tag:blogger.com,1999:blog-72631290892325139802024-03-13T12:06:42.201+11:00The Oil Drum - ANZBig Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.comBlogger192125tag:blogger.com,1999:blog-7263129089232513980.post-70026373170562324362017-02-19T10:12:00.001+11:002017-02-19T10:12:08.017+11:00The simple truth: Coal-fired generators have no future in Australia Lots of high quality energy and climate articles in he Australian press this week.
* <a href="http://peakenergy.blogspot.com.au/2017/02/the-simple-truth-coal-fired-generators.html">The simple truth: Coal-fired generators have no future in Australia </a>
Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-2234810911381993272017-02-07T18:12:00.001+11:002017-02-07T18:12:34.436+11:00Malcolm Turnbull - Energy Magician Malcolm Turnbull really isn't having a good time of things lately. If he'd actually done something positivie in the last couple of years I'd have more sympathy but as it is he seems to have been reduced to a servant of the coal industry.<p>
At least he is finally rid of Cory Bernardi...
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* <a href="http://peakenergy.blogspot.com.au/2017/02/malcolm-turnbull-energy-magician.html">Malcolm Turnbull - Energy Magician</a><br/>
* <a href="http://peakenergy.blogspot.com.au/2017/02/standing-up-to-bully.html">Standing Up To The Bully</a><br/>
* <a href="http://peakenergy.blogspot.com.au/2017/02/how-things-change-when-you-really-want.html">How Things Change When You Really Want To Be Prime Minister...</a><br/>
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<div align="center"><blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Remember in 2010 when <a href="https://twitter.com/TurnbullMalcolm">@TurnbullMalcolm</a> threw his support behind 100% renewable energy supply within a decade? <a href="https://twitter.com/hashtag/npc?src=hash">#npc</a> <a href="https://t.co/HDNJ6WLJPc">https://t.co/HDNJ6WLJPc</a></p>— Kristina Keneally (@KKeneally) <a href="https://twitter.com/KKeneally/status/826609511725096961">February 1, 2017</a></blockquote>
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Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-6987227518976525782017-01-26T21:18:00.001+11:002017-01-26T21:20:06.503+11:00Revisiting Australia's ground-breaking first commercial solar power plant at White CliffsThe ABC has a look back at Australia's first commercial <a href="http://peakenergy.blogspot.com/2008/04/concentrating-on-important-things-solar.html">solar thermal power plant</a>, at White Cliffs in NSW - <a href="http://www.abc.net.au/news/2017-01-13/revisiting-australias-first-commercial-solar-power-plant/8017198">Revisiting Australia's ground-breaking first commercial solar power plant at White Cliffs</a>.
<blockquote>Located about 250 kilomtres east of Broken Hill, the $1.9 million plant generated electricity from 1982 until 2005, using two different technologies.
<p>
Initially, the solar thermal power station concentrated the sun's energy to produce steam from water which was used to drive a steam engine/generator system. In 1997 it was transformed using the latest photovoltaic (PV) technology, with the cells directly converting the concentrated sunlight to electricity.</blockquote>
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<div align="center"><a href="http://www.abc.net.au/news/2017-01-13/revisiting-australias-first-commercial-solar-power-plant/8017198"><img src="http://www.abc.net.au/news/image/8175172-3x2-700x467.jpg" width=500/></a></div>
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<div align="center"><blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">A look back at Australia's first commercial solar power plant <a href="https://t.co/Hff4Q1dzcu">https://t.co/Hff4Q1dzcu</a> via <a href="https://twitter.com/abcnews">@ABCNews</a></p>— Big Gav (@biggav) <a href="https://twitter.com/biggav/status/824559926722695168">January 26, 2017</a></blockquote>
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<p>Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-75740039136073406572016-12-19T21:51:00.000+11:002016-12-19T21:51:00.543+11:00 ARENA solar farms begin to come onlineThe Guardian has an article on an ARENA funded 20 MW solar farm at Barcaldine - <a href="https://www.theguardian.com/environment/2016/dec/14/queenslands-largest-solar-farm-plugs-into-the-grid-a-month-early?CMP=share_btn_tw">Queensland's largest solar farm plugs into the grid a month early</a>.
<blockquote>The early delivery of the 20 megawatt plant, one of the first in the country to be funded by the Australian Renewable Energy Agency, was evidence of the growing speed and proficiency of big solar developers, said Arena’s chief executive, Ivor Frischknecht. It is to be followed by a dozen new large-scale solar farms to be built across Australia by the end of 2017. ...
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Arena has committed $1.1bn in funding to developers of more than 270 renewable energy projects, who are expected to at least match that investment. This includes $20m to Origin Energy’s 107 megawatt Darling Downs solar farm at Dalby, set to be Australia’s largest operating plant by the end of next year. Another project, Genex Power’s 50 megawatt Kidson solar farm west of Townsville, will be built on an old goldmine site.</blockquote>
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<div align="center"><a href="https://www.theguardian.com/environment/2016/dec/14/queenslands-largest-solar-farm-plugs-into-the-grid-a-month-early?CMP=share_btn_tw"><img src="https://i.guim.co.uk/img/media/a7d5b9d816348f4fd730a7ac451dba293ddd5d15/0_400_4384_2630/master/4384.jpg?w=620&q=55&auto=format&usm=12&fit=max&s=7e66c8623c6b3c00f417d361aa6faf9d" width=500/></a></div>
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Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-14538854391688133442016-12-08T23:27:00.001+11:002016-12-08T23:27:44.126+11:00Australian Government killed emissions scheme despite knowing it could shave $15 billion off electricity bills The Australian government seems to be copping a lot of bad press over their failed energy policies, backflipping on a rare attempt at common sense on carbon pricing earlier this week and now being asked to explain why they are keeping energy prices artificially high.
<p>
* <a href="http://peakenergy.blogspot.com.au/2016/12/australian-government-to-reintroduce.html">Australian Government To Reintroduce Carbon Pricing ?</a><br/>
* <a href="http://peakenergy.blogspot.com.au/2016/12/australian-government-killed-emissions.html">Australian Government killed emissions scheme despite knowing it could shave $15 billion off electricity bills </a>
<p>Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com1tag:blogger.com,1999:blog-7263129089232513980.post-31661456225189002792016-04-02T13:28:00.002+11:002016-04-02T13:28:29.620+11:00UpdateTOD ANZ is pretty much as dead as The Oil Drum these days, however I still have the occasional burst of energy at <a href="http://peakenergy.blogspot.com.au/">Peak Energy</a>.
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Some recent articles with an Australian slant include:
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<a href="http://peakenergy.blogspot.com.au/2016/03/redflow-launches-home-solar-storage.html">Redflow launches home solar storage battery to take on Tesla Powerwall</a><br/>
<a href="http://peakenergy.blogspot.com.au/2016/03/protean-begins-deployment-of-30-wave.html">Protean begins deployment of 30 wave energy devices </a><br/>
<a href="http://peakenergy.blogspot.com.au/2016/03/the-smh-reports-that-woodsides-browse.html">Browse Floating LNG Project Shelved</a><br/>
<a href="http://peakenergy.blogspot.com.au/2016/03/heating-fresh-water-and-electricity.html">Heating, fresh water and electricity from seawater and sunlight</a><br/>
<a href="http://peakenergy.blogspot.com.au/2016/03/message-to-australia-hands-off-timors.html">Message To Australia: 'Hands Off Timor's Oil'</a><br/>
<a href="http://peakenergy.blogspot.com.au/2016/03/port-augusta-pushing-for-solar-thermal.html">Port Augusta Pushing For Solar Thermal Power To Replace Coal</a><br/>
<a href="http://peakenergy.blogspot.com.au/2015/12/victorias-first-wave-power-unit.html">BioPower wave power unit deployed in Southern Ocean</a><br/>
<p/>Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-3135514952055437662013-09-17T19:56:00.003+10:002013-09-17T19:56:54.333+10:00What happened to advanced biofuels ? I've got a post up at Peak Energy in developments in the realm of advanced biofuels, with cellulosic ethanol plants beginning to appear in the wild - <a href="http://peakenergy.blogspot.com.au/2013/09/what-happened-to-advanced-biofuels.html">What happened to advanced biofuels ?</a>.
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<center><a href="http://peakenergy.blogspot.com.au/2013/09/what-happened-to-advanced-biofuels.html"><img src="http://www.bp.com/content/dam/bp/images/core-editorial-main/World%20biofuels%20production-area.jpg" width=500/></a></center>Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com1tag:blogger.com,1999:blog-7263129089232513980.post-23741300082550288112013-09-15T14:16:00.002+10:002013-09-15T14:16:44.886+10:00Manufacturing a gas crisis I've got a post at Peak Energy about the east coast "gas crisis" - <a href="http://peakenergy.blogspot.com.au/2013/09/manufacturing-gas-crisis.html">Manufacturing a gas crisis</a>.
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<center><a href="http://peakenergy.blogspot.com.au/2013/09/manufacturing-gas-crisis.html"><img src="http://resources3.news.com.au/images/2012/12/07/1226532/469747-121208-b-shale-map.jpg" width=500/></a></center>
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<center><a href="http://peakenergy.blogspot.com.au/2013/09/manufacturing-gas-crisis.html"><img src="http://2.static.australianindependentbusinessmedia.com.au/sites/default/files/styles/full_width/public/1111.JPG?itok=pJ1PDiTp" width=500/></a></center>
Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com2tag:blogger.com,1999:blog-7263129089232513980.post-7202385857295376562013-09-12T22:52:00.003+10:002013-09-12T22:52:56.248+10:00Wind Power Makes Hydrogen for German Gas GridHydrogen is often derided as a replacement fuel for vehicles but I think the idea that it can be used as a complement or substitute for natural gas is a good one, especially where excess wind power or solar power is available - <a href="http://peakenergy.blogspot.com.au/2013/09/wind-power-makes-hydrogen-for-german.html">Wind Power Makes Hydrogen for German Gas Grid</a>.Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-34214475226981641912013-09-12T22:27:00.002+10:002013-09-12T22:51:03.015+10:00Is The Syrian War About Gas Pipelines ? I've got a post at Peak Energy looking at theories that the conflict in Syria is being driven by gas pipeline politics - <a href="http://peakenergy.blogspot.com.au/2013/09/is-syrian-war-about-gas-pipelines.html">Is The Syrian War About Gas Pipelines ?</a>.Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-63834222220335404102013-09-12T22:25:00.001+10:002013-09-12T22:25:20.518+10:00Peak Coal In China ?I've got a post at Peak Energy on a new report from Citibank predicting peak coal demand in China by 2020 - <a href="http://peakenergy.blogspot.com.au/2013/09/peak-coal-in-china.html">Peak Coal In China</a> - with obvious implications for Australian coal mines and exports.Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-11036222739910296962013-09-07T09:36:00.001+10:002013-09-07T09:36:29.223+10:00Australian Election 2013: Abbott government could be worse than we feared <i>Cross posted from <a href="http://peakenergy.blogspot.com.au/2013/09/australian-election-2013-abbott.html">Peak Energy</a></i>.
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Judging by the polls it seems that tomorrow's election is going to result in us having a turnip for Prime Minister for the next 3 years (barring some sort of miracle that results in Malcolm Turnbull replacing Abbott during that period). The Murdoch media and the sorry remnants of the Fairfax press have been fervently supporting this result for the entire campaign (with the lone exception of <a href="http://www.crikey.com.au/2013/09/06/election-editorials-all-the-papers-bar-the-age-plump-for-abbott/">The Age</a>) which I tend to think has tipped the outcome from closely fought to a comfortable win to the LNP coalition.
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The result of the last election was pretty much perfect from my point of view, with Greens and principled independents like Rob Oakeshott, Tony Windsor and Andrew Wilkie (along with occasionally entertaining mavericks like Bob Katter and Nick Xenophon) holding the balance of power in both the lower and upper houses of parliament, preventing the Liberals from governing and ensuring that Labor couldn't give in to it's own worst instincts too often (though they did manage to backstab Wilkie along the way).
<p>
Things are still looking relatively hopeful in the Senate, with a reasonable chance of the balance of power still being held by the Greens and Independents which means the election will still be of some interest (and Abbott may yet be hobbled when he gets into power - I wonder if he'll be parroting Paul Keating's "unrepresentative swill" comments this time next week) - and if that doesn't work out you can always play a <a href="http://www.crikey.com.au/2013/09/06/cocktail-hour-guy-rundles-election-night-drinking-game/">drinking game</a>.
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<a href="http://www.economist.com/news/leaders/21584343-kevin-rudd-just-about-deserves-second-turn-lucky-no-more">The Economist</a> and <a href="http://www.theguardian.com/commentisfree/2013/sep/06/australian-election-editorial">The Guardian</a> are the only other periodicals I could find recommending the current government be re-elected (which is unsurprising given their basically flawless <a href="http://www.crikey.com.au/2013/09/05/labors-economic-record-hits-and-a-couple-of-misses/">economic track record</a> over the past 6 years), though I don't imagine they'll be swaying too many voters tomorrow.
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The Guardian has a <a href="http://www.theguardian.com/world/2013/sep/06/two-party-preferred-vote-narrows">last minute poll</a> showing the gap is closing (hopefully its accurate) after the coalition released their policy costings a day before the election, trying as hard as possible to avoid any policy scrutiny beyond their endless "stop the boats" nonsense.
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Its been a recurring dream of mine that someone would put billboards up along every freeway showing how many legal immigrants were allowed in under the Howard government compared to the number of refugees who arrived by boat - perhaps the 1 million+ legals to a few thousand illegals disparity might make the gullible closet racists of the outer suburbs realise they are being hoodwinked by this tripe.
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<blockquote>The opposition leader, Tony Abbott, and the Coalition have chosen to treat the democratic process with contempt, presumably because the polls, clearly pointing to their victory, make them believe they can. They have comprehensively evaded scrutiny, with no policy costings until 48 hours before the ballot. For months, there has been a blank space where their policies should be; candidates have been discouraged from speaking to the media and even from attending forums in their own communities; access has been denied to journalists who don’t toe the party line.
<p>
The Coalition has been steadied by a new Tony Abbott whose ruthless focus is in contrast to his past reputation for ill-discipline. His paid parental leave scheme, which rewards the wealthiest most, is at least an attempt to rectify his poor record when it comes to women. But really the Coalition has been relying on the exhausted electorate’s distrust of Labor after their self-obsessed infighting, and the view that it’s time someone else had a go. But do those voting for Tony Abbott really prefer Christopher Pyne to Bill Shorten, Andrew Robb to Penny Wong, Peter Dutton to Tanya Plibersek? Are they really happy to lay waste to Australia’s unique environment, just because it feels like someone else’s turn? Are they not alarmed by hints at spending cuts that go as far as austerity, which has wreaked such devastation in Europe?</blockquote>
ReNew Economy thinks that Abbott will eviscerate clean energy programs if he gets the chance - <a href="">Election13: Abbott government could be worse than we feared</a>.
<blockquote>Oh dear. This could be worse than we thought.
<p>
Over the past year, RenewEconomy has been highly skeptical about the Coalition’s approach to clean energy and climate change policies. In July last year we wrote of “the scary vision of the right” regarding future energy policies. Two months ago, we caught Opposition leader Tony Abbott dog-whistling to climate change deniers. In August we warned people not to be fooled by bipartisan targets.
<p>
That was just a small sample of our reservations. This week came the proof in the pudding: The Direct Action policy is not designed to meet any emission reduction at all, and Abbott confirmed he still thought the science was crap, despite the various leaks coming from the IPCC. Renewables do not even get a single positive mention in the Coalition’s newly released energy policy.
<p>
Were we being too pessimistic, as many people suggested? Depressingly, we don’t think so.
<p>
The bitter frustration is that – with a very few exceptions – none of this was investigated or probed by the mainstream media, which has retained a myopic obsession over forward estimates, the outlying budget forecasts that surely must rank as the most irrelevant and unreliable metric that has ever been centre stage of an election campaign.
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In the end, some of the main policies were indistinguishable between the major parties, to the point where Tony Abbott is now longer promising to stop the boats, just to slow them down (and to keep them off Sydney’s freeways). The budget savings outlined by Joe Hockey are so insignificant it makes a mockery of the budget scare campaign that obsessed the media, and provided cover for Abbott’s empty rhetoric. The only real difference came in climate and clean energy, and Labor was so terrified of playing that card that nobody noticed.
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This myopia was reflected in the editorial endorsements published today. Extraordinarily, the Australian Financial Review, the Sydney Morning Herald, and The Australian (along with every other Murdoch tabloid) endorsed Abbott without making a single mention of climate change or clean energy policies. So much for it being a referendum on the carbon price. Only The Age made mention of it, noting the Coalition’s disgraceful “back-tracking” on climate. It endorsed Labor.
<p>
Are we obsessed with niche interests? Maybe. But the cost of carbon and electricity were central to the cost-of-living scare campaign that will contribute to the Coalition’s victory. Climate change and the transition to a low carbon economy will be central to Australia’s future economic performance. ...
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So now we find ourselves at the eve of an election victory and the introduction of a policy that remains a mystery. Does anyone know what Direct Action is? No. Has it been costed? No. Will it be able to meet more ambitious climate policies? Of course not. Was it ever designed to? Don’t be silly.
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Of more immediate concern is the future of the large scale renewables industry, which could be worth more than $20 billion in the next few years, but which is now surely in limbo.
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In July, we itemised five ways that Abbott could kill renewables in Australia. And he’s just about there. Repeal the carbon price? Tick. Review the renewable energy target with a view to diluting it or delaying it? Tick. Dissolve the Climate Change Authority? Tick. Dissolve the Clean Energy Finance Corporation? Tick. Slash funding for the Australian Renewable Energy Agency? Tick.
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Abbott may not get to be able to achieve all those things immediately, but his intentions are clear. The energy document produced this week made no mention of renewables apart from a desire to do something about wind energy. Its focus was entirely on extractive fossil fuels – coal, gas, oil, LNG, and thorium. Dig, baby, dig. Burn, baby burn. And it wanted to make the coal-fired generators profitable again.
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The energy policy document makes no mention at all of the major themes that are and will impact most on the energy industry (particularly the coal generators). They are: reduced demand, the push for efficiency, and the proliferation of rooftop solar and other forms of distributed generation. These will, as surely as night follows day, challenge the centralized business model so treasured by the incumbents and their conservative mouthpieces.
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The entire power base of the Coalition seems wedded to a utopian dream from the 1960s. It seems the only thing that can deny them is their access to capital that the centralized generation and vast networks require. Residential-scale solar and distributed energy happens in increments that are, at most, a couple of tens of thousands of dollars. Australian households have already put $8 billion, and are prepared to invest billions more.
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These bets are 100,000 times smaller, and it brings millions of competitors into the electricity game. This is where the issue of costs and equity will be fought in coming years. The fact that the Coalition does not even mention this in its flagship energy document suggests it is completely ill prepared. Or it will simply defend the conservative state owned governments that are trying to sell their impaired assets.</blockquote>Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-90713924519797581422013-09-01T16:03:00.003+10:002013-09-12T22:25:54.702+10:00A Floating LNG revolution in Western Australia I've got a post at Peak Energy on Woodside's decision to build 3 floating LNG plants for the Browse basin project off northern Western Australia - <a href="http://peakenergy.blogspot.com.au/2013/08/floating-lng-revolution-in-western.html">Floating an LNG revolution in Western Australia</a>.Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-92078310887113260172013-08-19T06:47:00.000+10:002013-08-19T06:47:00.362+10:00Our Clean Energy Future<i>Cross posted from <a href="http://peakenergy.blogspot.com.au/">Peak Energy</a> - <a href="http://peakenergy.blogspot.com.au/2013/08/our-clean-energy-future.html">Our Clean Energy Future</a></i>.
<p>
Following on my recent post bidding <a href="http://peakenergy.blogspot.com.au/2013/08/a-farewell-to-oil-drum.html">Farewell to The Oil Drum</a>, I'd like to have a look at what I view as our longer term future for energy production and consumption.
<p>
As noted in my previous post, for the time being the combination of unconventional oil extraction and the ramping up of extraction of natural gas (from both conventional and unconventional sources) has continued to push the point of peak oil production out into the future, defying the predictions of the more pessimistic peak oil observers. During this period we have seen a boom in the research and development of solutions to help us eliminate our dependency on fossil fuels, which I'll explore in this post.
<p>
Solutions can be divided into 3 groups :
<p>
<ul>
<li>Renewable energy - solar power, wind power, geothermal power, hydro power, ocean energy and biomass derived power (including biofuels)</li>
<li>Distribution of renewable energy - energy storage and the electricity grid</li>
<li>Adopting alternatives to oil and other fossil fuels - electric transport, bioplastic, alternatives to fossil fuel based fertiliser and new models for manufacturing, construction and agriculture</li>
</ul>
<p>
<h2>Renewable Energy</h2>
<p>
The graphic below shows the energy available from renewable energy sources annually compared to <a href="http://www.eia.gov/forecasts/ieo/index.cfm">global energy consumption</a>. The numbers are intended to give a rough idea of relative scale - for any given energy source a wide range of estimates can be found in the literature so the numbers are indicative.
