Nation – fossil fuel use in regions that rely on it

On Newshub Nation this morning:

John-Michael Swannix is in the regions to find out how communities that rely on the fossil fuel industry can be part of a carbon neutral future.

 

A lot to learn about a serious renewable energy strategy

Whatever may happen with the climate a shift to as much renewable energy as possible makes sense (but don’t forget energy conservation as a key part of a more energy sustainable future).

Anna Berka, a research fellow in the University of Auckland’s Energy Centre, suggests that New Zealand has a lot to learn about successfully moving in this direction. She writes What NZ should learn about renewable energy:

Political and social science research on climate change shows some countries have been far more successful than others in orchestrating state-led transition to renewable energy over the past 40 years.

Without exception, it is countries that have fully embraced climate change objectives into industrial policy that have succeeded. They have seen clean technology as the ticket to new domestic technology and service markets, employment, and new export markets, as well as a means of addressing specific domestic issues such as regional development and resilience of electricity supply.

Conversely, very little tends to happen where climate change policy is not crafted around social and economic benefits directly relevant to domestic stakeholder groups. The reason? Tax payers, established industries and the media are consumed by the short term costs of climate change policy, blind to generally more diffuse and long term benefits.

And those who do promote long term benefits are often vague and sound more idealistic evangelistic rather than realistic. The New Zealand public has not been convinced that any urgency is required.

And what has already been announced by the new Government has been poorly thought through.

Announcing a moratorium on oil and gas exploration as the first agenda item in the Government’s climate change policy – without linking it to a broader programme that convinces New Zealanders they can and will benefit from the Government’s climate change objectives – could alienate both industry and the public and set a dangerous precedent.

Delivering winning climate change policies is a careful balancing act that requires a willing-to-learn government with ears on the ground. The Government must serve as a knowledge broker and matchmaker, using grants and public loans to bring existing expertise out of the woodwork, putting in place incentives to invest, regulations and public procurement programmes to guarantee demand that can scale up pilot projects.

This involves working with all stakeholders and independent research institutes to design policy instruments and set technology standards. So while market players ultimately do the heavy lifting, the role of central and local governments is essential. They need to nudge, prod and finance for a period of years, to steer the rate and quality of technological innovation in a desirable direction before market dynamics can take over and drive down costs.

It needs to combine the efforts of a smart Government and smart financial decisions with smart businesses.

A cogent argument is hindered by the zeal of some of those promoting a transition away from fossil fuels, in particular their insistence that ‘capitalism’ be scrapped in order to achieve a sustainable energy future. Linking an energy revolution with rapid  political and social revolution makes it much harder if not impossible to win public trust and support.

Our Government is deciding on the main elements of New Zealand’s climate change strategy. Once the key objectives are confirmed, policy design must be decided at political level, leaving implementing bodies to carry out specific mandates.

Countless examples show climate change policy tends to become ineffective where implementing bodies are left on their own devices to make complex trade-offs between different objectives and different stakeholder interests.

The Government seems poorly prepared for making major changes. This was highlighted with differences in expectations about the future of coal between the Minister for Climate Change and the Minister of Energy and Resources – see Ministers differ on banning coal.

The next challenge for the Government will be to bring ministries, key industry stakeholders and regulators on board and in alignment. This process won’t be helped by the fact that climate and energy policy is not integrated under one ministry.

For example, making the electricity market accessible to small-scale citizen-owned storage or generation assets is likely to require regulated power purchase guarantees, priority dispatch and buy-back rates as well as new channels to bridge the wholesale market with distributed electricity and ancillary services.

This will require full co-operation of MBIE, the market operator NZX, Transpower, distribution line companies and the Electricity Authority, who will need to adapt industry codes.

Win-wins are possible: That is, if our Government is ready to believe in the mission, rally the troops, and empower its people.

Making grand statements about new generation ambitions, bragging in Europe with incorrect claims, and imposing change without consultation as happened with the oil and gas permit announcement (followed by some rapid damage control) looks ad hoc and amateurish, and Ministers seem at odds.

The Government looks nowhere near ready to explain and implement a comprehensive and co-ordinated ‘mission’ on a transition to renewable energy.

And there is a substantial elephant in the energy revolution room – there is no obvious future without any reliance fossil fueled cars, trucks, trains, planes and ships.

