Chris Baker: Clean technology the only alternative to coal mining

Coal is needed to make steel, and the Glenbrook steel site alone pumps $80 million a year into the South Auckland economy. Photo / Richard Robinson

Jeanette Fitzsimons confesses that for 35 years she has been wrong about the solution to climate change. She now suggests that not mining coal will somehow help reduce greenhouse gas emissions.

Until China and India (and many other developing and developed countries) find a way of producing electricity for less than 6c per kilowatt-hour using something other than coal, those countries will burn coal.

There's about 1 trillion tonnes of easy-access coal available. All the negotiations in the world will not alter this fact.

All the greenhouse gas-reduction efforts to date have not altered the fact that large quantities of carbon dioxide from burning fossil fuels, including coal, enter the atmosphere and will continue to enter the atmosphere over the next decades.

In New Zealand, coal and gas are the chief energy sources used to convert milk into milk powder: the basis of a multibillion-dollar export industry. Fonterra's Edendale processing plant alone employs 400 staff and produces 230,000 tonnes of product a year.

If there were an alternative source of energy that was as cheap and as reliable, it would be used.

Steel cannot be made without coal. New Zealand coal and ironsands are used to make steel at Glenbrook, which employs 1200 staff and injects $80 million a year into the South Auckland economy.

Recently, one company approached New Zealand to order 30 million tonnes of coal a year for making steel. We produced about 5 million tonnes last year, not all of which was coking coal. Obviously, we cannot fill the order.

Even if our ports could handle the freight, which they cannot, we could not mine the stuff at anywhere near that pace for geological and logistical reasons.

That's one company out of the hundreds or thousands of companies that make steel around the world. Ms Fitzsimons cannot be seriously suggesting that the world stop making steel.

After all, it's a key input for wind turbines, let alone every other facet of life. Or is she suggesting we don't need to be part of the global economy?

Coal and gas also make a vital contribution to our electricity supply. We are blessed with renewable sources of energy - wind and rain - and we have considerable untapped potential for additional geothermal. But we still need Huntly, and EP3, and will need them in the medium term.

Even as the contribution of geothermal and wind increases over time, New Zealand's total demand for electricity will rise to match, as the Government's economic goals are met and our economy and population continue to grow.

If New Zealand were to stop using coal, as Ms Fitzsimons proposes, the effects on the national economy would be felt immediately, without affecting the world's climate one iota.

The world needs to adopt a different view of coal, and here there are points on which there is agreement with Ms Fitzsimons.

Coal is a transition fuel. It will be used. It will eventually be replaced by something else. Faced with these realities, the policy imperatives for New Zealand and the world are crystal clear.

The world needs to, and is developing, technologies that allow cleaner burning of coal. China is playing a leading role in this area.

Carbon capture and storage is a vital component in the global response to reducing greenhouse emissions. The Government and industry are assessing these technologies and are working with Australia to advance them.

In this way, New Zealand's lignite resources can be developed in an environmentally responsible way. It is of massive importance to our economy that we do this. There is about 9 billion tonnes of lignite that can be recovered, with an energy content of about 40 Maui gas fields.

At likely future prices, this resource could be worth $3 trillion. That's just lignite. If the necessary technologies for recovering methane hydrates can be developed, New Zealand's continental shelves may harbour about $12 trillion worth of energy, at future prices.

Alternative technologies to coal (and petroleum) will be and are being developed. It is inevitable and necessary, as these resources become scarcer and our global understanding and management of the environment improves.

Certainly there is room for pursuing energy efficiency, for developing strategies and technologies for reducing emissions, planting forests, pursuing renewable energy schemes and much more besides.

By all means, let's change our lightbulbs and stick insulation into our homes. But let's also be realistic. Leaving our coal in the ground will simply lead to that demand being met elsewhere, often with greater environmental impacts.

New Zealand and the world need to think more cleverly than force the world's poor and everyone else to stop using coal.

Ms Fitzsimons can take comfort in the following tale by way of conclusion. About 100 years ago, the world's largest cities depended on horses for transportation. This dependence carried with it some unintended and negative consequences. Think manure!

An international conference in New York at the time, called to "resolve the problem", was suspended after three days of fruitless deliberation.

Within a few years the problem disappeared. Just as stone was replaced with bronze and iron, and just as the horse was replaced with the streetcar, coal and petroleum will be replaced.

As unpalatable as the technology solution is to Ms Fitzsimons and her supporters, it is the only solution.

* Chris Baker is the chief executive of the Wellington-based mining and exploration lobby group Straterra.