Cheap Diesel If Govt Supports Lignite Mining
October 30th, 2008
Solid Energy is turning up the heat on the Govt to give the green light to exploit the vast Southland-Otago lignite reserves claiming it could produce diesel for just $1 a litre by 2013 if it gets access to the 11bn tonnes of coal. CEO, Don Elder, says a single Fischer-Tropsch coal-to-liquid-fuels gasification plant atop one of Southland’s billion-tonne lignite fields could replace all NZ’s diesel imports within five years if the necessary processes, including consenting under the Resource Management Act are condensed “to the fastest possible point.” It would otherwise take up to 10 years to deliver a world-scale plant “almost exactly the right size to replace NZ’s imported diesel.”
Carbon Capture Crucial. The Govt is reluctant to allow the SOE to mine the coal over concerns the process to turn coal into transport fuels will boost the country’s greenhouse gas emissions. However, Solid Energy claims the carbon dioxide by-product of the plant can be captured in the gasification process at a “trivial” cost and permanently sequestered deep underground in coal seams, saline aquifers or depleted oilfields. Elder says all sequestration technology lacks is monitoring of its efficiency, and he adds there are plenty of places in Southland where gas can be sequestered. An alternative would be to store it in the off-shore Southland oilfields of the Great South Basin. With sequestration technology yet to be proven and pushing for the RMA process to be bypassed, the SOE could well face an uphill battle getting Govt approval especially if the Greens form part of the next Govt.
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