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<div align="center">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbBpikw0tzmUcI_cBBy2RV8M3GVAqPG-mW8Tdck71S2BLiHc5OXBS45tGZPEiGzPDatXhyphenhyphenh5eLU4CkZjWA6hVfhAR3K91mhBAkN6qn02vhrMb48K-zl2F1vkaCu-dKZduLOuCCjE1YYoqH/s1600/Slide1.png" imageanchor="1" ><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbBpikw0tzmUcI_cBBy2RV8M3GVAqPG-mW8Tdck71S2BLiHc5OXBS45tGZPEiGzPDatXhyphenhyphenh5eLU4CkZjWA6hVfhAR3K91mhBAkN6qn02vhrMb48K-zl2F1vkaCu-dKZduLOuCCjE1YYoqH/s400/Slide1.png" /></a>
</div>
<p><p>
These numbers in some ways understate the amount of energy potentially available (ignoring solar power potential at sea or in <a href="http://ourcleanenergyfuture.blogspot.com/2009/04/space-based-solar-power.html">space</a>, for example, or wind power at <a href="http://peakenergy.blogspot.com/2008/01/alternative-wind-power-experiments.html">high altitudes</a> or <a href="http://ourcleanenergyfuture.blogspot.com/2008/12/floating-offshore-wind-power.html">far offshore</a>, or geothermal power <a href="http://www.scientificamerican.com/article.cfm?id=geothermal-power-plants-face-rocky-starts">deep below</a> the surface of the earth) but still serve the demonstrate that the renewable energy available to us is orders of magnitude larger than our current global energy consumption.
<p>
The contribution made by renewable energy to our energy needs is expected to <a href="http://www.iea.org/newsroomandevents/pressreleases/2013/june/name,39156,en.html">exceed that made by gas</a> (and double that made by nuclear power) by 2016, though progress needs to be <a href="http://www.iea.org/publications/freepublications/publication/name,37023,en.html">accelerated</a> if we wish to create a sustainable energy system.
<p>
<b>Solar power</b>
<p>
Solar power is the largest energy source available to us, dwarfing all other sources - renewable and non-renewable. Approximately 36,000 Terawatts of power could be captured by land based solar power generation - compared to current global energy use of around 16 TW. As a result, most of the plans floated for shifting to <a href="http://www.go100percent.org/cms/">100% renewable</a> energy (examples include proposals by <a href="http://www.scientificamerican.com/article.cfm?id=a-path-to-sustainable-energy-by-2030">Mark Jacobson</a> and <a href="http://www.theoildrum.com/node/3540">Stuart Staniford</a> and local plans for countries like <a href="http://reneweconomy.com.au/2013/germany-100-renewable-energy-and-beyond-78310">Germany</a> and <a href="http://reneweconomy.com.au/2013/another-myth-busted-on-the-road-to-100-renewable-electricity-52178">Australia</a>) rely primarily on solar power.
<p>
Solar power is not only the largest energy source available to us but it is also the fastest growing energy source, with solar power generation increasing by <a href="http://www.bp.com/en/global/corporate/about-bp/statistical-review-of-world-energy-2013/review-by-energy-type/renewable-energy.html">over 58%</a> in 2012.
<p>
There are a number of options for harnessing solar power - power generation using solar photovoltaic (PV) cells and solar thermal arrays along with <a href="http://www.theoildrum.com/tag/passive_solar_series">passive solar</a> techniques such as solar hot water heaters.
<p>
I have been of the view that <a href="http://peakenergy.blogspot.com.au/search/label/solar%20thermal%20power">solar thermal power</a> generation (also known as concentrating solar power or CSP) would become our most important source of power in the longer term. This view was based on a number of advantages that solar thermal possesses - it does not require rare or expensive materials (enabling it to scale without hitting resource limits), it can be built on (and is best suited to) arid land that has few other uses, it can incorporate energy storage (thus avoiding the intermittency issue), it is compatible with the existing centralised generation model and it can be combined with traditional sources of power generation (coal or gas) in hybrid power plants that allow an easy transition using existing connections to the electricity grid.
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An area of desert around 250 km by 250 km covered with solar thermal power generation could supply all the world's current electricity demand.
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<div align="center"><a href="http://europe.theoildrum.com/node/2583"><img src="http://www.theoildrum.com/files/map.jpg"/></a></div>
<p><p>
To my continuing dismay, this hasn't happened yet (though it was our fastest growing energy source in 2012) - primarily due to the lack of progress in pushing down costs - the <a href="http://peakenergy.blogspot.com.au/2013/08/the-lcoe-of-renewable-energy.html">LCOE</a> (levelised cost of energy) of solar thermal still being <a href="http://peakenergy.blogspot.com.au/2013/08/eight-alternative-energy-charts.html">around twice</a> that other renewable energy options.
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<div align="center"><a href="http://www.flickr.com/photos/nelsonminar/4769183655/"><img src="http://farm5.staticflickr.com/4074/4769183655_557f95ee88.jpg"/></a></div>
<p><p>
I retain some hope given that solar thermal technology remains relatively immature - there was a very long gap between the original plant (<a href="http://en.wikipedia.org/wiki/Solar_Energy_Generating_Systems">SEGS</a>) built in California in the 1980s and the next generation of plants built in <a href="http://www.abengoasolar.com/web/en/nuestras_plantas/">Spain</a> beginning in 2007 and the <a href="http://peakenergy.blogspot.com.au/2013/07/the-future-of-solar-centralised-or.html">south west of the US</a> shortly afterwards.
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<div align="center"><a href="http://peakenergy.blogspot.com.au/2008/04/concentrating-on-important-things-solar.html"><img src="http://www.theoildrum.com/files/solar-thermal-solucar.jpg"/></a></div>
<p><p>
Construction of plants is now spreading around the globe, with plants being built in <a href="http://peakenergy.blogspot.com.au/2013/07/flush-with-oil-abu-dhabi-opens-worlds.html">Abu Dhabi</a>, <a href="http://peakenergy.blogspot.com.au/2013/07/2-gw-solar-thermal-power-plant-planned.html">Kuwait</a>, <a href="http://cleantechnica.com/2013/07/08/solarreserve-wants-to-build-600-mw-solar-power-plant-in-saudi-arabia/">Saudi Arabia</a>, <a href="http://www.solarpowerworldonline.com/2011/01/egypt%E2%80%99s-first-solar-thermal-plant/">Egypt</a>, <a href="http://www.solarthermalmagazine.com/2013/08/06/state-of-isreal-nominates-abengoa-to-build-110mw-parabolic-trough-concentrating-solar-thermal-power-plant/">Israel</a>, <a href="http://www.ecoseed.org/renewables/solar/concentrating-solar-power/16468-morocco-kicks-off-construction-of-160-mw-solar-thermal-project">Morocco</a>, <a href="http://www.renewableenergyfocus.com/view/19445/abengoa-opens-hybrid-solar-gas-plant-in-algeria/">Algeria</a> (though at this point the immense <a href="http://peakenergy.blogspot.com.au/2011/12/harnessing-desert-sun-to-power-europe.html">Desertec</a> proposal has <a href="http://peakenergy.blogspot.com.au/2010/09/desertec-solar-hopes-cloud-over-as.html">fallen</a> <a href="http://peakenergy.blogspot.com.au/2013/07/desertec-raft-and-liner.html">off</a> the radar), <a href="http://www.csp-world.com/news/20121106/00574/abengoa-kicks-south-africas-first-csp-plants-construction">South Africa</a>, <a href="http://www.bloomberg.com/news/2013-06-14/godawari-starts-asia-s-biggest-solar-thermal-power-plant.html">India</a>, <a href="http://www.chinadaily.com.cn/business/2012-11/22/content_15950340.htm">China</a> and <a href="http://cleantechnica.com/2013/01/04/chile-installs-south-americas-1st-solar-thermal-plant/">Chile</a>.
<p>
While there are encouraging signs for solar thermal power, by and large it has been eclipsed by solar PV in recent years, with solar panel prices plummeting and manufacturing capacity surging. While <a href="http://peakenergy.blogspot.com.au/search/label/thin%20film%20solar">thin film solar</a> has also become competitive it is traditional silicon based solar PV that has dominated after years of being dismissed as being too expensive.
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<div align="center"><a href="http://reneweconomy.com.au/2013/bugger-the-utilities-wind-and-solar-will-be-built-anyway-74216"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1267J_enNYzm45QRd4egNCGOBPta0x-iIEyvyxubWsuNu0yTAe4b7pJ0X-5XyeEFxs4aAv-RYDRppP2PQQqewVVgUCxk8oYwyobiYr1W8vf03qVTCuQiL8vDainpqqz-QQ8EMHl3SRnWE/s320/bnef-solar-lcoe.png" width=500/></a></div>
<p><p>
Research into improving solar PV remains vibrant, with <a href="http://peakenergy.blogspot.com.au/2013/08/a-material-that-could-make-solar-power.html">new materials</a> and <a href="http://peakenergy.blogspot.com.au/search/label/cpv">concentrating solar power</a> techniques looking to push the <a href="http://peakenergy.blogspot.com.au/2013/07/australias-largest-concentrated-solar.html">cost</a> of solar PV below that of coal or gas fired power (the holy grail of <a href="http://reneweconomy.com.au/2013/graph-of-the-day-solar-grid-parity-in-102-countries-39133">solar grid parity</a>).
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<div align="center"><a href="http://www.flickr.com/photos/92075126"><img src="http://farm8.staticflickr.com/7405/9094451068_54479495ab.jpg"/></a></div>
<p><p>
<b>Wind power</b>
<p>
<a href="http://peakenergy.blogspot.com.au/search/label/wind%20power">Wind power</a> is the second largest renewable energy source available to us, with the potential supply also exceeding current global energy demand.
<p>
Wind power has also seen rapid growth over the past decade, with generation increasing by <a href="http://www.bp.com/en/global/corporate/about-bp/statistical-review-of-world-energy-2013/review-by-energy-type/renewable-energy.html">over 18%</a> in 2012 and accounting for more than half of new renewable energy supply. In Denmark it now supplies more than 28% of electricity consumption.
<p>
Wind power is now the cheapest source of renewable energy, with the LCOE being competitive with coal or gas fired power in many locations. Thanks to the merit order effect, wind power can also help <a href="http://peakenergy.blogspot.com.au/2011/09/how-wind-is-cutting-energy-costs.html">lower the cost</a> of power paid by consumers. While wind power is now a relatively mature technology, advances in <a href="http://www.wired.co.uk/magazine/archive/2013/02/start/danish-energy-gets-super-sized">turbine size</a> and <a href="http://peakenergy.blogspot.com.au/2011/07/building-bigger-better-wind-turbines.html">electromagnet technology</a> along with <a href="http://peakenergy.blogspot.com.au/2011/07/good-prospects-for-local-wind-mapping.html">optimisation</a> of wind farm sites are allowing the overall efficiency of generation to increase further.
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<div align="center"><a href="http://reneweconomy.com.au/2013/bugger-the-utilities-wind-and-solar-will-be-built-anyway-74216"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMd49b18lr5aMsRGJiLbYasBwxWcPWT-CVE1Vs1fP7PkT3Qs4wX_uBDMIxFIGjhfML6mCVUYeMHnL7KOS4ZaD4E7Dn0WOlplJnE2vv_P40nBGz4QfyDojaBBrS-MfOfxdlo6bTRWrb5H_T/s320/bnef-lcoe-wind.png" width=500/></a></div>
<p><p>
Like solar power, wind power can coexist with other uses of land - and <a href="http://peakenergy.blogspot.com.au/2011/11/south-korea-to-build-25-gw-offshore.html">large</a> wind farm developments can also be located <a href="http://peakenergy.blogspot.com.au/2013/08/worlds-biggest-offshore-wind-farm.html">offshore</a>.
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<div align="center"><a href="http://www.flickr.com/photos/arenamontanus/3497247850"><img src="http://farm4.staticflickr.com/3608/3497247850_e67cccc4be.jpg"/></a></div>
<p><p>
Also like solar power, wind power is criticised for its intermittency. While geographical diversity of generation (along with diversity of energy sources and expanded grids, which will be discussed later) can help to address this, energy storage can also be built into wind turbines, a technique used in <a href="http://peakenergy.blogspot.com.au/2013/07/new-ge-wind-turbines-include-energy.html">new models</a> from GE.
<p>
<b>Hydro power</b>
<p>
Hydro power is the most mature source of renewable energy (the burning of wood aside) and still accounts for more electricity production than solar, wind, and geothermal combined - however it has a growth rate (around <a href="http://www.csmonitor.com/Environment/Energy-Voices/2013/0722/Hydropower-the-unsung-hero-of-renewable-energy">3%</a> in 2012) lower than most other renewables.
<p>
Hydro power current provides 16% if global power generation - the 4 <a href="http://en.wikipedia.org/wiki/List_of_largest_power_stations_in_the_world">largest power stations</a> in the world are all hydro power projects.
<p>
Large scale hydro power doesn't have a lot of room for growth in the developed world, though the <a href="http://www.theguardian.com/global-development/2013/aug/10/china-india-water-grab-dams-himalayas-danger">Himalayan region</a> and <a href="http://peakenergy.blogspot.com.au/2013/08/will-huge-new-hydro-projects-bring.html">Africa</a> both still have significant room for growth.
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<div align="center"><a href="http://www.flickr.com/photos/nanoprobe67/5761031999/"><img src="http://farm6.staticflickr.com/5109/5761031999_068b4e2df2.jpg"/></a></div>
<p><p>
Microhydro power is an alternative that is underdeveloped and often has an <a href="http://peakenergy.blogspot.com.au/2013/08/the-lcoe-of-renewable-energy.html">LCOE quoted</a> that makes it competitive with wind power and with fossil fuels - however I've never seen any useful figures outlining the energy potential from this source (if you look at some <a href="http://www.treehugger.com/renewable-energy/gravitational-vortex-power-plant-is-safe-for-fish.html">designs</a> you'd guess that this is something that could be deployed very widely).
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<div align="center"><a href="http://peakenergy.blogspot.com.au/2013/08/the-lcoe-of-renewable-energy.html"><img src="http://dqbasmyouzti2.cloudfront.net/content/images/articles/IEA-LCOE-Q1-2013.jpg"/></a></div><p>
<p>
<b>Geothermal power</b>
<p>
<a href="http://peakenergy.blogspot.com.au/search/label/geothermal%20energy">Geothermal energy</a> is unusual compared to other large renewable power sources, in that it provides "baseload" power (thus placating those suffering from the "<a href="http://en.wikipedia.org/wiki/Base_load_fallacy">baseload fallacy</a>") unlike other more intermittent sources like solar, wind and ocean power. The potential supply of geothermal energy is approximately equal to current global energy demand.
<p>
The first geothermal power generation plant was constructed in 1904 in Larderello, Italy, followed by Wairakei, New Zealand in the 1950's then the Geysers in California in the 1960’s. In 2012, 24 countries operated geothermal plants for electricity production, generating around 12 GW in total.
<p>
In 2012, growth in geothermal power was less than 3%, leaving it very much a niche energy source. Geothermal power generation is currently concentrated in geologically active areas - the western US, Indonesia, The Philippines, New Zealand, Iceland, Costa Rica, El Salvador and east Africa.
<p>
As well as active power generation from traditional geothermal power sources (including <a href="http://ourcleanenergyfuture.blogspot.com/2008/11/low-temperature-geothermal-power.html">low temperature</a> geothermal, <a href="http://www1.eere.energy.gov/geothermal/heatpumps.html">ground source heat pumps</a> can be used to provide <a href="http://www.theoildrum.com/node/3593">direct heating</a>.
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<div align="center"><a href="http://peakenergy.blogspot.com.au/2007/11/geothermia-revisited.html"><img src="http://farm3.static.flickr.com/2198/1872396756_ffcdc08c52.jpg?v=0"/></a></div>
<p><p>
The great white hope for geothermal power generation is known as "Enhanced Geothermal System" (EGS) (or sometimes Hot Dry Rock or Hot Fractured Rock) - generating power by drilling holes deep into the earth's crust to circulate water through. The energy potential for this type of geothermal energy is <a href="http://www.technologyreview.com/news/406182/abundant-power-from-universal-geothermal-energy/">vast</a>, however progress so far in terms of producing commercial power has been very disappointing.
<p>
Some early experiments were built in Switzerland but have been <a href="http://www.earthtechling.com/2013/07/swiss-shaker-puts-geothermal-on-ice/">shut down</a> due to concerns about earthquakes being caused by the drilling. The most promising experiment is being performed by GeoDynamics in Australia's outback - progress has been extremely slow, with numerous setbacks occurring before a 1 MW pilot plant was finally commissioned this year. On a positive note, operation of the pilot is <a href="http://reneweconomy.com.au/2013/geodynamics-says-hot-rock-pilot-plant-beating-expectations-54241">beating expectations</a>.
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<div align="center"><a href="http://peakenergy.blogspot.com.au/2007/11/geothermia-revisited.html"><img src="http://farm3.static.flickr.com/2024/1902852373_09b8de06dd.jpg?v=0"/></a></div>
<p><p>
<b>Ocean energy</b>
<p>
Energy can be tapped from the oceans in 3 different ways - <a href="http://peakenergy.blogspot.com.au/search/label/tidal%20power">tidal power</a>, <a href="http://peakenergy.blogspot.com.au/search/label/wave%20power">wave power</a> and the little known <a href="http://peakenergy.blogspot.com.au/search/label/otec">OTEC</a> (Ocean Thermal Energy Conversion).
<p>
While there is a significant potential resource in ocean energy - broadly equivalent to our current energy use - the technology for exploiting all 3 forms of energy remains immature and costly. Tidal power has been commercially generated since the 1960's, with France's 240 MW "La Rance" power station only recently being eclipsed in size by a South Korean project. South Korea is looking to greatly expand tidal power production over the next 5 years and a range of projects are proposed for the UK, Australia and the United States - however it appears unlikely that we will see large scale tidal power production in the next couple of decades.
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<div align="center"><a href="http://peakenergy.blogspot.com.au/2008/02/tapping-source-power-of-oceans.html"><img src="http://www.theoildrum.com/files/tapping-tidal-stream.jpg"/></a></div>
<p><p>
Wave power and OTEC are even less advanced, however pilot projects are at various stages of development for both of them and interest will no doubt slowly build in size over time. Another even more exotic alternative is the generation of electricity using <a href="http://peakenergy.blogspot.com.au/2009/08/electricity-from-salty-water.html">differences in salinity</a> between bodies of water.
<p>
<div align="center"><a href="http://peakenergy.blogspot.com.au/2008/02/tapping-source-power-of-oceans.html"><img src="http://www.theoildrum.com/files/energyisland-otec.jpg"/></a></div>
<p><p>
<b>Biomass, Biogas and Biofuel</b>
<p>
Photosynthesis provides a steady stream of material that can be used for energy - with the caveat that there are limits before this impacts on our ability to produce food and maintain a healthy environment.
<p>
There are a range of ways of harnessing organic material for energy (other than the traditional approach of burning it for heat - which the <a href="http://www.ren21.net/Portals/0/documents/Resources/GSR/2013/GSR2013_lowres.pdf">REN21</a> (pdf) report on renewable energy notes is still the dominant use for biomass - contributing almost 7% of global energy supply) - using <a href="http://en.wikipedia.org/wiki/Biomass">biomass</a> to generate power, producing biogas which can be used for heat, power generation or for transport, producing biofuels that can replace or supplement traditional liquid fuels and for <a href="http://peakenergy.blogspot.com.au/2008/09/terra-preta-biochar-and-mego-effect.html">pyrolysis</a> which can generate biodiesel, fertiliser and biochar.
<p>
Biofuels have been the subject of widespread criticism (critics citing competition with food production and low EROI) and seem unlikely to be able to replace a significant proportion of our oil consumption. Production of ethanol and biodiesel has stagnated in recent years, with production <a href="http://www.bp.com/en/global/corporate/about-bp/statistical-review-of-world-energy-2013/review-by-energy-type/renewable-energy/biofuels.html">declining by 0.4%</a> in 2012.
<p>
<div align="center"><a href="http://www.ren21.net/REN21Activities/GlobalStatusReport.aspx"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHmscHjFkrSFrvK7zXlKX77Ii4_xReIWWvk2mkNtiJWVgKQETEcUJUg4Nj1nMjIg13pVakKMrwm5k8KY-j-njm-X_p71qoB8KRMh4D_Jog2Gtz2gLxt_sT224Zv8EFwhtwcKo7-k8MH8Ph/s400/Slide1.png" width=500/></a></div>
<p><p>
Other advanced biofuels such as <a href="http://peakenergy.blogspot.com.au/search/label/cellulosic%20ethanol">cellulosic ethanol</a> and <a href="http://peakenergy.blogspot.com.au/search/label/algae">algae based</a> biofuels have failed to be produced in significant quantities thus far.
