CO2 emissions are Southern asset sales' dirty secret

Nicky Chapman examines the consequence for the South of state asset sales.
One thing's missing so far in all the hoo-hah about whether we should partially sell some of our state assets: the consequences of doing so for Southland and Otago.

These consequences are to do with the region's estimated six billion "economically recoverable" tonnes of lignite, three billion under the fertile paddocks of Eastern Southland alone.

One of the state assets up for partial sale, Solid Energy, proposes to convert this lignite to briquettes, diesel and urea. Because lignite (brown coal) is a particularly low-quality fuel, the conversion process itself emits a lot of CO2, as well as the end products. Quoting Solid Energy's own estimates, the Greens' Dr Kennedy Graham has noted that the lignite projects will add an extra 10 to 20 million tonnes of carbon emissions annually to our current 70+ million tonnes (which we had promised to bring down).

Solid Energy acknowledges the reality of climate change, and has said it will take responsibility for its emissions. There are a few snags with that. Does Solid Energy just mean that it will pay the carbon charge?

That will mean others will actually be responsible for reducing emissions.

Does it mean complying with the Emissions Trading Scheme?

That is likely to give Solid Energy 90% of its emissions free for years. Does it mean using carbon capture and storage technologies?

Reports on this show just how expensive these still-developing technologies are. In our earthquake-prone land, we may never be able to safely capture and store CO2.

Nor can we plant endless numbers of trees. Some might say that we do not need to be responsible for emissions if the lignite products are burned offshore, but that's a risky (and immoral) assumption for an exporting nation.

We do have democratic instruments to help us make responsible decisions, and play our part in averting climate catastrophe. Unfortunately, so far they haven't been much cop. The Emissions Trading Scheme hasn't slowed down Solid Energy's plans.

The Resource Management Act was used to shut out community involvement in the decision to build the first briquetting plant. This could also happen with the larger lignite project plans. The Government could declare them to be "of national importance" and send them to the Environmental Protection Agency.

This government-appointed body does not have to call for local hearings and is subject to major political influence.

How do asset sales fit in with these climate change issues?

The answer is further loss of regional autonomy.

Like his elected bosses, Solid Energy's Dr Don Elder is keen to sell, but not to help the state's hungry coffers.

It is unlikely the "mum-and-dad" and/or iwi investors can help much with his big plans for lignite. Only overseas businesses have the money to help us to get our hands dirty.

Investors will expect control for their money. We are at present negotiating a trade deal to ensure more can secure it: the Trans Pacific Partnership (TTP). Prof Jane Kelsey, of the Auckland Law School, has noted that the TPP will enable overseas investors to sue the government for reducing their profits. She is particularly worried about Pharmac's ability to negotiate for more affordable drugs, but the concerns apply generally. If half of Solid Energy were sold to TPP members, then foreign-owned coal mining companies could sue taxpayers if the government pulled out of lignite mining, or increased carbon charges. This is already the case with Chinese investors under the NZ-China "Free Trade" agreement.

In short, selling Solid Energy shares could limit our choices and/or actively penalise our economy.

There are other ways to develop and grow our energy resources. Venture Southland, a joint initiative of the Invercargill City Council, Southland District Council and Gore District Council, has just released its Southland Energy Strategy 2011. It's a great combination of visionary and practical thought. The risks of lignite extraction are clear; its benefits seem few, given the many other good ideas for increasing energy efficiency and using Southland's many renewable energy assets.

Both Labour and the Greens oppose asset sales and lignite mining, with Labour having just confirmed its opposition to mining lignite with present technology, "because of the high volume of greenhouse gases produced".

When Bill English opened Solid Energy's lignite-to-briquette plant in September, he talked of the "huge opportunities" from Southland lignite. There are no opportunities in extreme weather, rising sea levels and acidic oceans. We need to persuade all our politicians, local and national, that selling Solid Energy shares to "develop" lignite will bring tragically irreversible changes to our landscape, our CO2 emissions, and our identity as a region and as a country.

• Nicky Chapman comes from four generations of Southland farmers, and is a member of Transition Town Port Chalmers.