Cracker: All Aboard!
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I guess it's fair enough that Key might not have thought that in these tough times the Government would actually be acquiring new assets. But it'll teach Key not to make open ended promises in future.
If he couldn't predict this one, he should sack his advisers, or himself. He was asked about rail right after he made the "not in the first term" pledge, on Morning Report for example (but sadly not on Agenda, when he first made it). He said then that National would not buy but would not sell either.
It is an absurd position, with no foundation in economic reality, and the only reason he gets away with it is that political journos are more interested in the game commentary ("So that's innoculated then, good tactic or not?") than any debate on the merits of policy.
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relevant in this day and age of instant teleportation.
By this logic we should abandon any kind of tax payer investment in roads. All it is doing is tying us to the tyranny of 19th century engineering.
How big a personal tax cut do you expect for $600million, by the way?
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I guess it's fair enough that Key might not have thought that in these tough times the Government would actually be acquiring new assets. But it'll teach Key not to make open ended promises in future.
I think just before the election, which Labour still looks like losing, the government should buy something that will piss national off and call it a state asset so they can't sell it.
A 10 story high pop art sculpture of quotes that John Key wants to forget in parliament grounds. One million copies of Nicky Hager's Hollow Men to be given to every person in high school (and future voter). A big bubble, supported by fans over the beehive, shaped like Robert Muldoon, with big speakers inside that cackle insanely loud to all the people in the building like Muldoon when he finished pounding some poor young reporter into submission.
If you can't win, be malicious while you're losing I say. Fuck 'em.
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On second thoughts, perhaps I overestimated Key's foresight:
Sunday Star-Times, March 23:
"Next up is the rail system, which Cullen is negotiating to buy back into government ownership. When asked by the Sunday Star-Times where National stands on the issue, Key repeatedly said he didn't believe the sale would go through. But he says if it does happen, his finance spokesman Bill English has made it clear National would sell off rail again."
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The thing with Tiwai Pt is this. If NZ was on its own separate planet *and* we didn't use any aluminum here, then closing it would help carbon emissions.
As it is, if the smelter shut, then presumably a new or upgraded smelter somewhere else would take up the load. Which would quite possibly run on fossil fuels (unless it was somewhere that has 100% renewable electricity and capacity to spare, it would certainly displace other renewable energy consumers).
So closing the plant wouldn't help global CO2 emissions, and would be most likely to increase them.
(See also: is more immigration an environmental negative? Depends where they come from).
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Apart from the direct 900 jobs at the smelter, there is all the supporting roles to consider (doctors, couriers, suppliers etc etc). What happened to small towns when the dairy factories were closed down?
What else do we get, Meridian and Transpower get a whack for making and transporting the power. Both are SOE's so the money goes to the state rather then off shore.
And its not as simple as 'turn off the smelter and feed the power into the national grid for hot showers'. The lines going out of Invercargill do not have enough capcity to feed all of the power generated by Manapouri out to the north (why build it when all the power is going to the smelter?). Getting a transmission constraint sorted out can be a bit of a problem as is evidenced in the Waikato/South Auckland. -
Quite apart from Comalco I've been wondering about energy in general - why do we shift it betwen islands or rather why does it cost the same on both islands if we apparently lose 1/3 of it getting it there (my long ago recollection of the efficiency of the Cook straight Cable was that 2/3 of what you send in gets to the other side) - wouldn't we be better off charging what it costs, have people put their data centers in Clyde and run fiber down there instead?
(OK, not Clyde, there's still that fault line under the dam to consider, but you know what I mean)
Equally if you have to run Huntly the extra Kyoto costs ought to be bourne by those who need them ....
But Auckland needs power you say .... maybe not forever - maybe it's too big and we need to grow elsewhere instead, an isthmus a kind of a silly place to put a big expanding city ... the alternative is that those of us down south are subsidising its growth - I hear a lot of people outside Auckland griping about it these days, about what a drain it is on the economy, all the tax money goes there, they always win the lotto, what a pain it is to have to fly there to leave the country (and through that annoying airport, someone suggested the other day that we should sell it off to the Canadians .... and make them take it) ..... I understand that half of you live there, the other half of us don't.
What I do seriously wonder about is how windpower is going to work day to day if it gets really really big - seems to me that it doesn't solve peak needs - it might be a calm day - we still need that peak production - on the other hand we'll probably be turning power production on and off ... seems to me that hydro and wind are a great mix - we'll just shut the hydro off and let the lakes fill when the wind blows right? - problem with that is that the existing dams can't make any more peak power than they did when they were built - what we need to do is pony up and add some more penstocks and generators to the existing dams so we can play that sort of game - maybe then things like Huntly won't be required
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If you can't win, be malicious while you're losing I say. Fuck 'em.