<p>
Biomass based power generation also has its critics, though most seem to agree that it is <a href="http://peakenergy.blogspot.com.au/2009/05/biofuels-vs-biomass-electricity.html">preferable to biofuel production</a>. Global biomass power generation capacity was 58 GW in 2011 and is <a href="http://www.prnewswire.com/news-releases/market-data-biomass-power-generation-209064741.html">expected to grow</a> to 86 GW by 2021. The industry seems to be suffering some headwinds, with the largest biomass power plant (Tilbury in the UK) recently being <a href="http://www.theguardian.com/business/2013/aug/16/tilbury-power-station-mothballed">mothballed</a>. Another large scale project in the UK (<a href="http://www.powerengineeringint.com/articles/2013/08/drax-begins-biomass-conversion.html">Drax</a> still seems to be going ahead, and generation of power from waste is <a href="http://peakenergy.blogspot.com.au/2013/08/oslo-on-hunt-for-rubbish-to-burn.html">booming in Europe</a>.
<p>
<a href="http://peakenergy.blogspot.com.au/2008/03/banana-methane-powered-cars-pig-poo.html">Biogas</a> is the most promising of the biomass based energy generation approaches, with far fewer criticisms being leveled at it (most importantly, there is limited competition between food production and biogas production - the two are often complementary in fact - and the net energy available from biogas <a href="http://www.renewableenergyworld.com/rea/news/article/2010/03/why-is-biogas-renewable-energys-cinderella">far exceeds</a> that of biofuels). It can either be extracted from landfills or produced using "digesters" that process agricultural waste (or occasionally by exploiting <a href="http://peakenergy.blogspot.com.au/2008/01/turning-danger-into-power.html">natural sources</a> of biogas).
<p>
The upper limits for biogas production are not clear, though some studies claim vast amounts can potentially be produced - for example, one <a href="http://news.mongabay.com/bioenergy/2007/02/study-biogas-can-replace-all-eu-imports.html">European study</a> said that all of Europe's gas needs could be met with biogas. Biogas power generation apparently produced <a href="http://www.navigantresearch.com/newsroom/global-biogas-market-to-nearly-double-in-size-to-33-billion-by-2022">about 14.5</a> GW in 2012.
<p>
Biogas is not only the most environmentally friendly of the biomass based energy alternatives it is also the most versatile, with the gas being able to be used for heat, power (or a mix of both - <a href="http://peakenergy.blogspot.com/2008/03/cogeneration-at-home-ceramic-fuel-cells.html">combined heat and power</a>) or <a href="http://biomassmagazine.com/articles/9244/biogas-as-transportation-fuel-a-strong-start">transport</a>.
<p>
<div align="center"><a href="http://biopact.com/2007/02/study-biogas-can-replace-all-eu-imports.html"><img src="http://i76.photobucket.com/albums/j14/biopact/04145286700000.jpg?t=1171134553"/></a></div>
<p><p>
One last use for biomass is the production of biochar. Producers of biochar take dry biomass and bake it in a kiln to produce charcoal. Biochar is the term for what is left over after the energy is removed: a charcoal-based soil amendment. This process is called pyrolysis. Various gases and oils are driven off the material during the process and then used to generate energy. The charcoal is buried in the ground, sequestering the carbon that the growing plants had pulled out of the atmosphere. The end result is increased soil fertility and an energy source with negative carbon emissions.
<p>
<div align="center"><a href="http://peakenergy.blogspot.com.au/2008/09/terra-preta-biochar-and-mego-effect.html"><img src="http://www.theoildrum.com/files/terra-preta-eprida.jpg"/></a></div>
<p><p>
<h2>Distribution of renewable energy</h2>
<p><p>
<b>Smart Meters and Smart Grids</b>
<p>
Renewable energy (primarily solar and wind power) is often criticised for being intermittent.
<p>
In the traditional model of electricity generation and distribution, large, centralised power stations were built with sufficient capacity to handle expected peaks in demand - with significant amounts of capacity idle during non peak parts of the day / year (and brownouts occurring if demand did happen to exceed supply). Consumers were charged a regulated price that ignored fluctuations in supply and demand - instead supply was adjusted as far as was practicable to meet demand.
<p>
Adopting a more dynamic (market based) pricing mechanism would allow energy users to have an incentive to shape their energy use to the available supply, thereby enabling fluctuations in supply to be dealt with.
<p>
The keys to making this possible are to provide electricity consumers with <a href="http://peakenergy.blogspot.com.au/search/label/smart%20meters">smart meters</a> and the ability to alter their energy usage based on market price fluctuations. <a href="http://peakenergy.blogspot.com.au/search/label/smart%20grids">Smart grids</a> are required for electricity distributors to create a more <a href="http://cleantechnica.com/2013/08/11/flexible-grid-the-key-to-a-clean-energy-future/">flexible</a> grid incorporating a much more diverse range of power generators.
<p>
<p>
<b>Supergrids and The Global Energy Grid</b>
<p>
As well as making the grid more dynamic, interconnections between grids need to be expanded to enable a greater diversity of suppliers to be available across a wide region - this helps further address the issue of intermittency of supply - the sun may not be shining and the wind may not be blowing in one region however this won't be true across all regions making up a greater grid.
<p>
Proposals for extending regional grids into continent wide ones (usually by building HVDC connections between existing grids) tend to be dubbed "<a href="http://peakenergy.blogspot.com.au/search/label/super%20grid">supergrids</a>" - examples can be found for <a href="http://www.scientificamerican.com/article.cfm?id=how-to-build-the-supergrid">North America</a>, <a href="http://grist.org/climate-energy/germany-takes-the-first-step-toward-a-supergrid/">Germany</a> and the whole of <a href="http://www.nytimes.com/2012/01/17/business/global/17iht-rbog-grid17.html?pagewanted=all&_r=1&">Europe</a> and between <a href="http://peakenergy.blogspot.com.au/2011/12/harnessing-desert-sun-to-power-europe.html">Europe and North Africa</a>.
<p>
<a href="http://peakenergy.blogspot.com.au/2009/02/buckminster-fullers-critical-path.html">Buckminster</a> <a href="http://peakenergy.blogspot.com.au/search/label/buckminster%20fuller">Fuller</a> took this idea to its logical endpoint and recommended the creation of a "<a href="http://en.wikipedia.org/wiki/Global_Energy_Network_Institute">global energy grid</a>" as a step towards ending our dependency on fossil fuels.
<p>
<div align="center"><a href="http://www.geni.org/"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJtp9kjpkO7H4p__JtAiie2qSMCAz6w6BYpiEldWT2t8XrIPrxwTE4xUzoO8iNU7DFKdR9LIVGqD2YFhywEE8U0-PozIrKIncJUKGz_Mw6jE2MQ9zLYilEhpT0kJ2w9E2NdQ-EzoMfaTuO/s400/geni.png" width=500/></a></div>
<p>
<b>Energy Storage</b>
<p>
The final piece of transforming the electricity grid to distribute 100% renewable energy is building in sufficient <a href="http://en.wikipedia.org/wiki/Energy_storage">energy</a> <a href="http://peakenergy.blogspot.com.au/search/label/energy%20storage">storage</a> to ensure that suppliers have the ability to react to swings in demand as well as vice versa.
<p>
Traditionally energy storage has been available in greater or lesser amounts (depending on what grid you are connected to) in the form of <a href="http://en.wikipedia.org/wiki/Pumped-storage_hydroelectricity">pumped hydro</a> storage.
<p>
A wide range of other options have been proposed and explored over the years, ranging from <a href="http://www.greentechmedia.com/articles/read/texas-calls-for-317mw-of-compressed-air-energy-storage2">Compressed air energy storage</a> to batteries to <a href="http://en.wikipedia.org/wiki/Flywheel_energy_storage">flywheels</a> to generating <a href="http://peakenergy.blogspot.com.au/2008/08/hydrogen-economy-and-peak-platinum.html">hydrogen</a> (pumped hydro even has an <a href="http://reneweconomy.com.au/2013/pumped-hydro-storage-solution-for-a-renewable-energy-future-91567">ocean equivalent</a> which is one of the more promising options).
<p>
Most battery storage being implemented today involves either <a href="http://peakenergy.blogspot.com.au/search/label/lithium%20ion%20batteries">lithium ion batteries</a> or <a href="http://peakenergy.blogspot.com.au/search/label/flow%20battery">flow batteries</a> - however further cost reductions are viewed as being necessary to enable wider availability of energy storage services.
<p>
One option receiving a lot of attention recently has been a proposal by MIT Professor Donald Sadoway to build <a href="http://peakenergy.blogspot.com.au/2013/07/the-missing-link-to-100-renewable.html">liquid metal batteries</a>.
<p><p>
<h2>Adopting alternatives to oil</h2>
<p>
<p>
While it is clear that we can replace all the energy we currently get from fossil fuels with renewable energy, the problem remains that electricity is not a direct substitute for liquid fuels - and that fossil fuels have some other important uses other than providing energy.
<p>
<b>Transport</b>
<p>
The most important use of liquid fuels is in transport. Increasing fuel efficiency of vehicles (around 3% per year) and substitution of natural gas for oil as a fuel for heavy vehicles has been <a href="http://www.economist.com/news/briefing/21582522-day-huge-integrated-international-oil-company-drawing">constraining the growth</a> of oil consumption for road transport in recent years, however this can only ever be a temporary solution - in the longer term we need to use either electricity .
<p>
Electrifying as much of the transport system as possible is the first step, with biofuels being used for those forms of transport that cannot be electrified (either liquid biofuel such as ethanol or biodiesel, or compressed biogas) such as large planes and ships.
<p>
Hybrid electric vehicles (including <a href="http://www.technologyreview.com/view/517936/why-bmws-i3-electric-car-is-really-a-plug-in-hybrid/">plug in hybrids</a> and <a href="http://reneweconomy.com.au/2013/unsw-unveils-the-future-a-solar-hybrid-electric-vehicle-41102">solar hybrids</a>) are a maturing technology with over <a href="http://www.treehugger.com/cars/toyota-prius-hybrid-reaches-3-million-units-sold-worldwide.html">5 million</a> vehicles on the roads now.
<p>
These are providing the stepping stone to fully <a href="http://peakenergy.blogspot.com.au/search/label/electric%20vehicles">electric vehicles</a> (which are already <a href="http://reneweconomy.com.au/2013/100-electric-cars-outselling-plug-in-hybrid-electric-cars-in-us-2013">outselling</a> plug in hybrids in the US). The journey towards fully electric cars has been a slow one with the star example so far being <a href="http://peakenergy.blogspot.com.au/search/label/tesla">Tesla Motors</a> (other promising projects such as <a href="http://peakenergy.blogspot.com.au/search/label/better%20place">Better Place</a> have fallen by the wayside in recent years, though manufacturers such as Nissan are competing at the lower end of the market and a raft of car makers are building <a href="http://www.abb.com/cawp/seitp202/9eb9d7ffad753a5fc12579ba0039652a.aspx">high end electric</a> sports cars.
<p>
<div align="center"><a href="http://www.flickr.com/photos/17425845"><img src="http://farm8.staticflickr.com/7315/9267528232_1861391b18.jpg"/></a></div>
<p>
Three problems are holding up the transition to electric vehicles at this point - slow recharge times, "range anxiety" and the relatively high cost of electric vehicles compared to legacy internal combustion engine based vehicles. Tesla are looking to address both of the first two issues by <a href="http://peakenergy.blogspot.com.au/2013/08/forget-battery-swapping-tesla-aims-to.html">pursuing both</a> fast recharge technology (with various other schemes being implemented <a href="http://peakenergy.blogspot.com.au/2013/07/netherlands-to-build-worlds-largest.html">around the globe</a>) and a battery swap system similar to that pursued by Better Place.
<p>
The IEA has set a target of <a href="http://reneweconomy.com.au/2013/20-million-by-2020-can-ev-sales-help-deliver-2c-climate-target-56889">20 million</a> electric vehicles by 2020, with further 50% increase in battery performance a key to achieving this goal, following on the 50% increase achieved in the past 3 years.
<p>
Cars aren't the only type of vehicle that requires fuel of course - heavier forms of of transport also consume oil. We are now starting to see <a href="http://peakenergy.blogspot.com.au/search/label/electric%20trucks">electric trucks</a>, <a href="http://peakenergy.blogspot.com.au/search/label/electric%20buses">electric buses</a> and <a href="http://peakenergy.blogspot.com.au/search/label/electric%20boats">electric boats</a> begin to appear out in the marketplace. Where heavy vehicles such as buses follow the same route on a regular basis they become candidates for <a href="http://peakenergy.blogspot.com.au/2013/08/wireless-charging-of-electric-vehicles.html">recharging while in transit</a>.
<p>
<div align="center"><a href="http://www.flickr.com/photos/54450095"><img src="http://farm8.staticflickr.com/7095/7169063338_182b96e117.jpg"/></a></div>
<p>
Of course, we don't have to simply substitute electric vehicles for existing liquid fuel powered ones. There is a wide range of alternatives available including:
<p>
<ul>
<li><a href="http://www.worldchanging.com/archives/009047.html">Walkable communities</a></li>
<li>Cycling. Many journeys do not need to be made by car, particularly if cities are designed to enable transport by cycle (both by pedal powered bicycles and <a href="http://anz.theoildrum.com/node/3302">electric bikes</a>) as well as by foot or rail transit.</li>
<li><a href="http://en.wikipedia.org/wiki/Transit-oriented_development">Transit oriented development</a></li>
<li>Rail transport. Rail transport can be <a href="http://www.theoildrum.com/node/7078">electrified</a> where it isn't already and can provide both transit within cities and long distance travel as well (preferably via a high speed rail network)</li>
<li>Exotic options such as <a href="http://en.wikipedia.org/wiki/Personal_rapid_transit">Personal rapid transit</a> and Elon Musk's proposed <a href="http://peakenergy.blogspot.com.au/2013/08/elon-musk-unveils-his-plans-for.html">Hyperloop</a></li>
</ul>
<p>
<b>Bioplastic</b>
<p>
Nearly all the plastics sold today come from petroleum, accounting for up to 5% of global petroleum consumption by some estimates. Recycled plastics are a good first step towards reducing oil consumption, however they can only be recycled two to four times, and only around 25% of plastics are actually recycled.
<p>
The sustainable alternative to traditional plastic is <a href="http://peakenergy.blogspot.com.au/search/label/bioplastic">bioplastic</a>. The cost of producing bioplastic has been falling thanks to improved processes, requiring lower temperatures. Combining this with the increasing cost of crude oil has made bioplastic prices competitive with regular plastics.
<p>
Bioplastic production is expected to reach <a href="http://www.bio-plastics.org/en/information--knowledge-a-market-know-how/basics/the-bioplastics-market-an-overview">1 million tons</a> in 2015, out of total global plastics production of around <a href="http://www.plasticseurope.org/information-centre/press-room-1351/press-releases-2012/first-estimates-suggest-around-4-increase-in-plastics-global-production-from-2010.aspx">300 million</a> tons.
<p>
Leading manufacturers include <a href="http://www.packagingeurope.com/Packaging-Europe-News/54492/Avantium-Wins-2013-Innovation-in-Bioplastics-Award.html">Avantium</a>, BASF, <a href="http://www.icis.com/Articles/2012/07/02/9573828/bioplastics+surge+towards+commercialization.html">Braskem</a>, Cereplast, <a href="http://www.technologyreview.com/demo/515486/plastic-from-grass/">Metabolix</a> and <a href="http://www.nationmultimedia.com/life/Natural-selection-30211571.html">Natureworks</a>. Bioplastic feedstocks include vegetable oil, corn starch, plant cellulose and <a href="http://peakenergy.blogspot.com.au/2011/04/are-mushrooms-new-plastic.html">mycellium</a>.
<p>
Bioplastic doesn't necessarily need to replace all current uses of plastic - other alternatives are materials that have been replaced by plastics in recent decades, including steel, wood, aluminum, glass, cardboard and paper.
<p>
<p>
<b>Agriculture</b>
<p>
Agriculture obviously requires transport to grow and distribute food products, however it also requires fertiliser (at least if we continue to follow the <a href="http://peakenergy.blogspot.com/2009/09/norman-borlaug-saint-or-sinner.html">green revolution</a> model), which is usually produced using natural gas.
<p>
This can be addressed via a range of techniques - by being more efficient with fertiliser use (which would have many environmental and health benefits), by adopting organic farming techniques, by growing food <a href="http://peakenergy.blogspot.com/2008/12/guerilla-gardening-eating-suburbs.html">near where we live</a>, by generating ammonia using <a href="http://peakoildebunked.blogspot.com.au/2007/11/314-peak-oil-and-fertilizer-no-problem.html">air, water and renewable energy</a> - or by getting to the root of the problem and enabling plants to <a href="http://peakenergy.blogspot.com.au/2013/07/world-changing-technology-enables-crops.html">fix nitrogen themselves</a>.
<p>
Another way of reducing energy consumption from agriculture is to find new ways of producing food - efforts to produce <a href="http://peakenergy.blogspot.com.au/search/label/artificial%20meat">artificial meat</a> (or "cultured beef", as it is sometimes known) have the potential to <a href="http://www.economist.com/blogs/babbage/2013/08/praise-artificial-meat">reduce the amount of energy</a> required to produce meat by 45%.
<p>
<div align="center"><a href="http://dotearth.blogs.nytimes.com/2013/08/05/bring-on-the-frankenburger/?_r=1"><img src="http://graphics8.nytimes.com/images/2013/08/05/blogs/dotmeat/dotmeat-blog480.jpg"/></a></div>
<p><p>
<b>Manufacturing and Construction</b>
<p>
Manufacturing is a major consumer of energy and raw materials. The amount of energy and other raw materials devoted to manufacturing can be reduced by optimising for recycling - in particular by adopting "<a href="http://peakenergy.blogspot.com.au/search/label/cradle%20to%20cradle">cradle to cradle</a>" design and manufacturing techniques.
<p>
<a href="http://peakenergy.blogspot.com.au/search/label/distributed%20manufacturing">Distributed manufacturing</a> and <a href="http://peakenergy.blogspot.com.au/search/label/3d%20printing">3D printing</a> also have potential for reducing the amount of energy required to distribute manufactured goods.
<p>
The construction and ongoing operation of buildings is another major consumer of energy, with "<a href="http://peakenergy.blogspot.com.au/search/label/green%20buildings">green buildings</a>" and energy efficient devices such as <a href="http://peakenergy.blogspot.com.au/search/label/led%20lighting">LED lighting</a> that minimise energy consumption being an important part of our clean energy future.
<p>
<p>
<h2>Conclusion</h2>
<p>
The aim of this post was to demonstrate the following (or at least provide food for thought to irredeemable skeptics) - I hope you've found it thought provoking.
<p>
<ul>
<li>There is more than enough renewable energy available to meet all our needs - primarily using solar and wind power - and this can be done at a reasonable cost</li>
<li>The keys to shifting to renewable energy are to expand the interconnectedness of our electricity grids, to make electricity demand more dynamic (responding to changes in electricity supply / price) and to put more energy storage in place</li>
<li>That we need to be aware of the areas where we use fossil fuels and transform these to use renewable energy - to electrify our transport systems, to adopt alternatives to traditional plastics and to adapt our agricultural, manufacturing and construction processes to reduce the amount of energy required and to eliminate dependencies on fossil fuels</li>
</ul>Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-50759099291971013212013-08-11T23:09:00.001+10:002013-08-11T23:09:44.550+10:00A Farewell To The Oil DrumWhile TOD is shutting down TOD ANZ isn't necessarily following suit (although it is admittedly very dormant at this point). The post below is reposted from <a href="http://peakenergy.blogspot.com.au/2013/08/a-farewell-to-oil-drum.html">Peak Energy</a> and will (hopefully) soon appear at TOD.
I started blogging (at <a href="peakenergy.blogspot.com">Peak Energy</a>) about peak oil in late 2004, having become interested in the topic over a period of years. I'd first started thinking about oil depletion when working on systems for collecting and managing large volumes of oil exploration data in the mid 1990's. Not long afterward I worked for Woodside Energy at a time when their main development project was the Laminaria / Corallina floating oil production facility in the Timor sea. A few years later production from this project had dropped below 50,000 barrels per day from an early peak of 180,000 bpd. Around the same time I came across the writing of <a href="http://www.amazon.com/The-Coming-Oil-Crisis-Campbell/dp/0906522110/crocodiletech-20">Colin Campbell</a> and <a href="http://www.amazon.com/Hubberts-Peak-Impending-World-Shortage/dp/0691141193/crocodiletech-20">Ken Deffeyes</a> and began to consider what the global oil depletion picture looked like (the war in <a href="http://peakenergy.blogspot.com/2008/11/iraqs-oil-greatest-prize-of-all.html">Iraq</a> and the steadily rising oil price also added to the interest factor).