Those who say we must change must first explain a lot more details about what we must change to, and how.

We don’t currently have the technology to time travel everyone to a miraculously fossil fuel free 2050, so we need to see a realistic way of getting there.

Ministers differ on banning coal

Megan Woods, the Minister of Energy and Resources, interviewed on Q&A this morning and was asked about the future use of oil and gas, and coal.

She gave an assurance they (the Government) “we have done no work on banning coal” and “there are no plans to do that”.

CORIN Where does coal sit in this? Will you ban future exploration of coal?

MEGAN Look, this isn’t a decision about coal; this is about block offers. And this is about offshore oil and gas.

CORIN This is important, though, because you need that coal, as we mentioned earlier, in terms of electricity supply in the event of a dry year. And the papers that were given in terms of the Greens’ questioning during the coalition was that if we didn’t have any more, if you stopped coal exploration, you’re talking 2028, there’d be no more coal.

MEGAN Look, one of the things that we are seeing, Huntly is transitioning to a gas peaking plant, away from using coal. Gas is about half the emissions of coal. But it still is half the emissions, so we’ve always said it’s part of the transition, gas. But I think one of the things that we need to be really clear on, that a transition is not status quo. The status quo is doing nothing, burying our heads in the sand and not having the long-term future-proofing plans for the economy. So we are absolutely accepting that gas will be used as part of that peaking.

CORIN I don’t mean to be rude – I just need an answer on coal. Is there a future for more exploration of coal?

MEGAN Oh, look, we have made no announcements about ending coal, and we certainly haven’t done any work.

CORIN Are you ruling out that you won’t ban coal exploration?

MEGAN Oh, we have done no work on banning coal.

MEGAN No, I’m not saying it’s a possibility at all. What I’m saying is there are no plans to do that. We haven’t done anything.

But this has been questioned: ‘Incredulous’ for Energy Minister to say no work on coal ban been done – National MP

Energy Minister Megan Woods says there’s been no work, plans or announcements around banning coal exploration yet Climate Change Minister James Shaw has signed New Zealand up to phasing out coal by 2030.

In November shortly after the Labour/NZ First/Greens government was formed, Shaw headed to Germany where he told the COP23 conference that New Zealand intends to become a leader in the global fight against climate change.

While there he signed New Zealand up to the international “Powering Past Coal” alliance, which is committed to phasing out the use of coal for electricity generation.

At COP23 Shaw said, “we know that the future of our electricity system is in renewables, not coal, so I was delighted we could recognise that formally at this important international meeting”.

NZH: Shaw to UN conference: NZ now a leader in climate change

At COP23, New Zealand has also signed up to the Powering Past Coal alliance, which is committed to phasing out the use of coal for electricity generation by 2030.

Shaw told the Herald New Zealand’s only coal-burning generators at Huntly are to be decommissioned by 2025.

“But symbolically it is really important, and the more countries that get in on it, the better.”

Newsroom: Our Inconvenient Truth: NZ will keep burning coal

Green party leader and Climate Change Minister James Shaw was unconcerned by the announcement when interviewed before question time on Wednesday.

“We want to get out of fossil fuels by 2035. I think the Genesis announcement is consistent with that,” he said.

He hoped that technological advances would help Genesis get out of fossil fuels before 2030.

Full interview: http://www.scoop.co.nz/stories/PO1804/S00238/qa-megan-woods-interviewed-by-corin-dann.htm

Thin end of the ‘ethical investment’ wedge

Last week it was reported that some Kiwisaver funds invested in munitions and tobacco companies. This prompted a lot of comment about ‘ethical investments’.

An ODT editorial looks at Socially responsible investments:

Last week, Commerce Minister Paul Goldsmith said in Parliament there were indications several KiwiSaver providers had broken strict laws banning investments in cluster bomb makers.

A newspaper investigation analysed more than 100,000 individual assets held in nearly 500 KiwiSaver funds looking for 169 companies blacklisted by the New Zealand Superannuation Fund.

The analysis found half of KiwiSaver providers — mostly smaller boutique providers — have avoided blacklisted investments, but some people were unwitting investors in big tobacco companies and makers of banned weapons.

