long? How long is a piece of string? How does this affect its sale proceeds? In a rare moment of frankness Bill English fessed up that those proceeds are only a “guess”. You bet they are. Elbow #3.
- Magically the Government’s new-found forecasts of SOE dividend loss are not, apparenty. These were shamefully omitted from the Pre-Election Economic and Fiscal Update (PREFU) because they were apparently too hard to calculate. They have since been found in a bottom drawer and Lo! they show there will be precious few future divvies, so little loss. Ooops Why would a private investor buy them then? Elbow #4.
- Except Air NZ of course, which will be as cheap as chips after its sad losses last year. Crazy, stupid fire sale. Elbow #5.
- Speaking of which, future takeover threats must now be managed. Minority shareholders have rights. If a future merger or takeover provides them a windfall, they have the right to sell, most likely to foreign corporates or hedge funds (subject to the 10% individual cap, if any). What would the Crown do in the face of such temptation? Could it face legal action from minorities if it blocked such a future sale? How is the public protected from future leveraged asset stripping? Elbow #6.
- Potential cross-shareholding complications arise, as confirmed by the Chair of the Commerce Commission at the Commerce Committee hearing this morning. (I can’t comment on the Committee’s views but can on the issues diiscussed in public hearing). Lets say a foreign energy company bought the maximum allowable shareholding in each of the 3 SOE generators – risks of information pooling, coordination and anti-competitive behaviour would need to be policed by the Commission. At best there would be a lag while consumers suffered and prices rose. The Crown itself would have to be subject to Commission oversight in this regard. Sound complicated? Elbow #7.
Back to the original dilemma: did John Key know about all these issues when he started this privatisation crusade? If so, why was the Government not more transparent about them all before the election – with the public and even with its potential coalition partner?
Oh yeah, I momentarily forgot. It’s politics.
That being the case, lets fight this crazy plan to the last comma.
Yesterday the National government released their much anticipated Energy Strategy. The first draft that was released for consultation was pretty poor, and the final version is even worse.
While they claim they are still committed to the goal of having 90 percent of our electricity generated from renewable sources, most of their actual plan heads in the other direction.
We have an abundance of renewable energy sources in New Zealand. We could be world leaders in renewable energy. Instead the National government want to focus on extracting more fossil fuels like gas and oil.
It’s a short-sighted approach that does nothing to insulate us from the inevitable price increases that are on the way, not to mention the damage it will do to our environment.
National trumpets the fact that the amount of electricity we’ve generated in the last few years from renewable sources has increased, never mind the fact that it’s rained quite a bit. What happens when we get another dry year? We need more wind, more solar, more local generation, and more of a focus on energy efficiency.
It’s great that the National government have at least said they agree with the 90% renewable target put in place under the last Labour government, but we need to do a lot better if we’re going to meet it.
A March 12 explosion at the earthquake-damaged Fukushima Daiichi nuclear power plant in Okuma, Japan, appears to have caused a reactor meltdown.
The key piece of technology in a nuclear reactor is the control rods. Nuclear fuel generates neutrons; controlling the flow and production rate of these neutrons is what generates heat, and from the heat, electricity. Control rods absorb neutrons — the rods slide in and out of the fuel mass to regulate neutron emission, and with it, heat and electricity generation.
A meltdown occurs when the control rods fail to contain the neutron emission and the heat levels inside the reactor thus rise to a point that the fuel itself melts, generally temperatures in excess of 1,000 degrees Fahrenheit, causing uncontrolled radiation-
If New Zealanders are asked over the next few years to reduce power use or face blackouts, the responsibility will fall squarely on Energy Minister Gerry Brownlee. Just days before Christmas, while everyone was distracted by other things, he announced that the Whirinaki power plant will be sold and the reserve energy scheme put in place by the previous government will be abolished.
In other words, if we have a dry winter and the hydro lake levels fall too low, there won’t be a back up generator. Brownlee is placing his blind faith in the market, just as Max Bradford did before him. The market failed to deliver in the past, there is no reason to think it will behave any differently in the future.
An effectively functioning market will match supply and demand as closely as possible. That works OK when everything is operating normally, but it doesn’t leave much in the way of a ‘reserve’ should unforseen events happen, such as a dry winter. It wouldn’t make economic sense, what commercial operator looking for a profit would invest in a reserve generator that would only be needed in exceptional circumstances? That’s why the last government put a back-up system in place.
The announcement that the Whirinaki plant will be sold also amounts to another broken promise from the National government. Before the election they promised Kiwis they wouldn’t sell any state assets during their first term, yet now they’re putting a multi-million dollar power plant on the auction block.
National’s decision to sell Whirinaki and abolish the reserve energy scheme is short-sighted and foolish. It’s ordinary kiwis who will pay the price if things go wrong. If we have a dry winter and electricity generation can’t meet demand, prices will sky rocket.
Later this week Kiwirail are likely to begin consultation on the closure of rail in the far north on behalf of the government.
I’ve got an opinion on this question which is not that popular with friends on both the right and left.