<p>
2004 was the year where blogging exploded in popularity and a vast range of writers emerged from obscurity. A number of these began mentioning peak oil and a loosely knit community of bloggers quickly formed around the topic. At the time the traditional observers of the topic were mostly retired geologists from the oil industry and academia following in the footsteps of M King Hubbert (such as Jean Laherrerre, Walter Youngquist and Ali Samsam Bakhtiari as well as Campbell and Deffeyes), along with some writers such as Richard Heinberg and a vibrant (albeit wildly pessimistic) online community of neo-malthusians hanging out at forums such as the "Running On Empty" groups, "Energy Resources" and "Alas Babylon" - usually heavily influenced by Jay Hanson's infamous "dieoff.org" site - and various fringe websites like Mike Ruppert's "From The Wilderness" and Mark Robinowicz's "Oil Empire". There were also 2 news aggregation sites focusing on the topic that had started up - Energy Bulletin (now Resilience.org) and PeakOil.com - both of which assembled a steady stream of news on peak oil and related topics.
<p>
In 2005 The Oil Drum appeared, with Prof Goose (Kyle) and Heading Out (Dave) quickly building a large following that eclipsed that of the other sites commenting on the subject. I was pleased to be invited to join as a contributor in 2007 and spent a very enjoyable 3+ years writing for the site on a regular basis and co-editing the TOD ANZ site with Phil Hart.
<p>
After a time I found a combination of factors led me to become less active and eventually stop writing original work for TOD - in no particular order a couple of changes of job, moving house twice, getting divorced, having a couple of kids who required more of my time and a general depletion of interest caused by writing on the same broad topic for more than 5 years.
<p>
It has been disappointing to see some of the commentary about <a href="http://peakenergy.blogspot.com.au/search/label/the%20oil%20drum">TOD's closure</a> claiming that it indicates "fracking has killed peak oil". Personally I've been amazed TOD has lasted as long as it has, which has been a credit to the editors and staff, especially with so many contributors drifting away over the years.
<p>
If I look back to when I first started, none of the peak oil blogs around at the time are still publishing - the ones that come immediately to mind include Past Peak, Mobjectivist, Peak Energy (US), The Energy Blog, Jeff Vail's A Theory Of Power, Peak Oil Optimist, Life After The Oil Crash, Karavans and a myriad of temporary blogs created by a guy calling himself the "Flying Talking Donkey" - all of which ceased for the reasons cited by the TOD board (or due to ill health on the part of the author). This isn't a phenomenon unique to peak oil blogs - none of my favourite blogs from 2004 still exist today - the best sustainability blog of the time, WorldChanging, closed down several years ago, Bruce Sterling's "Viridian Design" did the same as did Billmon's "Whiskey Bar" and Jeff Well's "Rigorous Intuition".
<p>
So from that point of view TOD has done remarkably well to have lasted for more than 8 years.
<p>
The decision to narrow the focus of the site some years back didn't help in my view but I suspect the end result would have been the same regardless - though I tend to think allowing all of the "<a href="http://peakenergy.blogspot.com/2008/02/limits-to-scenario-planning.html">Limits To Growth</a>" to be analysed may have kept the energy levels of the contributors up for longer and perhaps encouraged a wider range of contributors to participate.
<p>
It is true, however, that global oil production has not declined in the way that many (if not all) of the peak oil writers of 10 years ago predicted. While the predictions can be qualified ("conventional oil production has peaked" or "oil production <a href="http://peakenergy.blogspot.com/2010/03/peak-oil-and-tea-party-movement.html">per capita</a> has <a href="http://peakenergy.blogspot.com.au/2013/07/peak-oil-what-peak-oil.html">peaked</a>") the "total liquids" number clearly hasn't yet and this is the important one along with the oil price.
<p>
There are 4 obvious avenues open for dealing with peaking conventional oil production:
<p>
<ul>
<li>1. Find more conventional oil</li>
<li>2. Exploit unconventional oil sources</li>
<li>3. Become more efficient in our use of oil</li>
<li>4. Switch to alternatives</li>
</ul>
<p>
Over the years a lot of peak oil analysis has tended to focus on how far the first item can be pushed and what could happen once the limit is reached, with short shrift being given to the other 3 avenues (unless "powerdown" counts as "more efficient use of oil") - and even the amount of conventional oil available being somewhat underestimated (<a href="http://peakenergy.blogspot.com/2008/11/iraqs-oil-greatest-prize-of-all.html">Iraq</a> being the example I always used).
<p>
The ability of the oil industry to expand unconventional oil production (the <a href="http://peakenergy.blogspot.com.au/search/label/shale%20oil">shale oil</a> boom being the obvious example though production of tar sands and heavy oil deposits are also increasing) has been the key factor in pushing the date of the peak out further into the future (I liked Stuart Staniford's quip that this could possibly be characterised as the "frantic scraping of the bottom of the barrel").
<p>
The dawning of the "<a href="http://peakenergy.blogspot.com/2011/06/floating-lng-final-frontier-of-gas-age.html">gas age</a>" has also kept fossil fuels in the picture for time being, with substantial unexploited conventional natural gas reserves being developed and unconventional gas production growing strongly.
<p>
While these developments have thus far dashed the hopes of the doomer community the fact remains that even if the whole world was made of oil, there would still be a finite supply of it - and thus at some point we will need to transition to alternative sources of energy, assuming the temperature of the planet hasn't risen to a point that makes it uninhabitable in the meantime.
<p>
It's this transition to alternative energy which captured most of my attention when writing - and which I'll make the topic of my second parting post for TOD - "Our Clean Energy Future" - which I hope to have ready soon.Big Gavhttp://www.blogger.com/profile/00682404837426502876noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-66538657374705958302013-02-18T05:23:00.001+11:002013-02-18T05:41:08.838+11:00Sinogetically stuffing the basins?Pulling a few strands months apart together, is there a link between Paul Sheehans story (below) about how the expansion of Coal Seam Gas production is going to impact water availability for downstream food producers with last years agreement to sell Cubbie station to a Chinese consortium (now completed).<br />
<br />
<blockquote>
<b><a href="http://www.smh.com.au/opinion/politics/well-reap-what-we-deserve-20130217-2el38.html">We'll reap what we deserve</a></b><br />
Paul Sheehan, SMH<br />
<br />
Consider this remarkable statistic: according to the maps published by the Queensland Murray-Darling Basin Authority, the area covered by mining leases in Queensland's Murray-Darling catchment area is now 40 per cent.</blockquote>
<blockquote>
Think about that. Mining is water intensive. It consumes as much water as agriculture. It is going to be impossible for extensive new mining operations in Queensland not to impinge on the production of food downstream.<br />
<br />
Last week, the Federal Minister for the Environment, Tony Burke, granted approval to expand coal seam gas projects in NSW that represent a potential 500 per cent increase in the state's coal seam gas production.<br />
<br />
Last month, Cubbie Station, the vast cotton-producing and water-diverting farm operation in the head of the Murray-Darling catchment area in southern Queensland, was sold to a Chinese-led consortium for $240 million.<br />
<br />
This was a golden opportunity missed. According to the CSIRO, the cotton industry uses about 1600 litres of water to generate $1 of output. During a 12-year drought, in 2009, Cubbie went into voluntary administration with a debt of $320 million.</blockquote>
<br />
Well, how much water are we talking about here? The ABC has the numbers.<br />
<br />
<blockquote>
<a href="http://www.abc.net.au/news/specials/coal-seam-gas-by-the-numbers/"><b>How much water will the CSG industry use?</b></a><br />
Jun 28, 2012<br />
<br />
Australia's Great Artesian Basin and its underground aquifers are a vital source of water; farmers and other bore users are given allocations for their use.<br />
<br />
By 2014, the Commonwealth will have spent nearly $150 million under the Great Artesian Basin Sustainability Initiative, capping bores and fixing pipes to conserve water.<br />
<br />
The coal seam gas industry is entitled to remove massive amounts of water from groundwater systems.<br />
<br />
The Queensland Government says that if CSG mining causes groundwater levels to drop below specified "trigger" points then companies must "make good" to affected water users. The trigger points are:<br />
<br />
<blockquote class="tr_bq">
a five-metre drop in bore-water levels for sandstone and fractured rock aquifers;<br />
a two-metre drop in bore-water levels for alluvial aquifers; and<br />
a 20-centimetre drop in the water table surrounding springs.</blockquote>
<br />
While the Queensland Government has set out the <i><b>make-good arrangements</b></i>, there is concern over how these will actually work in practice.<br />
<br />
There is a fierce debate about the amount of water the coal seam gas industry will extract from underground, and what impact it may have on the sustainability of the Great Artesian Basin.<br />
<br />
The industry suggests it will pull out somewhere between 126 gigalitres and <i><b>280 gigalitres</b></i> a year, while the National Water Commission puts the figure above <i><b>300 gigalitres</b></i> a year.</blockquote>
<blockquote>
Others, including the Water Group advising the Federal Government, suggest it is higher still.</blockquote>
<br />
Which by a happy coincidence is about the same amount as the combined tradable water entitlement of <a href="http://en.wikipedia.org/wiki/Cubbie_Station">Cubbie Station</a><br />
<br />
Should the CSG bound for China stuff up the Great Artesian Basin, the new<strike> imperial overlords</strike> owners of Cubbie Station are free to sell (or lease) their water to whomever they so choose. The presence of other large <a href="http://www.theaustralian.com.au/business/mining-energy/chinese-poised-to-acquire-westside/story-e6frg9df-1226539974477">Chinese</a> <a href="http://www.morningwhistle.com/html/2012/IPOs_Offerings_0802/213342.html">interests </a>in the area that might be interested in tradable water rights is purely coincidental.<br />
<br />
OF course water from Cubbie would never be pumped back upstream in the "unforseen" event that farmers could not use Great Artesian Basin water - which is no ones fault - not even the<strike> imperial over</strike> owners of Cubbie. What affected farmers upstream could receive is the right to have the water.<br />
<br />
Just speculation of course, but I'm reminded of<a href="http://bytesdaily.blogspot.com/2011/05/people-russ-hinze.html"> Russ Hinzes convergence of interests</a>.<br />
<br />
<br />SPhttp://www.blogger.com/profile/12467929366702367892noreply@blogger.com1tag:blogger.com,1999:blog-7263129089232513980.post-37793526127936541722012-12-31T14:46:00.000+11:002012-12-31T14:52:05.462+11:00New Zealand’s double dealing and special pleading over the second Kyoto Protocol period: part the second<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiul8hrdjNLPm__86O_ei5VqkTRZkDJBKImVnAUxEU6oPU6JQ77SHw3p7nvaze-4J34eujHIlyleO7cXw8Z1qBcUrW_iWNzr7pp3QlcnSYLGyvwe5IVs8VuYKFJDFShMIIqYZARb6uV1PU/s1600/BloombergNZU-chart-21-12-2012.png" imageanchor="1" style="clear:left; float:left;margin-right:1em; margin-bottom:1em"><img border="0" height="170" width="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiul8hrdjNLPm__86O_ei5VqkTRZkDJBKImVnAUxEU6oPU6JQ77SHw3p7nvaze-4J34eujHIlyleO7cXw8Z1qBcUrW_iWNzr7pp3QlcnSYLGyvwe5IVs8VuYKFJDFShMIIqYZARb6uV1PU/s200/BloombergNZU-chart-21-12-2012.png" /></a></div>
<p><i>As the New Zealand Government decided not to join a second commitment period of the Kyoto Protocol, today is the last day New Zealand has an <a href="http://www.radionz.co.nz/news/political/124591/minister-confident-nz-will-cut-emissions">international greenhouse gas obligation</a>. To mark the end of the Kyoto first commitment period, <a href="http://rwmjohnson.blogspot.co.nz/2012/12/new-zealands-double-dealing-and-special_20.html">Robin Johnson's Economics Web Page</a> provides the second of two posts on New Zealand's Kyoto opt-out.</i></p>
<p>Is New Zealand's Minister for Climate Change Issues Tim Groser a Kyoto pariah? Or a Kyoto visonary? A global emissions reduction emissary or is he tar-sanded with a Canadian brush? I once more try to make sense of New Zealand's double dealing and special pleading over the Kyoto Protocol second commitment period and the Doha hooha. This time with the aid of the man himself. Tim Groser has written an <a href="http://www.nzherald.co.nz/climate-change/news/article.cfm?c_id=26&objectid=10855149">opinion editorial</a> in the New Zealand Herald.</i></p>
<p>Tim Groser, New Zealand's most forthright Minister for Climate Changes, has a <a href="http://www.nzherald.co.nz/climate-change/news/article.cfm?c_id=26&objectid=10855149">shocker of an Op Ed</a> in the New Zealand Herald.<p>
<p>When I first read it, I wrote down my responses to what seemed the most misleading claims. The headline shocker is that either Tim Groser is so out of touch with his portfolio that he has no idea what the current price of carbon in New Zealand, or he is so incompetent that he can't tell US dollars from NZ dollars.</p>
<p>But there are shockers for all of us. I present Groser's quotes in italics and in indented blockquote format, followed by my response in plain text and no indents.</p>
<blockquote>TG: <i>"It's time to move past Kyoto agreement"</i></blockquote>
<p>Canada o Canada. Groser is channelling Canadian Minister of Environment <a href="http://www.cbc.ca/news/politics/story/2011/12/12/pol-kent-kyoto-pullout.html">Peter Kent</a> "Kyoto for Canada is in the past."</p>
<blockquote>TG: <i>"The unrelenting emphasis (on Kyoto) has sucked energy out of debate, diverting attention from the real problem."</i></blockquote>
<p>This is a classic PR spin tactic of diversion. Groser wishes to divert attention towards the USA, China and India and away from New Zealand's double dealing.</p>
<blockquote>TG <i>"The science, as I interpret it, remains pretty clear"</i></blockquote>
<p>Yes, Tim Groser does not deny the science, it's just that National and Mr Groser have no intention acting domestically in any way consistent with the science. Perhaps that makes him a 'policy denier'<p>
<blockquote>TG <i>"The international community needs to develop a more robust approach involving far more of the major emitting countries. Whatever New Zealand does will be completely irrelevant unless the major emitters participate."</i></blockquote>
<p>Canada o Canada "We support a new international climate change agreement that includes commitments from all major emitters. That is the only way we are going to achieve real reductions and real results" <a href="http://www.cbc.ca/news/world/story/2011/12/07/kent-speech-un.html">Canadian Minister of Environment Peter Kent</a>.</p>
<blockquote>TG <i>"some of the confusion has been deliberate"</i></blockquote>
<p>Ah the old fifth column within, the extreme green economic traitors, those awkward truth telling ecologists like Mike Joy, Ha I can just find some with other opinions.</p>
<blockquote>TG <i>"First, the ETS has not been "gutted" by the changes passed recently in Parliament"</i></blockquote>
<p>No, because the NZETS was "gutless" from day 1, as it has no cap, and it always allowed <a href="http://hot-topic.co.nz/nz-ets-you-are-the-weakest-international-link/">unlimited importing</a> of international units. In 2012, National did defer indefinitely agriculture's entry and extend indefinitely the provisions for half-price emissions for emitters (2-for-1 deal).</p>
<blockquote>TG <i>"No New Zealander - no household, no company - has to pay more, or subsidise anyone because of this decision"</i>
</blockquote>
<p>Except <a href="http://hot-topic.co.nz/rio-tinto-alcan-nz-plays-godfather-nice-aluminium-smelter-you-got-be-a-shame-if-something-happened-to-it/">New Zealand Aluminium Smelters Limited</a> and <a href="http://hot-topic.co.nz/norwegian-wood-this-exporter-has-flown/">Norske-Skog Tasman</a>.</p>
<blockquote>TG <i>"Our top priority is to strengthen the recovery in extremely difficult international economic times."</i></blockquote>
<p>That really means Groser's top priority always was to have an emissions trading scheme with a more-or-less zero carbon price.</p>
<blockquote>TG <i>"the (NZETS) legislation was, in effect a , a one-way bet taken on the last day of the Labour Government's life in 2008 that the 2009 Copenhagen Summit would deliver a 'single, comprehensive and ratifiable climate change agreement' (the political mantra of the day)."</i></blockquote>
<p>That statement is a totally revisionist Chairman Mao-like rewrite of history to suit a political agenda. The staggered entry of sectors dates back to Helen Clark's MOU with agriculture signed after the Belch Tax debacle. It also reflects political lobbying by Business NZ and the need to find votes of support from Peter Dunne to get the legislation passed.</p>
<blockquote>TG <i>"We no longer have to pass amending legislation to avoid an automatic ramping up of the scheme, irrespective of either economic conditions or international progress."</i></blockquote>
<p>By saying this Groser lets us know that for National the delayed entry dates and the apparent all-sectors design were a <a href="http://en.wikipedia.org/wiki/Potemkin_village">"Potemkin village"</a>. National never had any intention of bringing agriculture into the NZETS.</p>
<blockquote>TG <i>"At current low international carbon prices - they move around but they are clustered around $5 - there is indeed little petrol in the ETS tank. But that is exactly the way it was designed - to be aligned to world prices, whatever world prices are, up to a cap"</i></blockquote>
<p>To me this is so gobsmacking it's...Hekia Parata. Groser has no idea what the current NZ carbon price is! Groser can't even read the price of a New Zealand unit (NZU) off the <a href="http://www.bloomberg.com/quote/NZUSSPOT:IND">Bloomberg website</a> without confusing US dollars and NZ dollars. What an idiot!</p>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2anN9B3kL1hIfdeLmUXBUen6wbWz7hPFdTNo7ZYqpdeg2dK7X84NANKFHC6vvk548cZbkSDjeEwDi0caeEEB_ewCFmabubSKWgcKMQRKv2XeWhGn57DRsHFr4YoygTLCMmgn-8B6xdLc/s1600/BloombergNZU-chart1-20-12-2012.png" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="302" width="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2anN9B3kL1hIfdeLmUXBUen6wbWz7hPFdTNo7ZYqpdeg2dK7X84NANKFHC6vvk548cZbkSDjeEwDi0caeEEB_ewCFmabubSKWgcKMQRKv2XeWhGn57DRsHFr4YoygTLCMmgn-8B6xdLc/s400/BloombergNZU-chart1-20-12-2012.png" /></a><p>Here is the chart Groser can't read</p></div>
<p>The NZU price is NOT "around $5" Its around <a href="https://www.commtrade.co.nz/">$NZ2.50/tonne</a></p>
<p>So Tim Groser says the NZETS is designed to import the international carbon price and thats a good thing. If it is so good being wedded to international prices, why has he taken us out of the Kyoto Protocol second commitment period?</p>
<blockquote>TG <i>"The domestic political debate has confused the structure of the policy with the international drivers of the carbon price."</i></blockquote>
<p>Thats just adding insult to financial injury to the Kyoto forestry sector where some have has lost <a href="http://www.stuff.co.nz/nelson-mail/features/primary-focus/7973648/Carbon-benefits-going-up-in-smoke">80% of the value of the post-1989 Kyoto forests</a>. It's a double blow, as the Government is keeping forestry removal units (earned for the same forests) to itself to fudge the Kyoto net position.</p>
<blockquote>TG <i>"watch what happens to the carbon price when the international recession is over and the EU moves to strengthen carbon markets and, hopefully, more countries start adopting carbon policies. You will then hear, no doubt, the exact opposite of the current political debate. Foresters will be happier as the carbon they sequester becomes more valuable (paper profits unless they sell them) and emitters will be less happy as they pay a higher carbon price."</i>
</blockquote>
<p>Thanks for lecture on prices, Tim. By the time the Eurozone has dealt with the over-allocation their carbon markets, and if they ever do, it will be way past 2015 or 2016, and New Zealand won't even be in Kyoto's second commitment period and Tim Groser will probably have canned the NZETS by then anyway!</p>
<blockquote>TG <i>"NZ continues to make remarkable progress in increasing the share of our electricity coming from renewable energy - it is 77 per cent and climbing."</i></blockquote>
<p>Tim Groser is taking credit for past Ministry of Works hydro projects. Does he really think the public are so stupid as to see that argument as in any way relevant to climate change mitigation? Meanwhile the younger generation are calling for the <a href="http://powershift.org.nz/">power shift</a> to 100% renewable electricity. How long until Groser calls them 'extreme greens'?</p>
<blockquote>TG <i>"So is this a great time to put new costs on our major exporting industry when we have a huge need to increase our exports?"</i>
</blockquote>
<p>I could say how else could a carbon price work if it is not a real cost? How can any NZ carbon price policy be effective if half the economy is out? This is Groser's and National's real policy bottom-line. Exports uber alles! Exports above all else! National truly and obviously have no intention of pricing New Zealand's domestic greenhouse gas emissions.</p>
<blockquote>TG <i>"Our agriculture sector is, by and large, the most carbon efficient agriculture sector in the world."</i></blockquote>
<p>Thats very <a href="http://www.interest.co.nz/rural-news/61747/bruce-wills-points-out-double-standard-those-wanting-protect-manufacturing-jobs-whi">Bruce Wills</a> of him. So agriculture will be fine with a no-exceptions emissions trading scheme or carbon tax.</p>
<blockquote>TG <i>"This is the Global Research Alliance on Greenhouse Gas Emissions, which we lead."</i></blockquote>
<p>Great but what pays for it? Thats right, taxpayers. So that's a subsidy, then. Having agriculture in the emissions trading scheme would help pay for it.</p>
<blockquote>TG <i>"A few days ago we joined another international initiative on climate change - the Climate and Clean Air Coalition"</i></blockquote>
<p>Great! so now we mitigate climate change by friending someone's Facebook page. I think I will let <a href="http://www.pnas.org/content/107/26/11721.full">William Nordhaus</a> know he doesn't need to run carbon pricing on the DICE global model anymore as it's all on Facebook.</p>
<blockquote>TG <i>"It is time to move beyond Kyoto and find a solution that can have a real environmental impact."</i></blockquote>
<p>Canada o Canada. "Kyoto for Canada is in the past..","Copenhagen and Cancun agreements, which were negotiated in 2009 and 2010 as the world stared down the end of Kyoto, are the future." <a href="http://www.cbc.ca/news/politics/story/2011/12/12/pol-kent-kyoto-pullout.html">Peter Kent, Canadian Minister of Environment</a>.</p>
<blockquote>TG <i>"We are on track to meet or exceed our Kyoto commitment to 2012."</i></blockquote>
<p>Only because of the <a href="http://hot-topic.co.nz/introducing-the-kyoto-escalator-did-anyone-sign-the-protocol-in-good-faith/">"Kyoto escalator"</a> of the gross 1990 baseline for the net target forest fudge.</p>
<p>From 1990 to 2010, New Zealand's gross emissions grew by 20%, from 60 million tonnes (mt) to 72mt. Net emissions grew by 59% (from 32mt to to 52mt (data <a href="http://www.mfe.govt.nz/publications/climate/greenhouse-gas-inventory-2012/">New Zealand's Greenhouse Gas Inventory 1990-2010</a>) So both gross and net greenhouse gas time series show a relentless upward trend.</p>
So for my conclusion, I might just recycle some from a previous post. But with one difference.
