Turn off Meridian open letter to Mark Binns on why I am divesting from coal-pushing Meridian Energy

When is a renewable electricity generator not a renewable electricity generator? Or what do you do when the electricity generator who are claiming to supply your home with 100% renewable electricity enters into a commercial contract that keeps a coal-thermal power station emitting carbon dioxide for an additional four years?

Meridian Energy has recently signed a contract with Genesis Energy to keep the Huntly coal thermal power station open for four more years instead of closing in 2018.

New Zealand has made some predictions of future reductions in emissions that we have confidently sent off to the United Nations Framework Convention on Climate Change (UNFCCC). Unfortunately Meridian's action has had the effect of sending the emissions savings up in a puff of coal smoke.

So I decided to divest from Meridian Energy and move my account to electricity supplier to Ecotricity who own only 100% renewable generation capacity and who are certified as carbon neutral. I used the Consumer Power Switch website. There is also Whats my number web site.

I thought I should let Meridian Energy know I was voting with my account so I sent this open letter to Meridian Energy two weeks ago on 16 June 2016. I have not yet received a reply.

Mark Binns
Chief Executive
Meridian Energy Limited
PO Box 2128
Christchurch 8140

16 June 2016

Re: Meridian Energy’s support for four more years of thermal coal electricity carbon dioxide emissions from Huntly Power Station

Dear Mr Binns,

I am a Meridian retail customer. My customer number is TrJ5I19vcteK2 My account number is 1.h@"]41Y6x#5-r.

I consider climate change to be a serious risk that we are all morally obliged to respond to. In 2012 I deliberately chose Meridian as my electricity retailer because of it's 100% renewable generation.

I am aware that to some extent the electricity I consume inevitably draws on some fossil-fueled capacity due to the networked nature of the grid. However, I was satisfied that choosing Meridian as my retailer was the best I could do in terms of reducing carbon dioxide emissions as I would not be contributing my money to any fossil-fueled thermal generation. In the past four years I have been very happy with that choice and with the service I have received from Meridian. Unfortunately, I did not know that Meridian had a contract with Genesis to keep the Huntly coal thermal power station operating to 2018.

On 28th April 2016, Meridian Energy announced that it had signed a new contract with Genesis Energy that would keep the Huntly coal thermal power station operating for an extra four years. This contract therefore postpones the expected closure from the planned 2018 date to 2022. I have read the statement on the Meridian website explaining the contract as a means of reducing the risk of low levels in the hydro lakes. The explanation fails to take climate change seriously.

The Fifth Assessment Report of the IPCC sets out very simply the carbon budget consistent with limiting global warming to less than two degrees Celsius. The global warming we will experience will be linearly proportional to the cumulative volume of carbon dioxide emissions emitted by humanity. To prevent further dangerous levels of warming with a reasonable probability, cumulative emissions cannot exceed the carbon budget. At that point, emissions must not exceed net zero.

As a matter of physics, the additional emissions that will come from Huntly for the extra four years will result in higher and more dangerous eventual global warming. Meridian Energy's actions have facilitated these additional emissions.

I find Meridian’s actions to be completely contrary to the IPCC's finite carbon budget conception of mitigation and with Meridian’s previous statements on renewable electricity. Those statements now appear very shallow and insincerely held to say the least.

Therefore, it gives me some satisfaction to inform you I am moving my electricity account to a 100% renewable electricity generator who has carbon neutral certification and who is not a party of the Huntly contract. It is my sincere wish that as many customers as possible who are concerned about climate change also leave Meridian.

Yours sincerely

The Huntly power station decision - energy emission reductions to 2020 up in coal smoke

The decision to keep the Huntly coal thermal power station open for another four years is not only contrary to all New Zealand's commitments and climate targets, it also sends the Ministry for the Environment's projections of stabilising energy emissions to 2020 up in a cloud of coal smoke.

We seem to have had an extra dose of announcements and activities about climate change in an action-packed month of April.

We have had our Minister, Paula Bennett, signing the UN Paris Agreement. The Morgan Foundation's "Climate Cheats" report made a big splash. That lead to Jack Tame's grilling interview of Paula Bennett. Then the Royal Society of New Zealand released two major reports on climate change; one on impacts and another on policy responses. The business-backed Pure Advantage group released a report on enhancing forestry sequestration.