I think the rail link to Marsden Point should be completed. It is probably the key to a decent integrated transport system for New Zealand.
Marsden Point is the best port in the country. Deep water, natural and because it is so far north it saves sailing time for the massive ships that will be servicing NZ in the future.
The road industry hate the idea. Port of Auckland’s owner not impressed. Auckland colleagues don’t agree.
But worth talking about before the options are narrowed.
Interesting little press statement on Friday.
Genesis Power Limited, trading as Genesis Energy, is considering making an offer of up to $300 million unsecured, subordinated Capital Bonds to the New Zealand public.
The proceeds of the offer are intended to be used as part of the funding for the acquisition of the Tekapo power stations.
Whether it pushes prices up will depend on what happens to the cash that Meridian gets. If it is used to pay down their debt then it is all neutral and will make no difference to prices.
If Bill English is successful in his attempt to withdraw capital from Meridian then the overall indebtedness of the companies will increase and power prices will go up to cover the increase in interest costs.
We will be watching.
I was interested in a small story that came through on email yesterday regarding the potential for saving energy simply by not wasting food. The American Chemical Society estimates that the US alone could save the energy equivalent of 35o million barrels of oil per year without spending a penny, or reducing quality of life, just by not wasting food.
It takes the equivalent of about 1.4 billion barrels of oil to produce, package, prepare, preserve and distribute a year’s worth of food in the United States. The U.S. Department of Agriculture estimates that people in the U.S. waste about 27 percent of their food. That’s a huge potential energy saving.
Percentage of Various Foods Wasted in the U.S.
Fats and oils 33%
Sugar and other caloric sweeteners 31%
Meat, poultry, fish 16%
Dry beans, peas, lentils 16%
Tree nuts and peanuts 16%
I wonder how New Zealand would compare? I have to confess that I’m a bit of a food waster. Veges often end up in the compost bin because they go bad before I get to them. I also have to admit that despite my best intentions, I’m pretty shocking when it comes to eating leftovers! I always cook too much and quite a bit of it ends up in the bin.
So how can we reduce the amount of food that we waste? For starters we could get the supermarkets to sell vegetables that don’t go off within 3 days of purchase…
Yesterday Pansy Wong put out a press statement lauding the National government’s move to “kickstart New Zealand’s fledgling biodiesel industry”. Coincidentally, I’ve been visiting biofuel companies over the past few weeks and they’ve been telling me that the policies of the current National government are doing the opposite – they feel like the rug is being pulled from under them.
Before the last election the Labour government put in place a biofuels sales obligation. It would have required fuel retailers to mix a small amount of biofuels into their blends, thus guaranteeing a market for biofuel producers and ensuring the development of the fledgling industry, whilst at the same time also reducing our carbon emissions from transport.
For reasons known only to them, National repealed the sales obligation as soon as it took office and replaced it with a subsidy scheme for biodiesel. It was an odd move for a government that claims it wants to cut government spending – the sales obligation wouldn’t have cost the government anything, it would have put the cost back onto the oil industry, unlike their subsidy.
Biofuel producers I’ve spoken to have all said the same thing, as soon as the sales obligation was removed the oil companies walked away.Their slick marketing may try to convince us they care about sustainability and the environment, but in reality the mighty dollar rules.
The biofuel sales obligation wasn’t perfect, and I think companion legislation ensuring the sustainability of the feedstock (the material the biofuels are made from) was also needed. But recent history has shown that left to its own devices without any sort of government regulation, the oil industry has no intention of supporting biofuels. Gerry Brownlee’s biodiesel grants scheme has been a flop. It’s time to go back to the drawing board.
Yesterday the National/ACT government pushed through the Electricity Industry Bill. It will do nothing to deal with rising power prices, fails to address issues around sustainability, and despite the rhetoric, doesn’t increase the security of supply. The evidential base for many of the changes the Bill imposes simply isn’t there.
The Treasury, the Ministry for Economic Development, and the Institute of Professional Engineers all raised concerns about the SOE ‘asset swap’ that will see the Tekapo A and B generators switched for Meridian to Genesis, thus breaking up the Waitaki hydro system. Treasury argued that the government hadn’t put together a business case to justify the swap, yet they went ahead and did it anyway. Given these are multi-million dollar state assets we’re talking about, that’s pretty concerning.
The Institute of Professional Engineers argued that splitting up the Waitaki hydro system could lead to water being used less efficiently given the competing generators would be encouraged to maximise their market position. They argued that no evidence had been presented to demonstrate that the benefits of the (small) increase in competition the swap is designed to create will outweigh the risks.
The government has also dodged some of the real issues. National claims to be committed to the goal of having 90 percent of our electricity generated from renewable sources by 2025, but they’re doing nothing to achieve that. It’s just more hollow rhetoric. In fact, Gerry Brownlee’s obsession with mining and mineral prospecting suggests they actually want to see less of a focus on renewables.