<ol><li>When we hear Tim Groser talking of focusing on a global climate solution that involves 86% of the emitters that can have a real environmental impact, we now know he is just recycling speech notes from Canadian Minister Peter Kent and diverting attention from New Zealand's policy shambles.</li>
<li>Tim Groser and National have absolutely no intention doing anything domestically to reduce emissions of greenhouse gases.</li>
<li>Tim Groser and National also have absolutely no intention of imposing any real carbon price on New Zealand's industrial and agricultural emitters.</li>
</ol>Robin Johnson's Economics Web Pagehttp://www.blogger.com/profile/12924305800986441792noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-60591826843157275412012-12-31T14:40:00.001+11:002012-12-31T14:51:50.281+11:00New Zealand’s double dealing and special pleading over the second Kyoto period: part the first<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhK-13s5bOjWERnw77j0ZtrpVYTuKFQmu746GOqaJqqI9emNhn2PcfoRfp3ELExVWX2tMNOCgqtzw48dAgK_vce08nukcVzD8r1YiGZFaG2-R-ozNqOOQlP25KzTVb96mFDh34qWpKbDaM/s1600/pce2020fail.png" imageanchor="1" style="clear:left; float:left;margin-right:1em; margin-bottom:1em"><img border="0" height="143" width="170" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhK-13s5bOjWERnw77j0ZtrpVYTuKFQmu746GOqaJqqI9emNhn2PcfoRfp3ELExVWX2tMNOCgqtzw48dAgK_vce08nukcVzD8r1YiGZFaG2-R-ozNqOOQlP25KzTVb96mFDh34qWpKbDaM/s400/pce2020fail.png" /></a></div><p><i>As the New Zealand Government decided not to join a second commitment period of the Kyoto Protocol, today, the 31st of December 2012 is the last day New Zealand has an <a href="http://www.radionz.co.nz/news/political/124591/minister-confident-nz-will-cut-emissions">international greenhouse gas obligation</a>. To mark the end of the Kyoto first commitment period, <a href="http://rwmjohnson.blogspot.co.nz/2012/12/new-zealands-double-dealing-and-special.html">Robin Johnson's Economics Web Page</a> provides the first of two posts on New Zealand's Kyoto opt-out.</i></p>
<p>Is New Zealand Climate Change Minister Tim Groser a Kyoto pariah? Or a Kyoto visonary? Is he a global emissions reduction emissary or is he tar-sanded with a Canadian brush? I try to make sense of New Zealand's double dealing and special pleading over the Kyoto Protocol second commitment period and the Doha climate change talks hoo-ha.</p>
<p>I am very confused about New Zealand's climate change policy since the <a href="http://en.wikipedia.org/wiki/Cop18">Doha international climate change talks (COP18)</a> and New Zealand <a href="http://beehive.govt.nz/release/new-zealand-commits-un-framework-convention">opting out of a second period</a> of the Kyoto Protocol back on 9 November 2012.</p>
<p>The Kyoto part two opt-out is described as <a href="http://www.nzherald.co.nz/climate-change/news/article.cfm?c_id=26&objectid=10853132">a lose-lose decision</a> that shuts New Zealand out of the <a href="http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10852998">Kyoto international carbon markets</a> and is a <a href="http://www.nzherald.co.nz/climate-change/news/article.cfm?c_id=26&objectid=10853626">shambles and a disgrace</a>.</p>
<p>So I have a question for all readers.</p>
<p>If New Zealand Minister of Climate Change Tim Groser is serious about <a href="http://www.mfe.govt.nz/issues/climate/emissions-target-2020/index.html">New Zealand's 2020 greenhouse gas target</a>, why would he forego formally lodging the 2020 target into the existing Kyoto Protocol framework (where the national institutions and arrangements are already up and running), in favour of <a href="http://beehive.govt.nz/release/new-zealand-commits-un-framework-convention">pledging to meet the target</a> on a voluntary basis?</p>
<p>Let me break that question down into several parts.</p>
<ol><li>Imagine you are the Minister for Climate Change in the government of a small developed nation.</li>
<li>This nation has signed an <a href="http://www.mfe.govt.nz/issues/climate/international/kyoto-protocol.html">international treaty</a> with a few other nations which states a short-term national target for emissions of greenhouse gases (GHGs).</li>
<li>This nation enacts the treaty by creating some new institutions; a <a href="http://www.eur.govt.nz/">national register</a> for emissions units, <a href="http://www.mfe.govt.nz/issues/climate/greenhouse-gas-emissions/index.html">national inventories of greenhouse gas emissions</a>, <a href="http://www.mfe.govt.nz/issues/climate/lucas/">national surveys</a> of afforestation, and a process of reporting the <a href="http://www.mfe.govt.nz/issues/climate/greenhouse-gas-emissions/net-position/index.html">predicted progress</a> towards the national target.</li>
<li>The nation has adopted several policies relying on the treaty institutions; an <a href="http://www.climatechange.govt.nz/emissions-trading-scheme/index.html">emissions trading scheme</a>, <a href="
http://www.mpi.govt.nz/forestry/funding-programmes/permanent-forest-sink-initiative">forest sink schemes</a>, <a href="http://www.livestockemissions.net/">research alliances</a>, and <a href="http://unfccc.int/kyoto_protocol/mechanisms/emissions_trading/items/2731.php">international trading</a> of emissions units.</li>
<li>The nation has a second publicly stated medium-term <a href="http://www.mfe.govt.nz/issues/climate/emissions-target-2020/index.html">target for reducing greenhouse gas emissions</a> for the years following the expiry of the first target.</li></ol>
<p>If you are serious about that second greenhouse gas emissions target, why would you pledge the target on a voluntary basis, when you could have formally lodged your target into the existing treaty (where the national institutions and arrangements already exist)?</p>
<p>Any answers? Anyone? Would you like to phone a friend?</p>
<p>Okay, here's a hint. The <a href="http://www.pce.parliament.nz">Parliamentary Commissioner for the Environment</a> has said that New Zealand is on track <a href="http://www.pce.parliament.nz/assets/Uploads/PCE-ETS-Review-2.pdf">to exceed the 1990 greenhouse gas baseline by 30%</a> rather than meet the 2020 target of reducing greenhouse gases by 10 to 20% compared to 1990.</p>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhK-13s5bOjWERnw77j0ZtrpVYTuKFQmu746GOqaJqqI9emNhn2PcfoRfp3ELExVWX2tMNOCgqtzw48dAgK_vce08nukcVzD8r1YiGZFaG2-R-ozNqOOQlP25KzTVb96mFDh34qWpKbDaM/s1600/pce2020fail.png" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="289" width="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhK-13s5bOjWERnw77j0ZtrpVYTuKFQmu746GOqaJqqI9emNhn2PcfoRfp3ELExVWX2tMNOCgqtzw48dAgK_vce08nukcVzD8r1YiGZFaG2-R-ozNqOOQlP25KzTVb96mFDh34qWpKbDaM/s400/pce2020fail.png" /></a><p>Figure 3.2 from page 18 of Parliamentary Commissioner for the Environment, <a href="http://www.pce.parliament.nz/assets/Uploads/PCE-Lignite.pdf">“Lignite and climate change: The high cost of low grade coal”</a>, December 2010. Data from MfE 2009. Fifth national communication under the United Nations Framework Convention on Climate Change, Ministry for the Environment, Wellington.
</p></div>
<p>Now just because New Zealand's net emissions are likely to consistently increase through to 2020 doesn't automatically mean New Zealand would not meet the 2020 target if translated into a Kyoto second commitment period target. We could just buy extra emissions units from the international Kyoto carbon markets.</p>
<p>That is, if there was a sensibly designed emissions trading scheme. Such a scheme would be 100% "emitter pays", with emitters making their own market-based decisions to either reduce emissions or to buy the emissions units. Well we certainly don't have that.</p>
<p>So my conclusion is that it is not <b>just</b> that Tim Groser has absolutely no intention doing anything domestically to achieve the 2020 target of a 10 to 20% reduction in greenhouse gases. Groser and the National Government clearly have absolutely no intention of imposing any real carbon price on New Zealand's industrial and agricultural emitters.</p>
Robin Johnson's Economics Web Pagehttp://www.blogger.com/profile/12924305800986441792noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-51345083110359970172012-11-09T17:27:00.001+11:002012-11-12T18:24:20.953+11:00Will the last business lobbyist to leave please turn out the light at the end of the tunnel to an effective NZ emissions trading scheme?<p><img style="float: left;margin-right: 10px;padding-top: 5px" src= "//upload.wikimedia.org/wikipedia/commons/7/76/Bruce_Crandall%27s_UH-1D.jpg" alt="Bruce Crandall's UH-1D" width="150" height="128" /> <i>In this post Robin Johnson's Economics Web Page channels General Westmoreland and his Vietnam flashbacks to look at the National Government's latest change to the New Zealand Emissions Trading Scheme (NZETS). The NZ Parliament has just (8 November) passed amendments that indefinitely defer any greenhouse gas obligations for agriculture and indefinitely discount obligations to industries.This is a 'last helicopters off the Saigon hotel roof' point in the sad history of the always-doomed-to-fail New Zealand Emissions Trading Scheme.</i></p>
<p>According to <a href="http://everything2.com/user/Gorgonzola/writeups/light+at+the+end+of+the+tunnel">cultural folklore</a> the humiliating end of American engagement in the <a href="http://en.wikipedia.org/wiki/Vietnam_War">Vietnam war</a> was foreshadowed by graffiti;</p>
<blockquote><i>Will the last person out of the tunnel please turn out the light?</i></blockquote>
<p>Or, alternatively</p>
<blockquote><i>Would the last Marine to leave Vietnam please turn out the light at the end of the tunnel?</i></blockquote>
<p>This was in frank contrast to the early (with hindsight, unjustified) optimism of <a href="http://en.wikipedia.org/wiki/William_Westmoreland">General Westmoreland</a>, who had said in 1968 that he could <a href="http://olive-drab.com/od_history_vietnam_westmoreland.php">see the light at the end of the tunnel</a> of the war in Vietnam.</p>
<p>So why am I writing about graffiti from a war that ended 37 years ago? Well, to make a 'bonkers' analogy with the New Zealand Emissions Trading Scheme, of course! Getting the NZETS established was of course more or less a civil war, and when the Labour Government in its final days in office in late 2008 finally coalesced a coalition of compromise to pass the <a href="http://en.wikipedia.org/wiki/Climate_Change_Response_%28Emissions_Trading%29_Amendment_Act_2008">Climate Change Response (Emissions Trading) Amendment Act 2008</a>, it seemed there was 'light at the end of the tunnel' in terms of reducing New Zealand's emissions.</p>
<p>However, with the adoption <a href="http://parliamenttoday.co.nz/2012/11/ets-amendment-bill-passes-into-law/#more-1936">last night</a> (<a href="http://www.radionz.co.nz/news/political/120358/ets-bill-narrowly-passes-final-reading">8 November</a>) of the National Government's latest emitter-inspired fiddle; the <a href="http://www.parliament.nz/en-NZ/PB/Legislation/Bills/BillsDigests/a/0/5/50PLLaw19901-Climate-Change-Response-Emissions-Trading-and-Other-Matters.htm">Climate Change Response (Emissions Trading and Other Matters) Amendment Act</a>, I believe we can now just be honest with ourselves and see the latest amendments to the NZETS as the last helicopter off the hotel roof and the last act of the NZ emissions trading approach, which was futile from the beginning.</p>
<p>I have posted before about the <a href="http://hot-topic.co.nz/how-fast-shall-we-drive-over-the-cliff-nzs-ets-watered-down-again/">Climate Change Response (Emissions Trading and Other Matters) Amendment Bill</a>, noting that <a href="http://www.parliament.nz/en-NZ/PB/Legislation/Bills/BillsDigests/a/0/5/50PLLaw19901-Climate-Change-Response-Emissions-Trading-and-Other-Matters.htm">the amendments will;</a></p>
<ol><li>indefinitely exclude emissions from pastoral agriculture from the NZETS, instead of including them from 2015, which was already a delay from 2013.</li>
<li>extend indefinitely the discount to industries, the 'surrender one unit for two tonnes' of emissions (half price!) that was to end this year (“maintain the 1-for-2 surrender obligation after 2012, without specifying an end date in legislation”)</li>
<li> extend indefinitely the price cap, (“maintain the $25-a-unit fixed price option after 2012, without specifying an end date in legislation”)</li></ol>.
<p>And I have previously posted that the worst aspect of the NZETS is not the <a href="http://todanz.blogspot.com/2012/09/new-zealand-aluminium-smelter-ltd-do.html">corporate welfare in the form of excessive free allocation to industries</a>.</p>
<p>For me the worst aspect of the NZETS is it's absolute exposure to the <a href="http://todanz.blogspot.com/2012/08/new-zealand-emissions-trading-scheme.html">international carbon markets</a> which has the effect of knee-capping the NZ carbon price down to the <a href="http://todanz.blogspot.com/2012/10/brother-can-you-spare-310-for-tonne-of.html">rock-bottom international carbon price</a>. Today (9 November), the highest offer for a NZU for a tonne of CO2-e is $2.55 (See today's price and trend chart from OMF Ltd).</p>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-TVVUoaOY8xedBmjJVmltiIOAJZ-A7_LF-5IDqStkGM5lrRlRIH9BEA1H9teheoYVjN_X1a2A1zpFrV6seGZoZXPPOrpDA4o7Yj9gcoi34WudrWx_LTy-AyfkLzF0jforBxxUhGQb9AFo/s1600/NZU-price-09112012.png" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="110" width="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-TVVUoaOY8xedBmjJVmltiIOAJZ-A7_LF-5IDqStkGM5lrRlRIH9BEA1H9teheoYVjN_X1a2A1zpFrV6seGZoZXPPOrpDA4o7Yj9gcoi34WudrWx_LTy-AyfkLzF0jforBxxUhGQb9AFo/s400/NZU-price-09112012.png" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyZGpvZmWJOiGJbBtThrd3hMpogHbVr3vZgStZLuBbPGg66Ywsl6-GkpInYE4GwcahJG4WL7UXCuOqw9yqU7dxEZh_XEUY0e8_gO4QG4oumkreLc5Kt4YF1TOgj7KvkbeEcRA_B4Fyb2I/s1600/NZU-chart-09112012.png" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="194" width="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyZGpvZmWJOiGJbBtThrd3hMpogHbVr3vZgStZLuBbPGg66Ywsl6-GkpInYE4GwcahJG4WL7UXCuOqw9yqU7dxEZh_XEUY0e8_gO4QG4oumkreLc5Kt4YF1TOgj7KvkbeEcRA_B4Fyb2I/s400/NZU-chart-09112012.png" alt="NZU price per tonne 9 November 2012" /></a></div>
<p>So I <a href="http://todanz.blogspot.com/2012/09/how-fast-shall-we-drive-over-cliff-more.html">concluded</a> I agree with Jeanette Fitzsimons that the <a href="http://tvnz.co.nz/q-and-a-news/panel-smith-norman-debate-6-56-video-4406033#">NZETS is so bad at reducing GHG emissions, it no longer matters what amendments are made to it</a>.</p>
<p>That is why I think that the light at the end of the NZETS tunnel was always going to be eventually turned out. The final bit of the Vietnam analogy is who was going to turn out the light. I give that role to the professional big emitter's lobby groups, led by Business New Zealand and its astro-turf subsidiary the <a href="http://www.gpcnz.co.nz/">Greenhouse Policy Coalition</a>.</p>
<p><a href="http://www.brucejesson.com/?p=394">Nicky Hager in his Bruce Jesson lecture</a>, describes how lobbyists such as Business NZ and the Greenhouse Gas Coalition have manipulated the under-resourced media to give prominence to ideas pushed by their clients;</p>
<blockquote><i>"...the public spaces are cluttered with paid spokespeople and commercial agendas"</i> whose technique is to establish <i>"usefully biased ideas"</i> by creating <i>“some common lines that become the ‘mantra’” and then, 'keep repeating it endlessly' "</i> so that <i>"the angle, timing and quotes (in the media), do not come from journalists’ observations or journalists’ questions, but from the calculated efforts of PR and marketing people"</i>, and, as a consequence, the political debate is dominated by <i>"endless hectoring from the business lobby groups"</i></blockquote>
<p>The media 'mantra' pushed by the lobbyists is that if the NZETS establishes an effective carbon price on emitters, then jobs and exports and GDP will be lost (See <a href="http://www.gpcnz.co.nz/Site/News_Releases/Archive/ET_Scheme_Changes.aspx">GPCNZ 2008</a> and <a href="http://www.nbr.co.nz/article/warning-further-job-losses-if-govt-caps-offshore-emissions-trading-rh-13">Business NZ 2012</a>). Over the years of the debate over the NZETS, we have been endlessly hectored by business lobbyists that business trade competitiveness will be affected by the NZETS. Ministers Nick Smith and Tim Groser have long ago joined in and 'costs on businesses' is now routinely given as the reason for the lack of any real bite in the NZETS.</p>
<p>The endless hectoring that the "NZETS will affect exports and jobs" has been so successful that the big emitters wound up the the <a href="http://www.gpcnz.co.nz/">Greenhouse Policy Coalition</a> back in March 2012. I guess they had a helicopter to catch, after they turned out that light in the tunnel.</p>Robin Johnson's Economics Web Pagehttp://www.blogger.com/profile/12924305800986441792noreply@blogger.com1tag:blogger.com,1999:blog-7263129089232513980.post-8065547387396117592012-11-03T12:34:00.001+11:002012-11-04T09:39:12.105+11:00And when I awoke I was alone the exporter had flown Norwegian wood isn't it good<p><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCsEOPaRV7oFLCo8jm4ZEXTRt-94s0KFSXFP4JMwGp3JfCyqqTesulVEjKukSOITlpu1ede76lnjCoqRqhYZJ_f2A9w21FxoT2tS_CAPyFfm1XeHl6Ct074NnPZdMzvBIVXzIQLphB2p0/s1600/320px-100_MW_Geothermal_Power_Plant_at_Kawerau_NZ.jpg" imageanchor="1" style="clear:left; float:left;margin-right:0.5em; margin-bottom:0.5em"><img border="0" height="150" width="200" alt="Geothermal Power Plant on Tasman Mill site, Kawerau NZ" title="Geothermal Power Plant on Tasman Mill site, Kawerau NZ" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCsEOPaRV7oFLCo8jm4ZEXTRt-94s0KFSXFP4JMwGp3JfCyqqTesulVEjKukSOITlpu1ede76lnjCoqRqhYZJ_f2A9w21FxoT2tS_CAPyFfm1XeHl6Ct074NnPZdMzvBIVXzIQLphB2p0/s200/320px-100_MW_Geothermal_Power_Plant_at_Kawerau_NZ.jpg" /></a>
<i>Norwegian wood and newsprint transnational Norske Skog Tasman (NZ) Ltd 'exports itself'. <a href="http://rwmjohnson.blogspot.co.nz/2012/11/godfather-part-5-exporter-had-flown.html">Robin Johnson's Economics Web Page</a> looks at the flight of another manufacturer and CO<sub>2</sub> emitter and exporter as it lays off staff and reduces production. Wasn't the very generous free allocation of units in the New Zealand Emissions Trading Scheme meant to keep exporters like Norske Skog Tasman in New Zealand? Or have we just removed the price signal from exporters for no valid reason and stuffed the NZETS?</i></p>
<p><a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10841322">The New Zealand Herald reports</a> that the Norwegian-owned newsprint-maker and transnational <a href="http://en.wikipedia.org/wiki/Norske_Skog">Norske Skog Tasman NZ</a> has joined the ranks of export businesses like <a href="http://hot-topic.co.nz/rio-tinto-alcan-nz-plays-godfather-nice-aluminium-smelter-you-got-be-a-shame-if-something-happened-to-it/">Rio Tinto Alcan NZ/NZ Aluminium Smelters</a> who are exporting jobs off shore. Incidentally Rio Tinto Alcan NZ/NZ Aluminium Smelters have just been described as <a href="http://www.stuff.co.nz/southland-times/opinion/7894312/Smelter-NZs-biggest-bludger">New Zealand's biggest bludger</a>.</p>
<p>Norske Skog is shutting down one of two newsprint machines at the <a href="http://en.wikipedia.org/wiki/Tasman_Mill">Tasman Mill</a>, in <a href="http://en.wikipedia.org/wiki/Kawerau">Kawerau</a>, due to lowered demand for newsprint.</p>
<p>At the same time Norske Skog is investing <a href="http://www.norskeskog.com/default.aspx?ID=2019&feed=-N-105-PR-201209-1639746">$A84 million in new plant</a> at the existing <a href="http://en.wikipedia.org/wiki/Boyer,_Tasmania">Boyer Mill in Tasmania</a> with some substantial help from the Australian Federal government (A$28 million grant) and State government (A$13 million loan).</p>
<p>The NZ Government has been asked "what is being done for jobs"? And the NZ Government's <a href="http://www.woodweek.com/index.cfm?id=200#2">"market will take care of everything"</a> approach has been called naive.</p>
<p>The NZ Herald mentioned the <a href="http://en.wikipedia.org/wiki/New_Zealand_Emissions_Trading_Scheme">NZ emissions trading scheme</a> (NZETS) only briefly in passing, as they noted the <a href="https://www.commtrade.co.nz/">rock-bottom NZ carbon price</a> and the poor despairing <a href="http://www.radionz.co.nz/news/rural/118978/foresters-urge-limit-on-foreign-carbon-credits">carbon foresters</a>.</p>