So what did the New Zealand energy industry do to elbow it's way into the climate change spotlight? How do you beat signing the Paris Agreement or compete with climate fraud?

Well, you just say you are going to burn more coal!

On 28th April 2016, Genesis Energy and Meridian Energy announced they had reached an 'arrangement' that would keep the coal-burning Huntly thermal power station open for an extra four years. This deal postpones the expected shut down from the planned 2018 date to 2022.

Patrick Smellie notes two interesting details of the story. First, the irony that the "100% renewable" generator Meridian Energy has led the process of negotiating with Genesis. And second, that the public announcement of the shut-down by Genesis was just 'code' for negotiating a higher price from other generators.

The Green Party's Gareth Hughes points out that on the basis of Huntly's generation of 1,277 GWh of energy in 2015, the closing of Huntly would have lifted New Zealand's proportion of renewable electricity generation from 79.9 percent to 84.5 percent. So unsurprisingly the Meridian-Genesis deal is just 180 degrees in the wrong direction in terms of the 90 percent renewable target and the need to reduce greenhouse gas emissions.

Greenpeace has given us ten reasons to shut Huntly and have started an on-line petition to keep to the plan and shut Huntly.

But what effect will this have on the Ministry for the Environment's projections of energy emissions out to 2030? These are part of the December 2015 report "NZ’s Second Biennial Report under the UNFCCC". This chart shows projected "with measures" emissions and "without measures" (i.e. business as usual).

In the chart, the projected "with measure" emissions for each sector are the circles and lines. The projected 'business as usual'/'without measures' emissions are the lines between the data points marked by triangles on 2020 and 2030. That's because the without measures projections are for only two years! It is almost as if they are an after-thought.

The other thing to note is that for agriculture, transport and industry, there is no difference between "with measures" and "without" projections. This is of course because the Ministry is reflecting the Government's intention to exempt those three sectors of the economy from any climate change policy.

However, have a close look at the energy sector projections. There is some 'daylight' visible between the 'with' and 'without' projections. The "without" trends ever so slightly upward and the "with" trend is a plateauing. So something is expected to change the slight upward emissions trend to a plateau. The Biennial Report states on page 39;

"Energy emissions are expected to increase between 2013 and 2015, but then fall between 2015 and 2020. The remaining coal-fired power plant in New Zealand is expected to be decommissioned by 2018, reducing emissions from coal. Coal-fired electricity generation is expected to be replaced mainly by a combination of hydroelectricity, geothermal, wind, and gas-fired peaking plants in the modelled scenario".

In other words, the 'something' was the closing of Huntly. The Ministry for the Environment was relying on Genesis Energy to honour its public statement that it was closing Huntly. Which of course would then be attributed to the New Zealand emissions trading scheme. However it looks like the projections are now out-dated.

Conclusion

The 2030 emissions projections show that New Zealand's climate change policies are intentionally not affecting three out of five sectors of the economy. Now with two power generators reaching a private agreement to keep an non competitive asset, Huntly thermal power station, emitting for four extra years, the projected savings in energy emissions out to 2030 have gone up in a puff of coal smoke.

Solid Energy and the declining price of coal; neither unforeseen or dramatic or a crash

On Monday Don Elder the Chief Executive of New Zealand's Solid Energy confirmed that a major restructuring of the NZ coal miner would require closure of the Spring Creek underground mine and the loss of 460 jobs over the company.

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 told Radio New Zealand;

an unforeseen, and dramatic, global price crash had rocked the industry.
"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."

The new chair of the board of directors, Mark Ford, said in a press release;

“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.”

New Zealand PM John Key seems to have accepted the Elder view that prices are to blame.

"The issue isn't that we're not on their side, the issue is that international coal prices aren't on their side."

"In the case of Solid Energy it's a victim of falling commodity prices."

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 severe downturn in global coal prices

Not so, "Chalkie", of the Fairfax NZ business section. "Chalkie" took Solid Energy to task for blaming their troubles entirely on the international coal price. Chalkie also satirised Elder's cornucopian Think Big-style lignite and coal-gas proposals.

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.

In June 2011, a record price of $US330 a tonne for Australian hard coking coal, was reached because of supply shortages following the January 2011 Queensland floods which drowned most of Queensland's coal mines.

