Dr Kennedy Graham to the Minister of Energy: Lignite, Solid Energy and Climate Change

Dr KENNEDY GRAHAM to the Acting 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"?



Hon Dr NICK SMITH (Minister for the Environment) on behalf of the Acting Minister of Energy and Resources: Yes, but also she agrees with the statement by the Prime Minister that Solid Energy would need to comply with the environmental controls of both the Resource Management Act and the Climate Change Response Act.

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?

Dr Kennedy Graham: 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?

Hon Dr NICK SMITH: 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.

Dr Kennedy Graham: Is the Acting Minister aware of her mistake during question time on 18 May, when she said that coal mining 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?

Hon Dr NICK SMITH: The Climate Change Response Act provides for an allocation for particular industries that are competitiveness exposed. The Minister for the Environment 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 speculate on whether they would be eligible.

Dr Kennedy Graham: 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."?

Hon Dr NICK SMITH: The member takes the Minister of Finance's comments quite out of context. They did not refer to any subsidy for Solid Energy, but rather 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.

Dr Kennedy Graham: 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?

Hon Dr NICK SMITH: 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 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 rather than using some of our own resources.

Dr Kennedy Graham: 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?

Hon Dr NICK SMITH: I am not sure it is the responsibility of the Government which energy associations or organisations particular people 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.

Dr Kennedy Graham: 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.

Mr SPEAKER: I invite the member to repeat his question.

Dr Kennedy Graham: Will the Acting Minister ascertain from the Minister for Economic Development, whose ministry is responsible for her portfolio, 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?

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

Dr Kennedy Graham: 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?

Hon Dr NICK SMITH: 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 for Climate Change Issues, and also being responsible for climate policy, I have had absolutely no lobbying from the Coal Association in the last 12 months about any aspect of climate change policy.

Dr Kennedy Graham: 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, that makes it clear that downstream what we would call indirect subsidising can take place.

Mr SPEAKER: 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.