The investigation found three KiwiSaver providers have made investments worth a total of $2.3 million in a trio of United States companies blacklisted by the New Zealand Superannuation fund due to their production of cluster bombs.

The latest KiwiSaver report shows more than $28 billion is invested in KiwiSaver by 2.5 million New Zealanders.

Although the amount invested is a tiny percentage of  total KiwiSaver funds, it is still unacceptable some funds have broken the law.

The KiwiSaver providers should have been more careful to adhere to the legislation specifically forbidding investments in such companies.

Yes, if it’s illegal to invest in a certain type of business it is simply unacceptable.

But it can get tricky because many investments are not simple and easy to identify. The investigation found that Kiwisaver funds from the ANZ and ASB invested in other funds that invested in munitions and tobacco companies.

And it can get more convoluted. The Fisher Fund invests in the ANZ in Australia, so could be seen to be (very) indirectly linked to cluster bomb manufacture.

But the rest of the problem becomes murkier.

It is still legal to smoke in New Zealand and there will be some KiwiSaver investors who are relaxed about their funds being invested in tobacco companies.

In total, New Zealanders were found to have $102 million in tobacco companies, a small proportion of the total amount invested.

I certainly wouldn’t choose to invest in tobacco. But would it matter if the fund I invested in indirectly had a small amount in tobacco? It would make no difference to tobacco production or use if I was minutely and remotely connected or not.

The Government has rightly said it was unlikely to further regulate the KiwiSaver sector and the choice of the fund — and where to draw lines on what was an acceptable investment —  was up to individuals.

This stance has outraged Opposition MPs who want the Government to step in to tell the funds where they can and cannot invest.

Telling New Zealand KiwiSaver providers where to invest is a thin edge of something rather larger.

And that wedge was given a nudge last week. For example Kevin Hague tweeted “No doubt you’re shifting your KiwiSaver account to a company that doesn’t invest in cluster bombs. When you shift, think fossil fuels too”.

Currently, about 50% of New Zealand investors hold shares in Australian companies, including mining companies dealing in fossil fuels and extractive industries such as uranium, a key component of nuclear energy generation.

If all investment ceased in fossil fuel and other extractive industries it would create chaos around the world. While natural energy like wind and solar is great we are still very reliant on oil.

No government has the right to decide whether New Zealanders can invest in liquor or tobacco companies.

It is the individual’s responsibility to ensure they ascertain where their money is invested.

But the Greens seem to want to hammer the ‘ethical investment’ wedge. Julie Anne Genter:

Govt must set the ethical standard on KiwiSaver investments

The Government needs to set higher ethical investment standards for its default KiwiSaver providers, the Green Party said today.

“Profiting from the production of cluster munitions, landmines, and nuclear weapons is immoral, and most Kiwis wouldn’t want their Government directed savings invested anywhere near these companies,” Green Party finance spokesperson Julie Anne Genter said.

“Default KiwiSaver Funds need to be legally invested, at a minimum, and preferably ethically invested, so that New Zealanders have the best choices over where their money goes.

Obviously investments need to be legal. But ‘ethical’ is quite different.

New Zealanders already have the choice where their Kiwisaver funds are invested. As they should.

But I have concerns about Government setting ‘higher ethical standards’ for investments.

An interesting New Yorker article on whether divestment (ethical reinvestment) makes any difference – DOES DIVESTMENT WORK?

And there can be a costly downside as the ODT reports in City pays cost for divesting

Some of the Dunedin City Council’s divestment decisions have cost the city, it was revealed at yesterday’s council finance committee meeting.

The council voted last May to scrap any investments the fund had in the munitions, tobacco, fossil fuel extraction, gambling or pornography industries and to bar future investment in those industries.

The fund had produced $783,000 in profit during the eight months to February 29. However, this was $1.657 million down on the budgeted $2.44 million profit.

Some of the unfavourable variance was because of divestment losses, Mr McKenzie said.

The Dunedin City Council has a strong green lobby, and they succeeding in forcing divestment from companies they considered to be unethical. At a cost.

Kiwisavers should have choice. That could cost them. Apart from ensuring illegal investments are avoided the Government should not dictate what we can invest in.

What if fossil fuel disappeared tomorrow?

Some of the more extreme climate and fossil fuel activists want all fossil fuel extraction to crease almost immediately – see Protest blockade and backlash.