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. Data at Google Docs. 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.

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.

And here is a chart of 2012 monthly hard coking prices in $USD. The data.

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".

It's not hard to find reasons for the decline in the price. of coal. Reuters reports a number of reasons. 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.

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?

Chalkie also notes a "field of dreams" 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.

I will leave the last word to Chalkie.

Every day at 8.30am sharp, management at Solid Energy would gather for morning prayers at the company shrine.
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.
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."
The executives would respond: "And rise they shall."
CEO: "With wood pellets and lignite we will rule."
Response: "Nothing bad will happen."
CEO: "Our big ideas are worth squillions."
Response: "Yes, probably more."
CEO: "Gentlemen, make it so."
And with that they would shuffle out shiny-cheeked into the morn.

Neil Armstrong coal mines and global warming the NZ High Court moon walks us to a very hot place

On the same day as the death of Neil Armstrong, the first astronaut to step onto the Moon, became public, the New Zealand High Court moon-walked its way to it's own off-the-world moment. It decided that greenhouse gas emissions and global warming are off-limits in the planning for an open cast coal mine. That's as just as 'out of this world' as denying that the Moon landings ever happened.

On Saturday, two bits of news struck home to me very strongly. The first was the death of moon-landing astronaut Neil Armstrong. The second was the decision of the New Zealand High Court that for new open-cast coal mines, their carbon dioxide emissions and global warming are legally and jurisdictionally unrelated in the Resource Management Act.

The moon landing. I remember very well as a seven year old listening attentively to the 'one small step' broadcast in 1969. The whole class was silent under the spell of our teacher's scratchy transistor radio.

It's one of my most strongly held memories of my childhood. I guess that reflects well on that class of seven-year olds. They stopped playing bullrush, sniffing with colds, and fighting over play-lunchs to listen attentively to the unfolding of one of humanity's most historic moments.

While I was still fondly remembering the Moon landing, the next news item struck.

It was the New Zealand High Court decision barring discussion of carbon dioxide emissions when coal mines seek Resource Management Act consents (see Radio NZ, NBR and TV3 and the Otago Daily Times).

Of course this is about the Perth coal company Bathurst Resources and their Escarpment Mine Project.

Bryan Walker of Hot Topic has posted that this project represents New Zealand doing a Pontius Pilate and washing its hands of the emissions.

I have previously posted that the decisions by councils and the Environment Court to date reflect the zombie ETS infecting the Resource Management Act with climate madness.

My Saturday morning reverie of the Moon landing was rudely stopped and I sort of grumbled to myself;

"Open-cast coal mines and global warming are unrelated!! Thats about as sensible as saying the Moon landings were faked by NASA. Neil Armstrong would just have smacked someone in the face!"

From small half-asleep reactions, blog posts do grow. With the wee footnote that it was actually Buzz Aldrin who punched the Moon landing denier.

I could do a review of the legal issues, but that would be just more legal-climate yadda yadda. I will just note that back in the early 1990s, the Bolger National Government not only considered that greenhouse gas emissions were an adverse effect under the Resource Management Act; they also considered the RMA to be one of the main tools to deal with global warming.

As for the science of it, I will just point to a couple James Hansen charts from his The Case for Young People paper.

The first is cumulative emissions of carbon dioxide. Approving new coal mines adds to cumulative global emissions of carbon dioxide. The second chart shows likely scenarios for temperature. The more carbon dioxide accumulates, the higher the likely temperature.

The facts are that each time a new coal mine is approved, we are just adding to the temperature overshoot above two degrees.

Why is it that the High Court can't apply this simple logic? Why are we even in a position where the High Court can sever the undeniable link between new coal mines, the volumes of carbon dioxide accumulating globally, and the inevitable temperature rise? What has has happened to our legal and planning systems to make this sort of decision possible?

To me this outcome - where the global effects of more GHG emissions are legally severed from approval of a new coal mine - is just as 'out of this world' as denying that the Moon landings even happened.