<p>So that prompted me to look at how Norske Skog Tasman NZ fits into the NZETS. What are the greenhouse gas emissions of the Norske Skog Tasman newsprint mill? Is Norske Skog Tasman regulated by the NZETS? Have they received a free allocation of emission units (like NZ Aluminium Smelters Ltd) to reduce the net number they have to buy? Which is meant to be the point of free allocation; ostensibly to protect their international competitiveness and to keep the jobs in NZ. Is the free allocation of units enough? Is it even a reasonable idea that free allocations of units make any difference to transnationals?</p>
<p>Norske Skog Tasman uses <a href="http://en.wikipedia.org/wiki/Geothermal_power_in_New_Zealand">geothermal</a> steam from the <a href="www.nzgeothermal.org.nz/nz_geo_fields.html#Kawerau">Kawerau geothermal field</a> for heating and electricity generation in its newsprint mill. Geothermal steam naturally contains <a href="http://www.nzgeothermal.org.nz/emissions.html">carbon dioxide and methane</a> which are released when the heat energy is transformed.</p>
<p>The use of <a href="http://www.mfe.govt.nz/publications/climate/seip-reporting-guidance-geothermal-fluid-under-nzets/page1.html">geothermal steam for energy</a> is covered by the NZETS as an energy sector emission. So Norske Skog Tasman must report its greenhouse gas emissions and obtain and surrender emissions units to comply with the NZETS.</p>
<p>The Ministry for the Environment provides a <a href="http://www.mfe.govt.nz/publications/climate/emissions-trading-bulletin-13/index.html">specific emissions factor</a> in the <a href= "http://www.legislation.govt.nz/regulation/public/2009/0285/latest/DLM2390302.html">Climate Change (Stationary Energy and Industrial Processes) Regulations 2009</a> for calculating the mass of greenhouse gas emissions from Kauwerau's geothermal steam. The factor is 0.0275 tonnes CO2-equivalent per tonne of geothermal steam used.</p>
<p>Norske Skog Tasman's production of newsprint is classified as an emissions-intensive trade-exposed activity. They are therefore eligible for the highest level of assistance; covering "90%" of their production in the form of a free allocation of <a href="http://www.climatechange.govt.nz/emissions-trading-scheme/participating/industry/allocation/eligible-activities/">0.4911 emission units per tonne of uncoated newsprint</a>.</p>
<p>So far, so much like NZ Aluminum Smelters/Rio Tinto Alcan NZ. Except there is the peculiarity that the free unit allocations are calculated from a different variable from the GHG emissions. Emissions are calculated from tonnes of geothermal steam used, and free units are calculated from tonnes of newsprint.</p>
<p>Let's start with a 'back of envelope' calculation of the units Norske Skog Tasman should surrender (the NZETS gross carbon price).</p>
<p>According to the
<a href="http://embracechange.co.nz/images/uploads/content-images/IS_Kawerau_-_Geothermal_field_background_study.pdf">Kawerau Geothermal Field Background Study</a>, Mighty River Power supplies 285 tonnes of geothermal steam per hour to Norske Skog Tasman, who on-sell 26 tonnes to Carter Holt Harvey Wood Products. So net use is 259 tonnes per hour.</p>
<p>Assuming 24/7 production, the annual use is 259 * 24 * 365 = 2,268,840 tonnes of steam per annum. And 2,268,840 * 0.0275 = 62,393.1 tonnes CO2-e. So in a typical year, Norske Skog Tasman should be surrendering very roughly about 62,000 emission units under the NZETS.</p>
<p>How many free emission units were allocated to Norske Skog Tasman? In both 2010 and 2011, Norske Skog Tasman received the fifth largest free allocation of units (after the Smelter, NZ Steel, Methanex and Fletcher Concrete). In 2010, Norske Skog Tasman received <a href="http://www.climatechange.govt.nz/emissions-trading-scheme/participating/industry/allocation/decisions/2010.html">122,826 New Zealand Units</a> (NZUs) for the six-month 2010 NZETS compliance period. In 2011 Norske Skog Tasman received <a href="http://www.climatechange.govt.nz/emissions-trading-scheme/participating/industry/allocation/decisions/index.html">237,752 NZUs</a>.</p>
<p>Assuming 24/7 production in 2011, Norske Skog Tasman was allocated 381% more units than it needed to surrender (237752/62393.1 * 100 = 381.0550). Thats a way more excessive free allocation than NZ Aluminium Smelters!</p>
<p>However, I might not have the right numbers. My calculation may be wrong. Why don't I ask the <a href="http://en.wikipedia.org/wiki/Environmental_Protection_Authority_%28New_Zealand%29">Environmental Protection Authority</a> under the <a href="http://en.wikipedia.org/wiki/Official_Information_Act_1982">Official Information Act</a> <a href="http://fyi.org.nz/request/emission_units_surrendered_by_no">for the exact number of units surrendered by Norske Skog Tasman</a>. Watch this space.</p>
<p>Alternatively lets look at Norske Skog Tasman's <a href="http://www.business.govt.nz/companies/app/service/services/documents/6BABD9DB851016E6E7F2B2EA06A5846C">annual financial statements (PDF)</a> as filed at the NZ Companies Office for the 2011 calendar year.</p>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjR9Q-tFacnG51eurxbzgsIC3VtV9Wl0ixalXJAqyljv2RtzzoGFwqlbwQG6EiuhO93dLP6hc5fLLip2HReHWujOz-CS3rB1rV1zr5YXUnyxXKqFRL1_iQ-Eaz7Tkf58eQDVZ7J80T4YQA/s1600/NorsSkog-nzus" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="208" width="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjR9Q-tFacnG51eurxbzgsIC3VtV9Wl0ixalXJAqyljv2RtzzoGFwqlbwQG6EiuhO93dLP6hc5fLLip2HReHWujOz-CS3rB1rV1zr5YXUnyxXKqFRL1_iQ-Eaz7Tkf58eQDVZ7J80T4YQA/s400/NorsSkog-nzus" /></a></div>
<p>Note 24 helpfully records that Norske Skog Tasman received 119,646 units in 2010 and 241,825 units in 2011. They surrendered only 10,754 units and sold 160,000 units, and had 190,717 units left at 31 December 2011.</p>
<p>The accounts show that in 2011 Norske Skog Tasman was allocated 22 times more units than it needed (241,825/10,754 = 22.49). The units allocated to protect jobs and export competitiveness, were not 90% of units surrendered. They were not 100% of units surrendered. The units allocated exceeded the units surrendered by a factor of 22!.</p>
<p>I can still here an echo of voice saying "You have left out the electricity allocation factor! You are wrong wrong wrong!" Well, yes, the industrial free allocation factor of 0.49 units per tonne of newsprint allegedly includes compensation for NZETS-related electricity price increases our manufacturing emitter is subject to. This rationale and the factor of 0.49 units per tonne were approved in this <a href="http://www.mfe.govt.nz/cabinet-papers/industrial-allocation-group-one.html">Cabinet paper</a>. However, the cabinet paper provides no explanation of how the factor of 0.49 units per tonne of newsprint was calculated.</p>
<p>The electricity allocation factor has also been the subject of a <a href="http://www.climatechange.govt.nz/emissions-trading-scheme/building/regulatory-updates/eaf-consultation.html">consulation process</a> and there is an <a href="http://www.climatechange.govt.nz/emissions-trading-scheme/building/groups/eaf-groups/">emitters contact group</a> for it as well.</p>
<p>However I think the idea that manufacturing emitters need compensation for NZETS-related electricity price increases is a smoke-screen. Norske Skog Tasman has not had its electricity price increased by the NZETS.</p>
<p>According to the <a href="http://embracechange.co.nz/images/uploads/content-images/IS_Kawerau_-_Geothermal_field_background_study.pdf">Kawerau Geothermal Field Background Study (PDF)</a>, Norske Skog Tasman and <a href="http://en.wikipedia.org/wiki/Mighty_River_Power">Mighty River Power</a> (MRP) have <i>"..a power purchase agreement whereby NST (Norske Skog Tasman) contracted to take a majority of MRPs generation. Due to the fact that MRPs plant is grid tied, this is effectively a financial agreement offering NST price certainty and MRP a customer contracted to take the majority of supply."</i></p>
<p>The Tasman Mill is not just a plant connected to the grid. It was built to use geothermal power, just as Tiwai Point Smelter was built to use Lake Manapouri's hydro power. The Tasman Mill is joined at the hip to the Kawerau geothermal field. The newest Mighty River <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10519417">Kawerau geothermal generation plant</a> was built on the Tasman Mill site (see picture above). Norske Skog is buying geothermal steam from Mighty River Power and paying MRP as if it was electricity via a financial derivative contract.</p>
<p>To conclude the free allocation part of the analysis; for Norske Skog Tasman, the NZETS free unit allocations are not just a discount of part of the full NZETS carbon price, the allocations are a transfer of substantial corporate welfare. The units allocated exceed the units they have to surrender by an estimated factor of 22.</p>
<p>And in terms of protecting the international competitiveness of Norske Skog Tasman and keeping jobs in New Zealand, the free allocations have not made the slightest difference. Thats in spite of <a href="http://en.wikipedia.org/wiki/National_Party_of_New_Zealand">National Party</a> scaremongering back in 2008 that the <a href="http://www.whakatanebeacon.co.nz/cms/news/2008/07/printer_art10003002.php">NZETS would cause the mill to close</a>.</p>
<p>And Catherine Beard of Business New Zealand (formerly boss of the big polluters advocate the <a href="http://hot-topic.co.nz/ask-me-why/">Greenhouse Policy Coalition</a>) is still scaremongering in October 2012 that any real cap in the NZETS will <a href="http://www.nbr.co.nz/article/warning-further-job-losses-if-govt-caps-offshore-emissions-trading-rh-13">cause more job losses</a> Talk about slamming the stable door after the horse has bolted.</p>
<p>Lets look at the real factors affecting whether a transnational commodity manufacturer stays in a country like New Zealand or Australia.</p>
<p>If you are a transnational like Norske Skog, you always have the choice of playing off more than one jurisdiction. The country with the smaller economy, like New Zealand, can't match the money of a larger economy like Australia. If Fletcher Challenge had not <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=128736">sold the Tasman Mill to Norske Skog</a> in 2000, this 'regulatory arbitrage' would not be possible.</p>
<p>Corporate aquisitions that seemed a good idea before the Global Financial Crisis, look much more risky after the Global Financial Crisis. In 2000, Norske Skog paid $NZ5 billion for <a href="http://en.wikipedia.org/wiki/Fletcher_Challenge">Fletcher Challenge's</a> paper and pulp assets. Those assets included both the Tasman Mill in Kawearau and the mill at Boyer, Tasmania. In 2011, Norske Skog was faced with falling international demand and prices and it was considering selling some assets <a href="http://www.scoop.co.nz/stories/BU1110/S00275/norske-skogs-asset-sale-plan-does-not-include-nz-mill.htm">to avoid default on its debt</a>.</p>
<p>Incidentally, Rio Tinto Alcan shares most of these international commodity trader issues; the over-priced debt-funded purchase of Alcan and Comalco by Rio Tinto before the GFC, the Rio Tinto's plan to sell Pacific Aluminium (including NZ Aluminium Smelters Ltd), the low demand for aluminium from the stagnant economies of the Eurozone and the USA and the price and supply competition from Chinese smelters in the huge and growing Chinese market.</p>
<p>Imagine a fictional conversation between NZ Prime Minister John Key and the CEO of Norske Skog.</p>
<blockquote>"So, Yon, you don't mind if I call you Yon? For the Tasman Mill, you kiwis are all online, the demand for newsprint is down. You give me quarter of million of these NZ units that are worth $NZ3 each. No other ETS accepts them. Thats pretty low quality carbon credit, Yon. Now, Yulia Gillard, she gives us $A28 million for new plant at the Boyer mill in Tasmania. Can you match that, Yon? Can you?"</blockquote>
<p>That is the bottom-line, isn't it? New Zealand could never have matched $A28 million, either as a direct grant, or through manipulation of the NZETS free allocation provisions.</p>
<p>To me, the Norske Skog Tasman job losses are a good demonstration of how futile it was to have an NZETS designed mainly to completely avoid any carbon price on transnational exporters. The carbon price has not just been reduced or discounted to Norske Skog, the sign has been reversed so that its an off-balance sheet transfer of corporate welfare to them in the form of emission units. Such transfers are no doubt sought by local managers who are rent-seeking, but they will be irrelevant to the international commodity trade movements that will ultimately determine whether these transnationals stay or go.</p>
Robin Johnson's Economics Web Pagehttp://www.blogger.com/profile/12924305800986441792noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-5602704462047389162012-10-28T10:23:00.001+11:002012-10-28T10:33:32.553+11:00Brother can you spare $3.10 for a tonne of carbon dioxide?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEioVWClVqDtVE_F475ZKVObyM8vlgKcBEsjbvXB1FCMBWf0OcqGahErjf_S3I-7PRwIfvEDVrikVKVLjmcM3Eo_a-K9snEzX9_rNKlLuHoHnGm9kVuUrb_-NY59MOghRcE7BLNwT44s5NQ/s1600/A_small_cup_of_coffee213-160.jpg" imageanchor="1" style="clear:left; float:left;margin-right:1em; margin-bottom:1em"><img border="0" height="160" width="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEioVWClVqDtVE_F475ZKVObyM8vlgKcBEsjbvXB1FCMBWf0OcqGahErjf_S3I-7PRwIfvEDVrikVKVLjmcM3Eo_a-K9snEzX9_rNKlLuHoHnGm9kVuUrb_-NY59MOghRcE7BLNwT44s5NQ/s400/A_small_cup_of_coffee213-160.jpg" /></a></div><i>In which <a href="http://rwmjohnson.blogspot.co.nz/">Robin Johnson's Economics Web Page</a> laments the homelessness and begging now seen each day on Lambton Quay in Wellington. And a lament for both the downward spiral of the NZ Emissions Trading Scheme and the downward spiral of the New Zealand spot price for a tonne of carbon dioxide - now less than the cost of a flat white. Brother, can you spare $NZ3.10 for a tonne of carbon dioxide?</i></p><br/>
<p>The other day I looked up the old Tin Pan Alley song <a href="http://www.library.csi.cuny.edu/dept/history/lavender/cherries.html">"Brother can you spare a dime?"</a> The experience of poverty and the Depression in America summed up in a popular song. The lyrics were written by Yip Harburg in 1931, and the music was composed by Jay Gorney. The version by <a href="http://www.youtube.com/watch?v=4F4yT0KAMyo">Al Jolson</a> is very well known, but I like this version by <a href=""http://www.youtube.com/embed/YsJGagKWrds">Charlie Palloy and his Orchestra</a>.</p>
<iframe width="420" height="315" src="http://www.youtube.com/embed/YsJGagKWrds" frameborder="0" allowfullscreen></iframe>
<p>I looked up <i>"Brother can you spare a dime?"</i> as I was thinking about <a href="http://www.stuff.co.nz/national/7779779/Homeless-problem-demands-attention">homelessness</a> and <a href="http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10838726">poverty</a> in New Zealand. I am not the only one. <a href="http://www.caritas.org.nz/schools/students/poverty-aotearoa-new-zealand">Churchs</a>, <a href="http://www.nzccss.org.nz/site/page.php?page_id=276">charities</a>, <a href="http://www.greens.org.nz/endchildpoverty/factsheet">politicians</a>, <a href="http://www.3news.co.nz/Experts-lament-state-of-NZ-child-poverty/tabid/817/articleID/270416/Default.aspx">experts</a> and <a href="http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10839028">academics</a> are also concerned about <a href="http://www.tv3.co.nz/Shows/InsideNZ/InsideChildPovertyASpecialReport.aspx">poverty in New Zealand</a>.</p>
<p>I see homelessness and poverty every weekday in <a href="http://www.stuff.co.nz/dominion-post/news/local-papers/the-wellingtonian/6975460/Streetwise-History-Lambton-Quay">Wellington's main CBD thoroughfare, Lambton Quay</a>. I walk along Lambton Quay looking forward to the first coffee of the day. I usually note how many people are begging. There are almost always a few people begging on Lambton Quay. 'Brother can you spare a dime' is alive and well even on Lambton Quay.</p>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTDjN_nqOZnvOrLl8lpulDPg49KRDbgqXqc72GEiqRvZkWRvlQXm5bj8djrsbS-py1LBXecLQlRtSN9pkAzhqGqex4hyphenhyphenH6auJgtD0Z4OPbaDW0kPeBFVU1wCAbWNF-0gTCVR9Jv7ypisg/s1600/HomelessMan.jpg" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="225" width="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTDjN_nqOZnvOrLl8lpulDPg49KRDbgqXqc72GEiqRvZkWRvlQXm5bj8djrsbS-py1LBXecLQlRtSN9pkAzhqGqex4hyphenhyphenH6auJgtD0Z4OPbaDW0kPeBFVU1wCAbWNF-0gTCVR9Jv7ypisg/s400/HomelessMan.jpg" /></a></div>
<p>Except it's sad cardboard signs saying 'Homeless and need help'. Also its at least $3 to $4 for a coffee.</p>
<p>The other price thats less than the cost of a flat white is the spot price of carbon dioxide in NZ. The carbon trader OMF reports NZ spot prices each day at <a href="https://www.commtrade.co.nz/">CommTrade Carbon</a>. Guess what? On 17 October, the day Parliament's Finance and Expenditure Select Committee reported on the latest <a href="http://www.climatechange.govt.nz/emissions-trading-scheme/ets-amendments/">amendments to the NZETS</a>, the last trade of a New Zealand Unit ('NZU', a tonne of carbon dioxide) was at $3.10.</p>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4Lpg7nxUk1Q-W1UJtK0DyRRDIv8FzJyEJIPHfQvwGCFjwlrgAWFiYUq97v02ODF4mZ5K0Q646ude2lICneGgcPhUZYLOo8E1Xj7Us3ZV7E9qGqkM_NTdBN425suwkGHCS207kN7OEbEs/s1600/NZUchart17102012.png" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="189" width="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4Lpg7nxUk1Q-W1UJtK0DyRRDIv8FzJyEJIPHfQvwGCFjwlrgAWFiYUq97v02ODF4mZ5K0Q646ude2lICneGgcPhUZYLOo8E1Xj7Us3ZV7E9qGqkM_NTdBN425suwkGHCS207kN7OEbEs/s400/NZUchart17102012.png" /></a></div>
<p>OMF also display a chart. It shows the collapse of the international carbon price reflected in our own plucky little battler NZETS. It certainly looks <a href="http://www.southem.com/2012/09/nz-emissions-trading-scheme-going-pear-shaped/">pear-shaped</a>.</p>
<p>As the political philosopher Simon Caney and economist Cameron Hepburn note with a little British understatement, <a href="http://www.cccep.ac.uk/Publications/Working-papers/Papers/50-59/WP59_carbon-trading-caney-hepburn.pdf">
when the demand for permits falls to the extent that the permit price approaches zero, it is difficult to conclude that an ETS is working to reduce emissions</a>.</p>
<p>Can any sane person look at this chart and reach any other conclusion than the NZETS has completely failed as a carbon price policy incentivising reduction in GHG emissions?</p>
<p>OMF originally committed the chart sin of not starting the vertical (price) axis at $0. However, reality has intruded. As the New Zealand Unit (NZU) price has relentlessly declined towards $0, they keep having to move the bottom of their chart closer to zero. That would almost be a small bit of humour in a pretty sad story. If it wasn't the empirical evidence of the failure of the design of the NZETS as a policy to price greenhouse gas emissions.</p>
<p>If the $3.10/tonne NZU price is the <a href="http://www.scoop.co.nz/stories/PO1210/S00269/ets-amendment-bill-nail-in-coffin-for-nz-climate-action.htm">death notice</a> of the NZETS, the funeral must be the latest Finance and Expenditure Select Committee process to amend the NZETS. On 17 October 2012, this committee released its report <a href="http://www.parliament.nz/en-NZ/PB/SC/Documents/Reports/4/e/2/50DBSCH_SCR5632_1-Climate-Change-Response-Emissions-Trading-and-Other.htm">Climate Change Response (Emissions Trading and Other Matters) Amendment Bill</a></p>
<p>This is the National Government's bill to further weaken the NZ Emissions Trading Scheme. You know, indefinitely delay the entry of agriculture, make the half-price "two-for-one" transition permanent.</p>
<p>If you can quickly recover your will to live after digesting page after page of bureaucratic and political policy denial and excuse-making, and the complete failure of the National Government majority to engage at all with the minority political parties or submitters or ENGOs or the Parliamentary Commissioner for the Environment, download and read the 117-page report.</p>
<p>Otherwise, just read Patrick Smellie's report <a href="http://www.nbr.co.nz/article/no-restrictions-foreign-sourced-carbon-credits-confirmed-bd-130869">"No restrictions on foreign-sourced carbon credits confirmed"</a></p>
