Mining lignite in Aotearoa NZ – a price too high?

Interested in what’s on the horizon in respect of our natural resources – including freshwater? Two reports released in August are worth your attention. Lignite and Climate Change: The High Cost of Low Grade Coal is a report from the Parliamentary Commissioner for the Environment while the other is the government’s NZ Energy Strategy 2011-2021, released with the welcome addendum, The NZ Energy Efficiency and Conservation Strategy.

We’re all interested in protecting the long term health of our freshwater resources. Does ramping-up the mining of lignite feature as a constraint to that mission? A Queensland case study (Evans, Roe and Joy, 2003) suggests we need to more carefully factor water – alongside carbon emissions – into any proposal to mine this ‘dirty’ coal.

Lignite layers

Access to a reliable source of water is an essential requirement for coal mines, with significant quantities needed for dust management, drilling, human consumption, among countless other uses. Statistics from 2003 (from corporate reporting) suggest that 200 litres of fresh water is consumed on average for every tonne of coal produced, with some variation due to operating practice and circumstances (Evans et al.).

Coal environments - Source

During the mining process fresh water transforms to dirty water and it is managed through the mines’ systems, including recycling as much water as possible back into the coal preparation plant in order to reduce fresh water take (Evans et al.). However, this has resulted in adverse effects associated with the effects of saline (salty) water on equipment performance, and in some cases a deteriorating body of water as the cycle of recirculation and evaporation continues. The storing of dirty water can also generate considerable challenges (Evans et al.). In Central Queensland a combination of extended drought conditions, continued new coal developments, a beleaguered agricultural sector and a new regulatory regime for managing water has kept the issue of water management for mineral exploitation at the top of the public agenda (Evans et al.).

Water availability is now a limiting factor on development in most Australian mining regions (Evans et al.). New Zealand, on the other hand, hasn’t been much constrained in its mining activities by poor access to water. However, with the release of the government’s new strategy (August, 2011) to harness significantly more of our oil and mineral resources, we must pause to consider that there are already competing demands for fresh water. How might a significant increase in lignite mining impact? How will it affect our clean, green vision?

Notwithstanding the obvious environmental concerns (discussed later), from a purely economic perspective, will mining lignite provide the best net benefit, compared to other ways of generating income? Tourism, growing food and trees, cleaner energy production, these and multiple other industries also depend to a large extent on the good health of our freshwater. The following review of a report from the Parliamentary Commissioner for the Environment is intended to provide further background to the lignite story, and leave you to form your own view. The government is inviting submissions on its energy strategy, perhaps you’ll be motivated to comment.

Review of the PCE Report, by Robyn Moore

In 2008/9, the government announced plans to exploit coal, including lignite, as a way to supplement New Zealand’s energy reserves, enhance export earnings and reduce debt. The government proposed releasing some of the Conservation Estate for this activity. However, more than 37,000 submissions were received, with overwhelming opposition to removing land from Schedule 4 protection (under the Crown Minerals Act, 1991), and the idea was shelved.

In a recently released report (NZ Energy Strategy, August 2011), the government outline their proposition to pursue the exploitation of crown minerals. Amendments to the Crown Minerals Act (1991) are in the pipeline, while the RMA has already been amended (RMAA, 2009), in recognition of these and other nationally significant plans.

The energy Minister relates that coal and petroleum are critical parts of our energy future suggesting that: Recent reports put New Zealand’s mineral and coal endowment in the hundreds of billions of dollars. For too long now we have not made the most of the wealth hidden in our hills, under the ground, and in our oceans. It is a priority of this government to responsibly develop those resources. Lignite is not specifically mentioned in the NZ Energy Strategy 2011, but it is a potential target for exploitation. The government had seemed particularly partial to the idea of converting lignite to diesel.

Parliamentary Commissioner Jan Wright suggests that lignite is a ‘very poor quality coal’ and that while New Zealand does indeed have lignite in abundance; the price of its exploitation is too high.  The government has signalled plans to increase the quantity of lignite mined by a hundred times or more. According to the Commissioner, what they have not adequately planned for is what to do about the huge amount of carbon dioxide that will be a by-product of lignite production and use.

Whatever you do with lignite – whether you burn it directly or convert it into something else – you end up with lots of unwanted carbon dioxide – greenhouse gas (PCE, 2011)…and under current rules in the ETS, the taxpayer could end up subsidising a lignite-to-diesel plant to the tune of a quarter of a billion dollars per year.

Parliamentary Commissioner Jan Wright has prepared a succinct, informative and persuasive report. The PCE has no powers to change policy or rules and with the new Energy Strategy, the government has made it clear they will press on with their intention to exploit assets to bring down debt, and their plans potentially include lignite. Will this be to the net cost or net benefit of this and future generations?

We are already on track to miss our greenhouse gas reduction targets by a massive margin and buying carbon credits offshore to make up the difference is not a sound or sustainable option, according to the Commissioner. Jan Wright observes:

The world is not short of lignite.

We are not unique in having lots of it.

This is not the way ahead for a clean green country.

Postscript: The government has indeed launched its venture to turn lignite into ‘gold’, announcing (on September 7, 2011) their intention to develop a $25 million briquetting plant in Southland. With no reference to the warnings from the Parliamentary Commissioner about the inherent long term risks and other costs in converting lignite to diesel, Finance Minister Bill English spoke of huge benefits and turned the first sod on the first stage of a plant that may process more than a billion tonnes of low-quality (brown) coal. What are the costs to produce the related tonnes of carbon emissions? Solid Energy chief, Dr Don Elder said that by the time the big projects – a lignite-to-urea plant and lignite-to-liquid fuel plant – begin construction, the company will have spent some $100m on feasibility studies

For general info on lignite:

This video is a lighthearted but informative look at lignite (brown coal) and the more efficient burning anthracite (black coal) – it’s aimed at teenage science enthusiasts:

Black Coal, Peat and Coke – YouTube

PCE Interview on lignite:

About robynmmoore

Anything to do with people and the environment and I'm interested! I have been writing and commenting about education, the environment and other community-related matters since 2006. I'm a compulsive researcher. In 2009, I finished a thesis on Kapiti's water issues and am still researching outcomes there. This website and the work I do as a trustee for the Whitireia Foundation are part of my aspiration to contribute to 'shaping more sustainable communities'...also the title of my thesis. Look it up - it's free at
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11 Responses to Mining lignite in Aotearoa NZ – a price too high?

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