The zombie ETS infects the RMA with climate insanity

The Environment Court won't consider James Hansen evidence on coal and climate change in the appeal against opencast coal mine consents

The New Zealand Emissions Trading Scheme ("NZETS") has become living-dead "zombie" legislation that infects other statutes with its own virulent climate change insanity. The example is a recent decision by the Environment Court that it can't consider climate change impacts of coal mining as described by James Hansen in the Forest and Bird appeal of the resource consents for the opencast 'Escarpment' coal mine.

The other week I saw the zombie genre film 28 Weeks Later on tv. The turning point in the film was when British actor Robert Carlyle kissed his wife and was instantly infected with the 'Rage Virus', which of course meant he had to turn into a homicidal-virus spreading-living-dead zombie who would then infect the rest of the surviving population of post-Rage Virus London. A great zombie movie movement!

For me, another much less amusing zombie moment, was last week's news from TVNZ, Radio NZ, the Otago Daily Times, and the Dominion Post, that the Environment Court had declared that climate change effects from coal mining will not be considered in Forest and Bird's appeal of the consents for the opencast coal mine the Escarpment_Mine_Project.

For background to the Escarpment Mine Project, including James Hansen's videotaped climate change evidence given to Jeanette Fitzsimons, and the conservation and biodiversity issues, see Claire Brownings Pundit post. And there is wildlife photographer Rod Morris' view that the mine proposal is simply ecological destruction on a massive scale. Botanist Alan Mark reminds us that the coal measure landscape of the Denniston Plateau is the only one left as Solid Energy have destroyed the other one - the Stockton Plateau.

According to the Dominion Post, Judge Newhook's decision was "that regulatory activity on the important topic of climate change is taken firmly away from regional government and made the subject of appropriate attention from time to time by central government by way of activity at a national level".

If we are at all unclear what that means, coal apologist and Stratera boss Chris Baker explains that this means the NZETS; "We have an emissions trading scheme, we are well ahead of our obligation internationally...".

The utter ill-logic of the "we have an ETS, more coal mining and exporting is okay" argument is that although the NZETS applies to all coal mined within New Zealand, all coal exported is exempted. Bathhurst Resources intends to export all the coal from the Escarpment Mine. So the application of the zombie NZETS to coal mining means that there will be no carbon price on the coal from the Escarpment Mine.

And this zombie effect of the NZETS in making coal "alive but dead" to a carbon price, then infects the application of our great sustainability-promoting externality-internalising Resource Management Act. The coal exports are "regulated" (in reality protected) by the NZETS. Therefore the RMA doesn't apply.

The consequence will be that the Environment Court will not be considering the effects of the Escarpment Mine on a level playing field. They will attempt to reach a broad overall judgement of what is sustainable. They will balance the economic effects of more export dollars and jobs on the West Coast against the many adverse environmental impacts on a unique coal measure ecosystem full of rare and endangered endemic species. But the scales of justice won't be fairly weighted, as the adverse impact and the externality of the greenhouse effect of the coal have already been taken off the adverse effects side of the ledger.

The NZETS is truly a ZOMBIE.

The Ministry has fallen

Bathhurst Resources and Solid Energy have successfully made a pre-emptive strike against the appeals of the council decisions to grant resource consents to Bathhurst Resources for their proposed open cast coal mine in the Mt Rochfort Conservation Area - the Escarpment Mine project.

Bathhurst Resources and Solid Energy have successfully obtained a declaration from the Environment Court that climate change effects from the combustion of the coal cannot be considered in the appeal of the resource consents.

TVNZ Climate change ruling irresponsible 

Forest and Bird - Court decision ignores serious threats of climate change

Otago Daily Times - Court will not consider climate change.

I am left wondering if the judge concerned bothered to attend one of James Hansen's talks last year?

The future of coal

Last Tuesday (17 May) I attended the Institute of Policy Study's Future of Coal symposium. For those who want to know what was said, Claire Browning gives a very good summary at the Pundit blog. Audio of the presentations, including Hansen and Elder can be listened to at the Science Media Centre The Science Media Centre has also summarised the presentations. Environment Commissioner Jan Wright's speech is on her website.

Elder's presentation, coming after Hansen, was a case of the ridiculous following the sublime. After his over view of climate change, Hansen spoke of the disconnect between the scientific understanding and the political rhetoric of governments and businesses. Elder's pro-lignite, pro-mining, "Solid Energy is sustainable" speech demonstrated Hansen's point perfectly. The disturbing thing about this is that Elder's narrative is no doubt accepted by the National Government and the business sector.

