Tax may choke plans to use coal

A Government-imposed carbon tax could spell the end of plans for a coal-fired Marsden B power Station, Energy Minister David Parker says.
Mr Parker, who is also the Minister for Climate Change Issues, said the Government favoured renewable energy sources over fossil fuels such as coal, and had already signalled a cost on carbon emissions for electricity generators - such as a carbon tax on burning fossil fuels.
"So on that basis, Marsden B is unlikely to go ahead," he told the Northern Advocate.
Mighty River Power, the state-owned enterprise behind the Marsden B scheme, said the project would only proceed if it was economically viable.
The company was granted resource consent to fire the mothballed station up using coal last year, but the decision has been appealed to the Environment Court.
Mighty River's external affairs general manager, Neil Williams, said the consent application was only one step of the process and did not necessarily mean the station would be built.
"Whether it's built will depend on other things, such as whether a carbon tax is imposed," Mr Williams said. "If a carbon tax is imposed it makes the project relatively less attractive. The bigger the tax, the less attractive it becomes so I wouldn't disagree with the Minister's statement."
Mighty River would decide whether to proceed once the consent process was finished.
Environmental watchdog Greenpeace and the Marsden B and Bream Bay action groups, which have all appealed the consents, were delighted by Mr Parker's statements.
Greenpeace climate campaigner Vanessa Atkinson said the Minister should now step in to halt the Marsden B project.
"If David Parker doesn't think that Marsden B will go ahead, then he must step in and stop the project, and provide some certainty instead of having it hashed out in the courts," Ms Atkinson said. "Mighty River Power ... is wasting taxpayers' money proceeding with the climate-polluting Marsden B proposal, including now dragging it into the Court of Appeal challenging the October High Court decision that climate change must be considered in the Marsden case."
Marsden B Action Group spokeswoman Catherine McNamara said the minister's comments were "great news" - but members would not be popping the champagne corks until the project was called off.
"While this is dragging on through the court it's costing us money to fight it," Ms McNamara said. "It would be nice to know that it definitely won't be happening then we can pay off the lawyers, put this behind us."
Bream Bay Action Group spokeswoman Margaret Hicks shrieked with delight at the news.
"That's marvellous," Ms Hicks said. "But please put us out of our agony of having to appeal this thing by just calling the whole thing off
... The cost of fighting this has been astronomical and we'd like some certainty."
It is expected to cost both groups $70,000 each to fight the consents in the court.
In July, Independent Commissioner for the Environment Morgan Williams said a coal-fired Marsden B power station ran counter to commitments to stabilise greenhouse gas emissions.
* CARBON COUNT
• Carbon tax is a charge imposed by government on every tonne of carbon - one of the so-called greenhouse gases that contribute to global warming - produced by a company.
• The more carbon released into the air, the more the producer would have to pay the Government.
• Many economists argue that a carbon tax would be the most efficient way to reduce greenhouse gases.
• Marsden B would release up to 2.17 million tonnes of carbon dioxide (CO2) into the atmosphere every year.
• It would burn up to 18,000 tonnes of coal every week.