<blockquote><i>"The Climate Change Response (Emissions Trading and Other Matters) Bill was reported back to parliament by the finance and expenditure select committee with only technical amendments, and a decision that capping the use of foreign credits would compromise the emissions trading scheme principle of "least cost of compliance".<br/>
The policy has seen major emitters such as oil and electricity companies snap up some of the lowest cost carbon units available on global markets, where prices have slumped to as little as $2 a tonne.<br/>
New Zealand Units, issued by the government, continue to be worth slightly more, at around $3 a tonne, but well below the $25 a tonne maximum price put on carbon when the ETS was introduced in 2009."</i></blockquote>
<p>Or just read the press release from WWF-New Zealand.</p>
<blockquote><i>This is another <a href="http://www.scoop.co.nz/stories/PO1210/S00269/ets-amendment-bill-nail-in-coffin-for-nz-climate-action.htm">nail in the coffin</a> for New Zealand's credibility on climate change and suggests the government has no intention of trying to set this country's emissions on a downward path. Other parties in the UN climate talks will rightly see New Zealand's claims to be doing something to reduce emissions as all spin and no substance."</i></blockquote>
<p>What a complete shambles! Why didn't we just have a no-exceptions carbon tax in the first place?</p>
<blockquote>
They used to tell me I was building a dream,<br/>
and so I followed the mob,<br/>
When there was earth to plow, or guns to bear,<br/>
I was always there right on the job.<br/>
They used to tell me I was building a dream,<br/>
with peace and glory ahead, <br/>
Why should I be standing in line, just waiting for bread?</p>
<p>Once I built a railroad, I made it run, made it race against time. <br/>
Once I built a railroad; now it's done. Brother, can you spare a dime? <br/>
Once I built a tower, up to the sun, brick, and rivet, and lime; <br/>
Once I built a tower, now it's done. Brother, can you spare a dime?</p>
<p>Once in khaki suits, gee we looked swell, <br/>
Full of that Yankee Doodly Dum, <br/>
Half a million boots went slogging through Hell,<br/>
And I was the kid with the drum!</p>
<p>Say, don't you remember, they called me Al; it was Al all the time. <br/>
Why don't you remember, I'm your pal? Buddy, can you spare a dime?</blockquote>Robin Johnson's Economics Web Pagehttp://www.blogger.com/profile/12924305800986441792noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-46773111919513693122012-09-26T22:16:00.000+10:002012-09-27T16:43:12.551+10:00New Zealand's Minister of Economic Development Steven Joyce goes ferally pro-coal and attempts to influence the Environment Court and Court of Appeal<p><img style="float: left;margin-right: 10px;padding-top: 5px" src="http://hot-topic.co.nz/wp-content/uploads/2012/02/steven-joyce.jpg" alt="" width="100" height="75" />Today I was absolutely gobsmacked by a statement by Steven Joyce, the New Zealand Minister of Economic Development, in an official <a href="http://beehive.govt.nz/release/minister-calls-bathurst-objectors-pull-appeals">New Zealand Government press release</a>.</p>
<p>Joyce explicitly took the side of and promoted the cause of Australian coal miners, <a href="http://www.bathurstresources.com/Projects/New-Zealand/Current-Activities">Bathhurst Resources</a>, in two up-coming court cases.</p>
<p><a href="www.scoop.co.nz/stories/PA1209/S00372/minister-calls-on-bathurst-objectors-to-pull-appeals.htm">Joyce said:</a></p>
<blockquote><em>"The <a href="http://en.wikipedia.org/wiki/Escarpment_Mine_Project">Escarpment Mine</a> is an open cast mining project that is ready to go and would provide 225 jobs and incomes for workers and their families on the West Coast straight away. The developer is being held up from opening the Escarpment Mine by on-going litigation that has gone through the Environment Court, the High Court and the Court of Appeal. These on-going objections are to resource consents which were granted more than a year ago. The whole consenting process for this development has now taken a staggering seven years. I call on those objectors to the mine to reconsider their appeals and consider the economic future of the West Coast and its people."</em> </blockquote>
<p>I know Joyce is very pro-development, Joyce even has his own <a href="http://hot-topic.co.nz/?s=Steven+Joyce">archive of posts</a> on the Hot Topic blog, where Joyce's preference for fossil fuel developments is obvious.</p>
<p>But this time he has crossed a line. Joyce is using his position as a Minister of the Crown to explicitly try to influence decisions yet to be made by the <a href="http://en.wikipedia.org/wiki/Environment_Court">New Zealand Environment Court</a> and the <a href="http://en.wikipedia.org/wiki/Court_of_Appeal_of_New_Zealand">New Zealand Court of Appeal</a> on the <a href="http://en.wikipedia.org/wiki/Resource_consent">resource consents</a> sought by Bathurst.</p>
<p>Joyce is breaching the <a href="http://en.wikipedia.org/wiki/Sub_judice">Sub judice rule</a>.</p>
<p>Let me back up and start at the beginning. The resource consents for Bathurst's open cast <a href="http://en.wikipedia.org/wiki/Escarpment_Mine_Project">Escarpment mine proposal</a> were applied for in August 2010. Not seven years earlier as alleged by Joyce. Bathurst took over the project from L and M Coal Ltd.</p>
<p>In August 2011, the hearing commissioners acting for the West Coast regional and district councils considered with some anguish that resource consents <a href="http://hot-topic.co.nz/new-opencast-mine-permitted/">could be approved</a>.</p>
<p>This was in spite of the many adverse effects on native species habitat, water quality and the coal-measure limestone landforms within the Mt Rochfort Conservation Area. Yes the proposed mine is within a conservation area. The commissioners refused to factor in climate change effects from the eventual release of carbon dioxide from the coal. In other words, it was a pretty marginal decision.</p>
<p>However, the resource consents are not legally granted, as environmental NGOs <a href="http://www.forestandbird.org.nz/">Forest and Bird</a> and the West Coast Environmental Network immediately lodged appeals with the New Zealand Environment Court. This is Joyce's second factual error; in an appeal of a resource consent, the council's decision ceases to exist. The Environment Court starts from a blank piece of paper, examines the facts and makes it's own decision. It considers consent appeals on a 'de novo' basis.</p>
<p>Then Bathurst started the cycle of litigation - by applying to the Environment Court, separately from the consent appeal, to have the effects of climate change barred from the consent appeal. <a href="http://hot-topic.co.nz/zombie-ets-infects-rma-with-climate-insanity/">Bathurst succeeded</a>. So Forest and Bird and the West Coast Environmental Network appealed that decision to the High Court. <a href="http://hot-topic.co.nz/moon-walking-with-due-legal-process-to-a-very-hot-place-neil-armstrong-coal-mining-global-warming/">Bathurst won that appeal</a>. However, Forest and Bird and the West Coast Environmental Network have appealed the High Court decision to the Court of Appeal.</p>
<p>So there are two court hearings yet to happen.</p>
<p>1. The Environment Court is yet to decide on the facts; if the resource consents 'promote sustainable management' of resources as required by the <a href="http://en.wikipedia.org/wiki/Resource_Management_Act_1991">Resource Management Act</a> and may be granted.</p>
<p>2. The Court of Appeal is yet to decide on the law; whether it permits or prohibits the Environment Court considering the greenhouse effects of the carbon dioxide emissions from the downstream combustion of the coal.</p>
<p>Now Steven Joyce, a Minister within the Executive branch of Government, is expressing an opinion on what the outcome of the Court's process should be.</p>
<p>This is contrary to the 'sub judice' rule; which is simply speaking "Don't comment on undecided Court cases".</p>
<p>Or as set out in Parliament's <a href="http://www.parliament.nz/NR/rdonlyres/65E97824-9EED-447E-832A-E4A4418EAEA2/206415/standingorders2011_1.pdf">Standing Order 112</a>.</p>
<blockquote><em>"112 Matters subject to judicial decision<br />
(1) <u>Matters awaiting or under adjudication in, or suppressed by an order of, any New Zealand court may not be referred to</u> in any motion, debate, or question, including a supplementary question, subject always to the discretion of the Speaker and to the right of the House to legislate on any matter or to consider delegated legislation."</em></blockquote>
<p>Or as set out in the Office of the Clerk of the House of Representatives document <a href="http://www.parliament.nz/en-NZ/AboutParl/HowPWorks/PPNZ/b/0/d/00HOOOCPPNZ_161-Chapter-16-Debate.htm#_Toc268768506">"Sub judice rule"</a>. Chapter 16 in 'Parliamentary Practice in New Zealand'. New Zealand Parliament (14 October 2010).</p>
<blockquote><em>"The Standing Orders prohibit reference in any debate to any matters awaiting or under adjudication in a court from the time the case has been set down for trial or otherwise brought before the court, if it appears to the Speaker that there is a real and substantial danger of prejudice to the trial of the case...This is the implicit acknowledgment by the legislature that the proper forum in which to resolve legal disputes is the courts and that <u>the legislature, above all other institutions, should take extreme care not to undermine confidence in the judicial resolution of disputes by intruding its views in individual cases</u>...The House's sub judice rule takes effect in criminal cases from the moment a charge is made and in other cases from the time proceedings are initiated by filing the appropriate document in the registry or office of the court."</em></blockquote>
<p>Or as set out by the Speaker, Margaret Wilson, on 16 October 2007, in <a href="http://www.parliament.nz/en-NZ/PB/Debates/Debates/5/c/0/48HansD_20071016_00000015-Speaker-s-Rulings-Sub-Judice-Rule-Operation.htm">"Speaker's Rulings Sub Judice Rule Operation.</a> </p>
<blockquote><em>"It seems to me that it is important in any consideration of it to emphasise the high constitutional nature of the rule. It stands as an expression of the relationship between the different branches of government; the legislative branch and the judicial branch. <u>This House determines what the law should be, but it is for the courts to determine in each particular case how the law is to be applied</u>. In criminal matters, it is not for this House to decide guilt or innocence. That is a matter for a court of law."</em></blockquote>
<p>Obviously, Joyce and the rest of the <a href="http://en.wikipedia.org/wiki/Fifth_National_Government_of_New_Zealand">National Government</a> just don't give a stuff about anything of a high constitutional nature or the rule of law, or Joyce driving his <a href="http://www.youtube.com/watch?v=ukEkB0Y6QZw">Bagger 2000 coal excavator</a> through the 'sub judice' rule. Clearly such things are just the concerns of <a href="http://hot-topic.co.nz/minister-wants-all-options-open/">those pesky people who obstruct progress when government tries to remove roadblocks in the way of business development</a>.</p>
<p>Even not-so-stellar Minister of Energy <a href="http://www.beehive.govt.nz/minister/phil-heatley">Phil Heatley</a> knew better than to comment on the Bathurst Environment Court appeal when he was asked about it on a <a href="http://tvnz.co.nz/q-and-a-news/transcript-phil-heatley-interview-4833686">Q and A interview</a>.</p>
<blockquote><em>"Well, you appreciate, Shane, this is before the courts. I'm a bit limited about how much I can discuss this. But the reality is Denniston, like any other application, has to go through a process, and there is a balance between the economic benefits and the- what impact it'll have on the environment."</em></blockquote>
<p>Kevin Hackwell of <a href="http://www.forestandbird.org.nz/">Forest and Bird</a> has <a href="http://www.scoop.co.nz/stories/PO1209/S00333/forest-bird-rejects-request-to-withdraw-appeal.htm">responded promptly to Joyce's call</a> and raised the issue of how independent other decision making may be, such as the Minister of Conservation's decision to grant Bathurst <a href="http://www.nzpam.govt.nz/cms/minerals/permits/what-about-land-access#access_to_doc">access for mining in a conservation area</a>, which is also yet to be made by the Minister Kate Wilkinson.</p>
<blockquote><em>"There would be a serious question, given his public advocacy, about whether such a decision has been influenced by government policy."</em></blockquote>
<p>That's an important point. Especially since the Government wants to make stop the Minister of Conservation making the <a href="http://www.pce.parliament.nz/publications/all-publications/making-difficult-decisions-mining-the-conservation-estate">decisions on mining access to conservation areas</a> on the basis of conservation purposes.</p>
<p>The Government has just introduced amendments to the Crown Minerals Act which add the <a href="http://norightturn.blogspot.co.nz/2012/09/prising-open-our-national-parks.html">Minister of Energy as joint decision-maker and add economic matters to the mandatory conservation purposes</a> the Minister of Conservation must consider.</p>
<p>We will have to see how this 'sub judice' breach plays out for Joyce, given his party and Prime Minister have no problem with John Banks and his unknowingly non-anonymous donations.</p>
<p>However, I could not think of a better reason to reject the proposal for mining access over conservation land to be a joint Ministers decision based on economics and conservation criteria, than Steven Joyce's attempted interference in the Environment Court and the Court of Appeal cases concerning the Escarpment mine.</p>Robin Johnson's Economics Web Pagehttp://www.blogger.com/profile/12924305800986441792noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-46608585822185600972012-09-26T08:24:00.000+10:002012-09-26T08:31:32.042+10:00Solid Energy and the declining price of coal; neither unforeseen or dramatic or a crash<p>On Monday Don Elder the Chief Executive of New Zealand's <a href="http://en.wikipedia.org/wiki/Solid_Energy">Solid Energy</a> confirmed that a major restructuring of the NZ coal miner would require closure of the <a href="http://www.nzherald.co.nz/index.cfm?objectid=10836211">Spring Creek underground mine</a> and the loss of <a href="http://www.radionz.co.nz/news/national/116514/hundreds-of-jobs-going-at-solid-energy">460 jobs</a> over the company.</p>
<p>This move had been signaled in advance, but it is still making most news broadcasts today. Elder attributes the need to downsize to trends in international coal prices. For example Elder <a href="http://www.3news.co.nz/Mothballed-mine-not-viable--Solid-Energy/tabid/421/articleID/270518/Default.aspx">told Radio New Zealand</a>;</p> <blockquote>an unforeseen, and dramatic, global price crash had rocked the industry.<br/>
<i>"In the second week of July the markets tanked, demand fell through the floor," he said. In up to six weeks the price plummeted 40 to 50 percent and did not show any sign of bouncing back anytime soon."</i></blockquote>
The new chair of the board of directors, <a href="http://www.scoop.co.nz/stories/BU1209/S00845/solid-energy-seeks-turnaround-in-extreme-downturn.htm">Mark Ford, said in a press release</a>;
<blockquote><i>“The price for Spring Creek’s semi-soft coking coal would need to be somewhere from NZ$180-200 a tonne for the operation to deliver a profit and pay off the investment made in it,” Mr Ford said. “International semi-soft contracts are now being made at around NZ$120 a tonne.”</i></blockquote>
<p>New Zealand PM <a href="http://en.wikipedia.org/wiki/John_Key">John Key</a> seems to have accepted the Elder view that prices are to blame.</p>
<a href="http://www.stuff.co.nz/business/industries/7723595/Solid-Energy-jobs-knife-to-cut-even-deeper"><i>"The issue isn't that we're not on their side, the issue is that international coal prices aren't on their side."</i></a></p>
<p><a href="http://www.stuff.co.nz/business/industries/7721401/222-staff-culled-at-Spring-Creek-mine"><i>"In the case of Solid Energy it's a victim of falling commodity prices."</i></a></p>
<p>The NZ media seem to have uncritically accepted the price explanation. In one story, Fairfax reported the reason for the mine closure and job losses as being due to a <a href="http://www.stuff.co.nz/the-press/business/7722523/Solid-Energy-axes-hundreds-of-jobs">severe downturn in global coal prices</a></p>
<p>Not so, "Chalkie", of the Fairfax NZ business section. "Chalkie" took Solid Energy to task for <a href="http://www.stuff.co.nz/business/opinion-analysis/7613703/High-hopes-end-with-some-harsh-reality">blaming their troubles entirely on the international coal price</a>. Chalkie also satirised Elder's cornucopian <a href="http://en.wikipedia.org/wiki/Think_Big">Think Big</a>-style <a href="http://en.wikipedia.org/wiki/Solid_Energy#Lignite_conversion_proposals">lignite and coal-gas proposals.</a></p>
<p>Chalkie says he doesn't believe Elder has credibility when he says current coal prices in NZ$ are 20% lower than at the bottom of the 2008 global financial crisis. Chalkie points out that Elder's quoting of a coal price of $330 USD per tonne, as the top of the price mountain that the price has now fallen off, is just unrealistic.</p>
<p>In June 2011, a record price of $US330 a tonne for Australian hard coking coal, was reached because of supply shortages following the <a href="http://www.smh.com.au/business/markets/coal-prices-on-the-rise-as-more-rain-looms-20111012-1ljpm.html">January 2011 Queensland floods which drowned most of Queensland's coal mines.</a></p>
<p>Chalkie also notes that a coking coal price of $USD126 a tonne is still well above the norm before the GFC. I have complied some prices for Australian hard coking coal. <a href="https://docs.google.com/open?id=0B8LhMBA3NXL4dUF6RnVTUmh6ejA">Data at Google Docs</a>. Coking or metallurgical coal is used in steel making, and usually trades at a premium price above 'thermal' coal supplied to power stations. I prepared a chart of prices per tonne in $USD from 2006 to 2012. Spring Creek Mine coal is 'semi-soft' coking coal, which I think means its price is not quite the same as coking coal, but still more than thermal coal.</p>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh23eFZDTeBTr9qeo7pOMS6NOBPav67EJwYhftb65RW-ZL3IG_fervlkp6qaL11D15VXzYOr4MhlRPDY6SLmIHmzjQcyyYmQTPhTKwmRLzVGvSVA-ZFQ5-TgAhdLogQSgV_-ZRSUE1Y7aA/s1600/coking-coal-price-2006-2012.png" imageanchor="1" style="margin-left:1em; margin-right:1em"><img border="0" height="308" width="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh23eFZDTeBTr9qeo7pOMS6NOBPav67EJwYhftb65RW-ZL3IG_fervlkp6qaL11D15VXzYOr4MhlRPDY6SLmIHmzjQcyyYmQTPhTKwmRLzVGvSVA-ZFQ5-TgAhdLogQSgV_-ZRSUE1Y7aA/s400/coking-coal-price-2006-2012.png" /></a></div>
<p>The post Queensland flood price of $USD330 a tonne sticks out as a spike or outlier as does the 2008 high of $USD250 tonne, which also followed a La Nina mine flooding event. Coal producers might not want to know about global warming, but global warming certainly knows about Queensland's coal mines.</p>
<p>And here is a chart of 2012 monthly hard coking prices in $USD. <a href="https://docs.google.com/open?id=0B8LhMBA3NXL4cG00NVlmT3FCSms">The data</a>.</p>
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<p>The price for Aussie had coking coal has fallen consistently in 2012. However,there is no cliff the price has fallen off in July 2012. The hard coking coal price did not plummet 40 to 50 percent in 6 weeks as Dr Elder says. The price trend is neither "unforeseen" nor "dramatic" and nor is it a "crash".</p>
<p>It's not hard to find reasons for the decline in the price. of coal. <a href=" http://www.reuters.com/article/2012/09/12/metcoal-outlook-idUSL5E8KB9WN20120912">Reuters reports a number of reasons</a>. Demand for coal is down in China. While the floods stopped the Aussie supply, steel makers looked to substitute other suppliers. Mongolia is increasingly eating into Australia's share of coal exports to China.</p>
<p>Chalkie also notes that the Huntly East underground mine has had some safety issues. Work to install a $NZ40 million ventilation tunnel, the sort of thing Dr Elder criticised Pike River Coal for not having, stopped in August 2012. Could it be that Solid Energy is using the international coal price as an excuse to avoid spending the money needed to make its underground mines as safe as the public now expect in a post-Pike River Coal disaster world?</p>