I rescued myself from depression about this when it occurred to me that Don Elder has a strong resemblance to John Clarke in his satirical dialogues with Bryan Dawe - particularly the The Front Fell Off interview.

Bryan Dawe. Dr Don Elder, thank for you being here to talk about coal, lignite and climate change.

John Clarke. You're welcome Bryan. I think its really important that New Zealand has a good open discussion about our future. I am very open minded about this. So I came here, against advice that it would be 300 to one with a lot of unthinking NIMBY proponents. Its all too often that a debate is started, such as last year's debate about further mining under Schedule 4 of the Crown Minerals Act to grow the economy. And that debate just becomes dominated with unthinking slogans such as "No mining in National Parks"..

Bryan Dawe. But Dr Elder, the Government did in fact propose to remove protection from thousands of hectares within Paparoa National Park that is on top of a coal seam!

John Clarke. We were just trying to start a discussion! The response was unthinking slogans like "No mining in National Parks" and "Keep the coal in the hole". To me that is the same level as "Leave the Asians in Asia". It was meant to be a discussion.

Bryan Dawe. But Dr Elder, isn't Jeanette Fitzsimons correct when she observes that seeking non-notified consents for your lignite briquette plant at Mataura shuts down any discussion or debate?

John Clarke. Well, she would say that! It's ridiculous! We are just trying to get a resource consent. Everyone wants their consent not notified. Everyone gets their lawyers to write to the council. Its just the same as you getting a consent for your garden trellis!

Bryan Dawe. Dr Elder, Dr Jan Wright, the Parliamentary Commissioner for the Environment, points out that you refused to give her information on the carbon content of your lignite process. How does that help with the discussion?

John Clarke. Well, Bryan, that was commercially sensitive information. Dr Wright may have set a competing lignite to fuel plant. She has qualifications in physics and chemistry, you know.

Bryan Dawe. Dr James Hansen, of NASA, has just presented the climate change case for the rapid phase out of coal and non-traditional fossil-fuels such as lignite, tar sands and oil-shale. What is your response to this?

John Clarke. Bryan, I am glad you have asked that, as are no doubt half the people here who now agree with me. We need to understand that there are a couple of billion poor people in less developed countries - who have not enjoyed several generations of energy-intensive wealthy lifestyles as we have - who want lignite briquettes but can't afford them. In light of that need, who are we in New Zealand, not to process the lignite into diesel and fertiliser that we can then substitute for imports from China

Bryan Dawe. Dr Elder, won't the development of a large scale lignite industry increase New Ziealand's annual carbon dioxide emissions by 25%, depending on the number of plants? Won't that contribute to global warming.

John Clarke. No Bryan, not at all. We have to think about this globally as Soild Energy does., We make the lignite into fuel and fertiliser in Southland. We stop importing fertiliser made from coal in China. Globally, there are less emissions as we have saved the transport emissions!

NZ coal consumption

Here's a chart just uploaded to Wikimedia of New Zealand's consumption of coal from 1878 to 2009.

Queensland floods do what NZETS cannot

It appears the the Queensland floods have done something the New Zealand Emissions Trading Scheme (NZETS) cannot do.

The New York Times reports that the floods have increased the price of coal.

Prices for export coal used to produce electricity and for making steel in Asia are hitting new highs, as Queensland's largest coal mines remain closed and railroad companies grapple with mudslides.

the price of metallurgical coal could eclipse record highs hit in 2008. Global prices for seaborne steel-making coal are approaching $300 a metric ton.


Thermal coal burned at power plants is also seeing production disruptions

James Hansen would approve, even though the Queensland rainfall is probably not one of his strategies in Options for near-term phaseout of CO2 emissions from coal use in the United States.

Powered by coal

Here's a CBS 60 minutes documentary featuring James Hansen and the CEO of Duke Energy, the USA's third largest coal thermal power plant owner. The CEO says he totally accepts that carbon dioxide contributes to global warming. However, his plan is to phase out coal over 40 years. CBS cut to Hansen who of course says "No new coal fired power plants and a phase out must take place in 20 years or less". CBS goes back to the CEO and ask him how much Duke has invested in carbon capture and sequestration. The answer is not a cent!