Then of course we come back to the biggie – power prices. Brownlee’s advice to those concerned about the increased cost of electricity is to switch companies. Does he really expect everyone to jot down their meter reading everyday and work out which company they should switch to? Perhaps if they set a common standard for smart electricity meters that might help consumers keep track of their electricity use and make it easier to switch, but they’re not even willing to do that.
The Electricity Industry Bill fails to address the big issues. It’s another case of National reverting to their 1990s ‘the market knows best’ mantra. Not surprising, therefore, that the loudest interjector in the House during the Third Reading of the Bill was Maurice Williamson. It was Williamson and Max Bradford who hacked up and partially privatised the electricity network in the first place, promising us that competition would lead to lower power prices – how did that work out in the end?
David Shearer is encouraging Labour MPs to focus on innovative businesses.
Dazza and I went to see a Green Diesel group in Alicetown. Great business with chance of making it big. Good experience in international oil. Into recyling.
Most important is the ability to massively reduce pollution from diesel – and to use their fascinating testing system to prove the results.
The first bus company or owner of service station chain that gets into this will win big.
Remove the biofuels sale obligation on oil companies on the basis that it is nanny state!! At a stroke, destroy investor confidence among biofuel producers.
Rush to repair the damage by offering biofuel producers a fat taxpayer funded subsidy. Producers decline to uplift the subsidy, of course, because (competitively priced) biofuels are just too much bother for oil companies now that the legal obligation on them has been removed.
A good journo has exposed the Emperor being without clothes. The Press today carried a story in which Energy Minister Gerry Brownlee is unable to rule out power prices increasing as a result of his daft idea to split the Waikati River power generation system from Meredian ownership and give Tekapo A and B power stations to SOE competitor, Genesis. Reducing power price rise pressures was a core purpose of the bill Gerry steered through with opposition from Treasury and many in the power industry.
I’ve posted several times about the fledgling New Zealand biofuels industry and how I think the current National government have pulled the rug out from under it. In comments people have often raised concern about the potential for biofuels to create other problems such as food shortages. That’s one of the reasons I’m so keen to see a lot more biofuel development that uses waste product as its feedstock.
But the use of waste to produce energy isn’t limited to biofuels. The Dominion Post had an interesting little story today on its Small Business page about Peter Yealands from Yealands Estate. He’s going to be using prunings from his vineyard to provide energy. This will save 22,000 tonnes of LPG and $80,000 during the vintage. EECA has backed the project with a 40 percent ($200k) subsidy.
The prunings will be burned in two boilers with modified doors that are being imported from the US. They burn clean, releasing no smoke and leaving only about 10kg of ash at the end of each bale. That ash will be mixed with mulch made from the rest of the prunings and put back on the land (only about 10% of the prunings will be burned).
This is the kind of energy innovation we should be encouraging a lot more of. Good to see EECA getting behind it. The question now should be – how do we get more of it?
On Thursday Gerry Brownlee finally released his over-promised revised New Zealand Energy Strategy and Energy Efficiency and Conservation Strategy. Basically he’s taken two heavyweight strategies put in place by the previous Labour government, both of which were well-informed by evidence and soundly argued, and replaced them with a single, lightweight missive that’s full of contradictions.
Brownlee’s revised strategy places a lot of emphasis on extracting more non-renewables such as coal and gas, whilst at the same time committing to Labour’s goal of 90 percent renewable electricity generation by 2025. In the case of gas, explorers will be looking for a viable domestic market before they go drilling wells, the most likely being gas-fired power plants. How that squares with a target for greater renewable electricity is a mystery to everyone but Mr Brownlee.
Questioned on the lightweight nature of the new document, Brownlee argues detailed plans become ‘quickly out of date’. I guess that’s a telling commentary on the National government’s modus operandi. I wonder whether the draft strategy had to be re-printed at the last minute to accommodate National’s humiliating about-face on mining in National Parks?
After reading through the new draft my question for Gerry Brownlee is pretty simple: Where’s the plan? Aspirational goals are all very well (and the plan is light even on those) but if you have no idea how you’re going to achieve them they’re pretty meaningless.
In the House on Thursday I questioned Gerry Brownlee on his disastrous Biodiesel Grants Scheme. Only about $230,000 of the $36 million set aside for the scheme has been taken up. Five companies have signed up, but no new companies have joined since July last year. It’s a long way short of Brownlee’s promise to create 240 new jobs and ensure that biofuels play a big part in our ‘energy mix’ of the future.
Brownlee chose to blame the industry for the scheme’s lack of success, despite the fact that he was warned from the very beginning it wouldn’t work. One of his first actions as Minister was to remove the biofuel sales obligation that was put in place by the previous Labour government. That would have generated sufficient demand for the biofuels industry to develop sustainably without the need for government subsidies.
Brownlee’s approach as Minister appears to be to ignore all the evidence about what actually works, only listen to the advice of those he agrees with, and then find someone else to blame when things go wrong. But I guess that’s what we should expect from the guy who thinks New Zealand’s future prosperity depends on digging up our National Parks and exporting them.