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Energy Companies, Greenhouse Gas Emissions—Lignite

Thursday 14 July 2011 Hansard source (external site)

Graham5. Dr KENNEDY GRAHAM (Green) Link to this
to the Minister of Energy and Resources

Does she agree with the Prime Minister, who said “companies like Solid Energy are growth companies and we want them to expand in areas like lignite conversion”?

SmithHon Dr NICK SMITH (Minister for the Environment) Link to this

GrahamDr Kennedy Graham Link to this

So when Ministers Smith and Carter expect the Advisory Group on Green Growth to advise how we can transition to a low-carbon economy, does she regard Solid Energy’s estimated annual carbon emissions of 10 million to 20 million tonnes from the lignite project—on top of our current 70 million tonnes—to be an opportunity or a threat to such a transition?

SmithHon Dr NICK SMITH Link to this

The first thing is that the Solid Energy proposal is for quite a small briquette plant. If we put that briquette plant into context, we see that over the last year, 14,000 megawatts of new renewable energy capacity has been consented. The briquette plant in energy terms is about one-thirtieth of that.

GrahamDr Kennedy Graham Link to this

Is the Acting Minister aware of her mistake during question time on 18 May, when she said that coalmining was not eligible for free emissions trading scheme credits, and does she now recognise that downstream processing of lignite into other products is eligible, so extracting coal would be indirectly subsidised by free credits?

SmithHon Dr NICK SMITH Link to this

The Climate Change Response Act provides for an allocation for particular industries that are competitiveness-exposed. I in my role as the Minister for the Environment—not the Acting Minister—would have to make a decision as to whether those tests would be met. There is currently no application, so it is quite premature to be speculating on whether they would be eligible.

GrahamDr Kennedy Graham Link to this

How does the Acting Minister reconcile the statement made by Minister English that the Government would look favourably at helping fund Solid Energy’s multimillion-dollar lignite projects in Southland as long as they were commercially and environmentally robust, with the statement made by Minister Smith that “the world spends hundreds of billions of dollars a year subsidising fossil fuels and pollution. If we are serious about addressing climate change in the most efficient way, we need to be discussing a phase out of such support.”?

SmithHon Dr NICK SMITH Link to this

The member takes the Minister of Finance’s comments quite out of context. They were not in the form of any subsidy for Solid Energy but, rather, to people’s making a choice to invest in that company. In terms of the broader question of New Zealand’s “clean, green” brand and the use of lignite, I draw to the attention of the House that New Zealand’s use of lignite per capita is less than one-fiftieth of Australia’s, less than one thirty-sixth of Germany’s, and less than one-sixteenth of Canada’s—that is, New Zealand’s use of lignite resource is very small, even on a per capita basis.

GrahamDr Kennedy Graham Link to this

Even if it is one-fiftieth per capita of Australia’s, to which of the following national interests, none the less, does she think the 3 billion or so cubic metres of overburden—which the lignite project will bequeath to Southland scenery above ground—will contribute the most: our tourist industry, our agricultural land, our “clean, green” brand export leverage, or our UN reputation as a fast follower?

SmithHon Dr NICK SMITH Link to this

The briquette plant that is being proposed in Southland for the use of lignite is a substantially more efficient way of using that lignite resource than what is currently taking place, where generally the lignite is being quite inefficiently burnt in a number of industrial establishments. I think where the Government differs from the Green Party is that the Green Party takes a view that New Zealand has to be purer than pure, and that we will not take any advantage of New Zealand’s energy resources. It would simply much rather import over 5 billion litres a year of fossil fuels from offshore than use some of our own resources.

GrahamDr Kennedy Graham Link to this

Will the Acting Minister ascertain from the Minister for Economic Development whether the Ministry of Economic Development is, as reported, an associate member of the Coal Association, and if it is, whether the Ministry of Economic Development will either withdraw or join the Wind Energy Association, the Solar Industries Association, the Aotearoa Wave and Tidal Association, and the Bioenergy Association?

SmithHon Dr NICK SMITH Link to this

I am not sure it is the responsibility of the Government which energy associations particular people or organisations are members of. I think we are a society that values freedom of association and values people being members of the organisations that they choose.

GrahamDr Kennedy Graham Link to this

I raise a point of order, Mr Speaker. The question related to the associate membership not of individuals or organisations, but of a Government department.

SmithMr SPEAKER Link to this

I invite the member to repeat his question.

GrahamDr Kennedy Graham Link to this

Will the Acting Minister ascertain from the Minister for Economic Development, who is responsible for the ministry, whether the Ministry of Economic Development is, as reported, an associate member of the Coal Association, and if it is, whether his ministry—the Ministry of Economic Development—will either withdraw or join the Wind Energy Association, the Solar Industries Association, the Aotearoa Wave and Tidal Association, and the Bioenergy Association?

SmithHon Dr NICK SMITH Link to this

Speaking as one who is standing in for the Acting Minister, I am sure that she would be happy to have a discussion with the Minister for Economic Development, but I really emphasise that organisations should be free to associate with those they choose.

GrahamDr Kennedy Graham Link to this

Given that the Ministry of Economic Development is paying the Coal Association to lobby the Ministry for the Environment on the emissions trading scheme, should the Ministry for the Environment, in balancing economic opportunity with environmental responsibility, pay the Wind Energy Association and Bioenergy Association to lobby the Ministry of Economic Development?

SmithHon Dr NICK SMITH Link to this

I ask the member to note that the Government funds quite extensively the Energy Efficiency and Conservation Authority, and it has views on such issues. There is a wide range of views. Wearing my other hat, as Minister responsible for the Climate Change Response Act and also climate policy, I have had absolutely no lobbying from the Coal Association in the last 12 months about any aspect of climate change policy.

GrahamDr Kennedy Graham Link to this

I seek leave to table a document pertaining to an exchange of correspondence between the Parliamentary Commissioner for the Environment and the Acting Minister on the issue of emissions trading scheme credits and coalmining, which makes it clear that downstream indirect what we would call subsidising can take place.

SmithMr SPEAKER Link to this

Leave is sought to table those documents. Is there any objection? There is no objection.

Documents, by leave, laid on the Table of the House.

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