What would happen to the world if they got their wish? A prediction for the USA:

What If Atlas Shrugged?

by David Deming

Atlas Shrugged is the title of Ayn Rand’s 1957 novel in which the world grinds to a halt after the productive segment of society goes on strike. Tired of being demonized and exploited, the world’s innovators and entrepreneurs simply walk away.

What would happen to the US today if the fossil fuel industry went on a strike of indefinite duration? What would happen if we gave the environmentalists what they want?

Within 24 hours there would be long lines at service stations as people sought to purchase remaining stocks of gasoline. The same people who denounce oil companies would be desperately scrounging the last drops of available fuel for their SUVs. By the third day, all the gasoline would be gone.

With no diesel fuel, the trucking industry would grind to a halt. Almost all retail goods in the US are delivered by trucks. Grocery shelves would begin to empty. Food production at the most basic levels would also stop.

With no trains or trucks running there would be no way to deliver either raw materials or finished products. All industrial production and manufacturing would stop. Mass layoffs would ensue. At this point, it would hardly matter. With virtually all transportation systems out, the only people who could work would be those who owned horses or were capable of walking to their places of employment.

Owners of electric cars might smirk at first, but would soon be forced to the unpleasant reality that the vehicle they thought was “emission free” runs on coal. Forty-two percent of electric power in the US is produced by burning coal.

With natural gas also out of the picture, we would lose another 25 percent. The environmentalist’s favorite power sources, wind and solar, could not fill the gap. Wind power currently generates about 3 percent of our electricity and solar power accounts for a scant 0.04 percent. The only reliable power sources left would be hydroelectric and nuclear. But together these two sources could only power the grid at 27 percent of its normal capacity. With two-thirds of the electric power gone, the grid would shut down entirely.

And Anthony Watts adds:

  • After elevated tanks of municipal water systems were depleted of drinking water in a few days, there would be no more water supply. This would force people to start looking for alternate sources, and we’d be back to a time when water treatment was unknown. Disease and death would follow for many as tainted water spreads disease. People with water wells would have to tear out electric pumps and install hand pumps or windmills to get water.
  • Related to the first point, toilets would be useless without water to flush them. Fecal matter disposal becomes an issue as gravity fed sewage systems eventually clog, and eventually fecal matter will end up in streams and rivers contributing to the spread of diseases much like the Great Stink in old London.
  • Garbage collection becomes a thing of the past. Garbage will be piled high in the streets.
  • People that have grid tied solar power systems would be no better off than their neighbors, because the DC to AC inverters require an AC power grid presence signal. Otherwise they shut off for safety. Some people with electrical skills might be able to rewire them, but then they’d only have electricity during daytime.
  • People who may have working solar energy might be targeted by the have-nots. They might wish they had paid attention to the Second Amendment to protect their home based energy source. People who still have gasoline in their cars trying to escape cities might find themselves victims of mob attacks as the have-nots look for the last remaining bits of energy. Mad-Max world ensues.
  • Windmill farms (that also need grid presence to operate) will stand as icons of folly, unusable, and cursed by the populace since they can’t make use of them. Eventually they’ll all look like these wind farms or fall down.
  • Without air conditioning, city dwellers would truly experience the Urban Heat Island effect in the summer, that is when they weren’t scrounging for food and water, and fighting off the Mad-Maxer gangs who would take anything they could from them, including their life.
  • Wood burning to stay warm during the winter becomes all the rage again. Smoke pollution returns to cities, especially in winter.
  • Real climate refugees start streaming south from high latitude countries as people run out of fuel. Many towns in Alaska and Siberia that survive only because of regular supplies of heating oil and gasoline would be abandoned.
  • Global warming, environmentalism, politics;  all would be a thing of the past, since survival trumps everything.

From Life After Energy: What if fossil fuels disappeared tomorrow?

This illustrates a major world problem – fossil fuels have serious downsides like pollution and climate change, but we are extremely reliant on them to function as heavily populated societies.

New Zealand is nowhere near as reliant on fossil fuels as some counties (like the US and Australia) but we are very reliant on fossil fueled transport.

Pulling the plug on fossil fuel use won’t happen because it would be catastrophic.  We have to reduce use and move to alternatives as quickly as possible, but that is probably going to take a long time.