<p>Chalkie also notes a <a href="http://en.wikipedia.org/wiki/Field_of_Dreams">"field of dreams"</a> approach to the Taupo wood pellet plant, (later written down in value by $NZ30 million) and delays in the Mataura lignite briquette plant. Given the execution of these smaller projects, Chalkie questions Solid Energy's ability to deliver on the grander lignite conversion plans.</p>
<p>I will leave the last word to Chalkie.</p>
<blockquote><i>Every day at 8.30am sharp, management at Solid Energy would gather for morning prayers at the company shrine.<br/>
The small room was dominated by a huge gleaming slab of coking coal, etched with phrases from an early foreign exchange hedge contract. The dozens of executives stood facing it, arms by their sides, palms turned towards the slab in unison.<br/>
It was always a brief, uplifting affair. The CEO would begin with a chant: "Every day in every way, we expect coal prices to rise."<br/>
The executives would respond: "And rise they shall."<br/>
CEO: "With wood pellets and lignite we will rule."<br/>
Response: "Nothing bad will happen."<br/>
CEO: "Our big ideas are worth squillions."<br/>
Response: "Yes, probably more."<br/>
CEO: "Gentlemen, make it so."<br/>
And with that they would shuffle out shiny-cheeked into the morn</i>.</blockquote> Robin Johnson's Economics Web Pagehttp://www.blogger.com/profile/12924305800986441792noreply@blogger.com2tag:blogger.com,1999:blog-7263129089232513980.post-85618788354944078252012-09-11T15:02:00.000+10:002012-09-11T15:05:58.271+10:00New Zealand Aluminium Smelter Ltd do a Godfather; Nice smelter you got. Be a shame if something happened to it<p><img style="float: left;margin-right: 10px;padding-top: 5px" src="http://hot-topic.co.nz/wp-content/uploads/2012/09/godfather-350881-150x150.jpg" alt="The Godfather" width="150" height="150" /> <em>Robin Johnson's Economics Web Page argues that Rio Tinto-owned New Zealand Aluminium Smelters Ltd, the owner of the Tiwai Point aluminium smelter, is "Godfathering" the smelter, its workforce, the Southland economy, the NZ electricity market, Meridan Energy and the poor critically endangered slow-breeding kakapo, as well as "Godfathering" the NZ emissions trading scheme to get excessive free allocations of emissions units.</em></p>
<p>I have invented a new term for climate change blogging.</p>
<p align="center"><b>Godfathering!</b></p>
<p>Its a bit like <a href="http://en.wikipedia.org/wiki/New_Zealand_Emissions_Trading_Scheme#Issuing_the_permits:_.27grandfathering.27_vs_auctions">Grandfathering</a>, which is a bit of jargon from <a href="http://en.wikipedia.org/wiki/Emissions_trading"">emissions trading</a>. But different. Grandfathering in an <a href="http://en.wikipedia.org/wiki/Emissions_trading_scheme#Definitions">emissions trading scheme</a> (an ETS), is giving the emission units for free to the existing emitters in the ETS on a historic pro-rata calculation.</p>
<p>The units of course representing the desired cap on emissions. Alternatively the units could be sold by auction to emitters which is logical if we treat the units as shares in a public commons owned by the Government on behalf of citizens.</p>
<p>Of course our <a href="http://en.wikipedia.org/wiki/Emissions_trading_scheme">NZETS</a> is not so simple. If our NZETS just applied simple "grandfathering" as outlined, then it <a href="http://en.wikipedia.org/wiki/New_Zealand_Emissions_Trading_Scheme#Lack_of_a_cap_on_emissions">would have a real cap</a>, it would not allow <a href="http://hot-topic.co.nz/nz-ets-you-are-the-weakest-international-link/">importing of unlimited international units</a>, and it would be impossible for any emitter to receive more units than their emissions.</p>
<p>Thats not the case under the NZETS, at least for some emitters. In 2010, the <a href="http://en.wikipedia.org/wiki/Rio_Tinto_Aluminium">Rio Tinto Alcan</a> subsidiary <a href="http://en.wikipedia.org/wiki/New_Zealand_Aluminium_Smelters_Limited">NZ Aluminium Smelters Ltd</a>, which is roughly New Zealand's third largest point source of greenhouse gas emissions, was a net seller of units, not a net payer. Their <a href="http://hot-topic.co.nz/120-pure-subsidy-part-2/">free allocation of units was 135% more</a> than the units they needed to surrender for their emissions.</p>
<p>That's excessive. The justification given for this is that in order to maintain their export competitiveness, NZ Aluminium Smelters Ltd needed to be compensated for the rather unfathomable and diluted ETS costs that may flow through their secret contract with <a href="http://en.wikipedia.org/wiki/Meridian_Energy">Meridian Energy</a> and the electricity wholesale market. I will come back to this later in the post.</p>
<p>Let me update the smelter emissions and unit allocations for the 2011 year.</p>
<p>In 2011, NZ Aluminium Smelter Limited produced <a href="http://www.radionz.co.nz/news/business/97396/aluminium-record-set-in-2011">354,030 saleable tonnes</a> of aluminium. The <a href="http://www.epa.govt.nz/Publications/Section_89_CE_Reporting2012.pdf">2011 Ministry of Economic Development Chief Executive's Report</a> shows that the New Zealand aluminium manufacturing sector (a.k.a. NZ Aluminium Smelter Ltd) reported emissions of 601,370 tonnes CO2-e for the 2011 year. We divide by two for the 'two tonnes for one unit' deal, and that results in 300,685 units to surrender.</p>
<p>The NZ Ministry for the Environment allocated <a href="http://www.climatechange.govt.nz/emissions-trading-scheme/participating/industry/allocation/decisions/index.html">437,681 units to NZ Aluminium Smelter Ltd</a> for the 2011 calendar year.</p>
<p>That's 136,996 more units allocated than surrendered or alternatively the units allocated to NZ Aluminium Smelter Ltd exceeded the units surrendered by 146%.</p>
<p>So that's even more excessive than 2010's 135% over-allocation!</p>
<p>How did NZ Aluminium Smelter Ltd achieve that beneficial treatment under the NZETS? Simple really. They <a href="http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10509681">threatened to close the smelter</a> and move production offshore if the NZETS really imposed a real carbon price on them.</p>
<blockquote><i>"Thats a nice aluminium smelter you got. Be a shame if something happened to it."</i></blockquote>
<p>Now thats what I call "Godfathering"! But wait there is more.</p>
<p>In July, NZ Aluminium Smelters <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10818435">announced an annual loss</a>.</p>
<p>The smelter CEO Ryan Cavanagh said the smelter's financial difficulties were due to <a href="http://www.3news.co.nz/Fresh-fears-for-future-of-Bluff-aluminium-smelter/tabid/421/articleID/268150/Default.aspx">falling world aluminium prices</a>. And that they needed to revise their <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10825848">electricity supply contract with Meridian Energy</a> to get input costs down.</p>
<p>A day later, the parent company Rio Tinto Alcan indicated what may happen to it's unprofitable smelters. <a href="http://www.scoop.co.nz/stories/BU1208/S00381/rio-tinto-eyeing-smelter-closures-unless-they-pay-their-way.htm">They will be shut down</a>. No pressure, Meridian Energy!</p><blockquote><i>"Thats a nice aluminium smelter you got. Be a shame if something happened to it."</i></blockquote>
<p>According to New Zealand Herald economics editor Brian Fallow, if the smelter closes, there could be a <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10827160">"seismic" knock-on effect on the electricity market</a>. Supply would exceed demand by the 14% of New Zealand's electricity generation used by the smelter. Wholesale electricity prices would react. Some generation assets might be crowded out.</p><blockquote><i>"Thats a nice wholesale electricity market you got. Be a shame if something happened to it."</i></blockquote>
<p>Brian Fallow notes the electricity contract with Meridian Energy, that the smelter wishes to renegotiate, represents 40% of Meridian's sales. Closure of the smelter or renegotiation of the contract put the <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10827160">spanner of uncertainty</a> into the Government's planned partial sale of Meridian and the other generators.</p><blockquote><i>"Nice plan for partial privatising some state-owned power generators you got. Shame if something happened to it."</i></blockquote>
<p>The closure of the smelter would also have an impact on the local <a href="http://en.wikipedia.org/wiki/Invercargill">Invercargill</a> and <a href="http://en.wikipedia.org/wiki/Southland_Region#Economy">Southland</a> regional economy.</p><blockquote><i>"Nice regional economy you got. Shame if something happened to it.</i>"</blockquote>
<p>Next we hear that the smelter is <a href="http://www.stuff.co.nz/the-press/business/7621977/Smelter-fast-tracks-65-redundancies">fast-tracking the redundancies of it's highly-trained and highly-paid workforce</a>.</p><blockquote><i>"Nice well-trained professional smelter labour force you got. Shame if something happened to it."</i></blockquote>
<p><img style="float: left;margin-right: 10px;padding-top: 5px" src="//upload.wikimedia.org/wikipedia/commons/6/6d/Strigops_habroptilus_1.jpg" alt="Strigops_habroptilus" width="200" height="150" />And NZ Aluminium Smelter also wants to <a href="http://www.stuff.co.nz/southland-times/news/7575342/Smelter-clouds-kakapo-future">withdraw from partly funding</a> the successful <a href="http://en.wikipedia.org/wiki/Kakapo">Kakapo</a> Recovery Programme.</p><blockquote><i>"Nice charismatic endangered species programme you got. Shame if something happened to it."</i></blockquote>
<p>That's a lot of Godfathering!</p>
<p>Let's look at New Zealand Aluminium Smelter's electricity use and costs in 2011. How much do they use? How much do they pay? Does their power cost justify extra allocations of emissions units? Is it realistic for New Zealand Aluminium Smelter to try to get Meridian Energy to give them cheaper power? </p>
<p>New Zealand electricity use data is available from the <a href="http://www.med.govt.nz/sectors-industries/energy/energy-modelling/publications/energy-data-file/new-zealand-energy-data-file-2012">Energy Data File 2012</a>. The specific data is Spreadsheet G worksheet G.6.a. now at stored <a href="https://docs.google.com/open?id=0B8LhMBA3NXL4N25PYUROWmpHVlk">Google Docs</a>.
<p align="aligncenter"><img src="http://hot-topic.co.nz/wp-content/uploads/2012/09/electricity2011-600x600.png" alt="Electricity use by sector 2011" width="450" height="450" class="size-full wp-image-11892" /></p>
<p>This dotchart is of electricity use data from the <a href="https://docs.google.com/open?id=0B8LhMBA3NXL4N25PYUROWmpHVlk">sheet G worksheet G.6.a.</a>
<p>The chart makes it very clear that the Tiwai Point Smelter is, by a huge margin, the biggest single consumer of electricity in New Zealand. A single company at a single plant used 5.3 million MWh out of 38.8 million MWh consumed in 2011, or 13.67% of the total consumption. Only the combined 4.4 million people in homes (the residential sector) used more, with 13 million MWh or 33% of the total. If we just look at industrial use of electricity, and leave out the residential sector, the smelter uses 20.6% of all electricity used by industry.</p>
<p align="aligncenter"><a href="http://hot-topic.co.nz/wp-content/uploads/2012/09/electricityckwh2011-600x600-16pt.png"><img src="http://hot-topic.co.nz/wp-content/uploads/2012/09/electricityckwh2011-600x600-16pt.png" alt="Electricity sales price by sector 2011" width="450" height="450" class="size-full wp-image-11894" /></a></p>
<p>This chart shows industrial electricity sectors sorted by average rate (including line costs) in cents per kilowatt hour (i.e. its MWh divided by sales $$ times 100). You need to look at the bottom left hand corner for aluminium smelting, not the top. Thats because NZ Aluminium Smelter Ltd pays the very lowest average rate for electricity in New Zealand; 5.03 cents! Residential users pay 22.6 cents per KWh, or four times as much.</p>
<p>No industry in New Zealand uses more electricity than New Zealand Aluminium Smelters. No industry pays less per unit for electricity than they do. They even get excessively allocated emissions units to help with the lowest priced power contract in New Zealand. And now New Zealand Aluminium Smelters are going for "Godfather" gold by trying to bully their power price even lower.</p>Robin Johnson's Economics Web Pagehttp://www.blogger.com/profile/12924305800986441792noreply@blogger.com0tag:blogger.com,1999:blog-7263129089232513980.post-32707057968957549832012-09-03T22:33:00.000+10:002012-09-03T22:34:08.993+10:00How fast shall we drive over the cliff? More amendments to the New Zealand Emissions Trading Scheme<div class="separator" style="clear: both; text-align: center;"><a href="http://hot-topic.co.nz/wp-content/uploads/2012/09/thelma.jpg" imageanchor="1" style="clear:left; float:left;margin-right:0.5em; margin-bottom:0.5em" ><img src="http://hot-topic.co.nz/wp-content/uploads/2012/09/thelma-150x150.jpg" alt="How fast shall we drive over the cliff" width="150" height="150" class="size-thumbnail wp-image-11777" /></a></div>
<p><em><a href="http://rwmjohnson.blogspot.co.nz/2012/09/how-fast-shall-we-drive-over-cliff-more.html">Robin Johnson's Economics Web Page</a> looks at at the Government's amendments to the New Zealand Emissions Trading Scheme and concludes we are arguing about what gear to drive in as we speed towards the cliff. The Government has kindly given us the opportunity to make a submission about how fast fast we should go over the emissions cliff. Time to fasten your seatbelts.</em></p>
<p>Back in July, New Zealand Minister for Climate Change Issues <a href="http://www.national.org.nz/MP.aspx?Id=15702">Tim Groser</a> announced <a href="http://www.beehive.govt.nz/release/government-announces-ets-amendments">more watering-down</a> of the <a href="http://en.wikipedia.org/wiki/New_Zealand_Emissions_Trading_Scheme">New Zealand Emissions Trading Scheme (NZETS)</a>.</p>
<p>About a week ago, on 23 August 2012, <a>Groser introduced the amending legislation</a> - the <a href="http://www.legislation.govt.nz/bill/government/2012/0052/latest/versions.aspx">Climate Change Response (Emissions Trading and Other Matters) Amendment Bill</a>.</p>
<p>Consistent with previous New Zealand emissions trading scheme legislation, the bill will be fully and rationally considered by Parliament's <a href="http://www.parliament.nz/en-NZ/PB/SC/MakeSub/6/8/c/50SCFE_SCF_00DBHOH_BILL11566_1-Climate-Change-Response-Emissions-Trading.htm">Finance and Expenditure Select Committee</a> in an insultingly short period of time - ten working days. The closing date for public submissions is Monday, 10 September 2012.</p>
<p>What does this NZETS amending bill do?</p>
<ul><li>It <a href="http://www.3news.co.nz/Greens-slam-climate-change-bill/tabid/1607/articleID/266531/Default.aspx">indefinitely postpones the entry</a> of pastoral agriculture into the NZETS.</li>
<li>The 'two-for-one' deal, which halved the number of carbon credits each emitter had to surrender for a tonne of carbon dioxide equivalent greenhouse gases, is <a href="http://www.3news.co.nz/NZ-delays-timing-of-higher-ETS-costs/tabid/1160/articleID/259856/Default.aspx">extended for another three years</a>. It was to end on 31 December 2012, but will now run on at least to 2015.</li>
<li>The price cap of $12.50 per tonne ($25 for two tonnes) will also extended. It was to end on 31 December 2012, but will now run on at least to 2015.</li></ul>
<p>What doesn't the bill do?</p>
<ul><li>It ignores the recommendation from the 2011 ETS review committee to stop the unlimited use of international carbon credits by New Zealand emitters. Which as we know, makes the <a href="http://hot-topic.co.nz/nz-ets-you-are-the-weakest-international-link/">NZETS the weakest link</a>.</li></ul>
<p>Whats the cliff we are driving off? Well, it's climate change. And it's the price of the New Zealand emissions unit.</p>
<p><a href="http://hot-topic.co.nz/wp-content/uploads/2012/09/nzuprice.png"><img src="http://hot-topic.co.nz/wp-content/uploads/2012/09/nzuprice.png" alt="" width="450" height="209" class="size-full wp-image-11809" /></a> NZ Unit price 2009 to 2012 from <a href="https://www.commtrade.co.nz/">OMF Financial Ltd</a></p>
<p>Who said what about the bill?</p>
<p>Simon Terry of the Sustainability Council said that the NZETS is now in a state of <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10818962">eternal transition"</a>.</p>
<p>Former PM Helen Clark stated the obvious, that pastoral agriculture must be in the NZETS; <a href="http://www.3news.co.nz/Farmers-need-to-come-under-Emissions-Trading-Scheme---Helen-Clark/tabid/418/articleID/266321/Default.aspx">“You can’t have your major sector generating greenhouse gases outside the scheme."</a></p>
<p>Federated Farmers said the deferral of agriculture was <a href="http://www.hawkesbaytoday.co.nz/news/farmers-and-environment-win-with-ets-amendments/1500037/">huge win for New Zealand's farmers</a></p>
<p>Business New Zealand seem unusually silent. I guess for them it is all going to plan. Back in July they welcomed Tim Groser's announcement of the <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10817072">delays to the NZETS</a>. So why waste space repeating the message?</p>
<p>However, I do offer some relief from this dreary <em>"business-as-usualism"</em>.</p>
<p>Green MP <a href="http://www.greens.org.nz/people/kennedygraham">Kennedy Graham</a> has given some strong speeches accurately reflecting both the scientific reality of the cumulative carbon dioxide emissions and the ethical challenge of the failure of politics and governance to respond.</p>
<p>None more so than in his <a href="http://www.greens.org.nz/speeches/kennedy-grahams-speech-climate-change-response-emissions-trading-and-other-matters-amendmen">'first reading' speech</a> in which he summed up the bill thusly.</p>
<blockquote>
<em>"Today's bill will defer agriculture indefinitely, defer any increase in the price cap, defer the one-for-one surrender obligation, allow a greater switch from forestry to dairying, and enable importers to increasingly use dangerous synthetic gases. What remarkable, steel-like resolve!"</em></blockquote>
<p>I do recommend you read <a href="http://www.greens.org.nz/speeches/kennedy-grahams-speech-climate-change-response-emissions-trading-and-other-matters-amendmen">Kennedy Graham's speech in full</a>.</p>
<p>Graham, a much more experienced diplomat than Tim Groser, walks us through more than 20 years worth of futile international climate change negotiations, all the while as the relentless accumulation of emissions in the atmosphere uses up the carbon budget consistent with limiting warming to two degrees. And with no faux-realist "get people on the bus" cliches we have come to expect from Tim Groser.</p>
<p><a href="http://www.greens.org.nz/recommended-bills/climate-change-response-emissions-trading-and-other-matters-amendment-bill">Kennedy Graham concludes</a> that we don't have to accept this state of affairs. He calls on us to make a <a href="http://www.parliament.nz/en-NZ/PB/SC/MakeSub/6/8/c/50SCFE_SCF_00DBHOH_BILL11566_1-Climate-Change-Response-Emissions-Trading.htm#captcha">submission to the Finance and Expenditure Select Committee</a>.</p>
<p>Greenpeace are also saying <a href="http://www.greenpeace.org/new-zealand/en/take-action/Make-submission-on-the-ETS/?utm_source=MailingList&utm_medium=email&utm_campaign=ETS_ACTION">get stuck in with a submission</a>. What to say? </p>
<p>How about <em>"the NZETS is completely ineffective in reducing GHG emissions due to it's many design flaws - the use of unlimited international junk credits, the delays and exemptions, the partial coverage, the lack of a cap, the price ceiling, the lack of revenue recycling due to the excessive free allocation to emitters."</em> </p>
<p>Something brief and to the point.</p>
<p>However, I will leave the last word to <a href="http://tvnz.co.nz/q-and-a-news/panel-smith-norman-debate-6-56-video-4406033#">Jeanette Fitzsimons speaking on TV Ones's Q+A: Panel</a> after a Nick Smith/Russel Norman debate back in September 2011.</p>
<p><em>"Look, its like we are in a very fast car, we are heading towards a cliff, which is getting really close, and we are arguing whether to change from fifth to fourth gear".</em></p>
Robin Johnson's Economics Web Pagehttp://www.blogger.com/profile/12924305800986441792noreply@blogger.com0