And I'd probably say the same thing, which is why folks should be profoundly thankful the chances of either of us getting our hands on a ministerial warrant are non-existent.
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Rich:
(See also: is more immigration an environmental negative? Depends where they come from).
Negative, if they settle in McMansions in Whitby or Clevedon and drive Explorers/Range Rovers to work. Positive, if they live in city apartments and don't drive a car.
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See, and *this* is why I through questions open for discussion. To get proper answers. Those question marks aren't rhetorical you see.
Rich: My fault, I'm mixing points, but I wasn't so much thinking about the climate change aspect of shutting Tiwai Pt, more our current issues with electricity. But I didn't say that, so my bad. And -transmission issues aside- given our current electricity supply is about 2/3 renewable, 1/3 fossil, I wonder what would happen if we suddenly lost 15% load? (This is another genuinely open question) - would it come equally off everything, would they ease off the damns, or would they stop throwing coal into the fires?
Andrew, good points about Tiwai Pt. Obviously there are downstream economic effects, but I didn't think about the transmission issues. There'd definitely be a rejig needed, but for an extra 15%, would it be worth it? Also worth noting here that I believe Comalco have a partially fixed price agreement with their suppliers, so it's possible with power being at something of a premium (and likely to become more so), that they could make more selling it on the spot market in the medium term...
Don: I don't actually think there'll be teleportation in 2050. Or that the earth will be molten lava. Or that we'll still be eating Tasty Cheese. I was making a funny. As for tax cuts, I don't expect a lot, ever (I've done the maths), but $665 million here, $665 million there, it all adds up. Especially when we've repeatedly been told that times are tough and we all have to tighten our belts, it's just a little, I don't know, contradictory.
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I thought that if you closed Tiwai Point, supply would be constrained, the global cost of aluminium would be increased, and demand would be reduced. People would use other things to build cars and window frames.
Politically, however, the cost of shutting down Southland's largest single employer would be pretty high, and that's a risk this or any foreseeable Government is pretty unlikely to take. The political capital required to do something like that isn't there at the moment, and I don't see it happening for a long time yet.
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Oh, and Paul:
seems to me that hydro and wind are a great mix - we'll just shut the hydro off and let the lakes fill when the wind blows right?
Check out the North & South piece for other ideas along the same vein. Personally I think the answers are a lot closer to home, such as more solar panels, people being able to sell the power from their roof back to the grid during the day. Seems to work lots of places overseas, but we're only just starting to consider it here.
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If you shut down Comalco, what's going to happen to those lucky dip can recycling machines that you could win prizes from when you recycled?
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Uh, from my vague understanding of economics, it's the movement of money generated by Tiwai Point. Something to do with the balance of payments and such. Basically, the smelther costs a s***load to run, and produces a high value product which is then sold, so it's to do with that money moving in and out of NZ. Or something.
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The current pseudo-market model for deciding which generators to run doesn't help. It's perfectly feasible to have a computer model that optimizes CO2 output whilst maintaining safe dam levels - that would give a more optimal allocation that a "market".
We also need to have a long term plan to get to 100% renewable. That can involve home solar and the like, but mostly it means a lot more wind and a bit more hydro. There will be an inevitable loss of landscape value from this. I'd favour giving each regional council an energy quota to fill in their choice of locations (those failing to do so would have a wind farm built on their rugby grounds).
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ooh ooh please please - can we in Dunedin just build a wind farm down there rather than the silly stadium (if you read the local paper apparently our rugby team is so good we're basing all our future economic development on the bucket loads on money it's going to bring in)
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I was making a funny
No shit.
I remember Russell once comparing his own "earnest" sto Slack's "clever".
Sorry to say I err on the earnest. Would like to be "clever" but marbles were in short supply round about '66.
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And I'd probably say the same thing, which is why folks should be profoundly thankful the chances of either of us getting our hands on a ministerial warrant are non-existent.
I think we should share one Craig. We could split the week - you'd do right wing stuff monday to wednesday, I'd do left wing thursday to sunday. Every department we ran would be in a permanent state of chaos by week 2.
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And why is it Michael Cullen keeps saying we have no money for this, no money for that (and by that I mean 'tax cuts'), we've got to tighten our belts and so on, then he forks out 2/3 of a billion dollars for some trains?
Because in a budgetry sense, it's not actually spending. All he's doing is moving money from one column (cash, presumably) to another (assets). The overall balance isn't affected, until the asset is revalued (and there's more than one way to value something - NPV of income stream, or full replacement cost? Guess which one the government will be using?)
I've been wondering about this for a while, but can someone please tell me, aside from 900 jobs (which is no small fry, but still), what exactly do we get out of Comalco?
Money. But in terms of the underlying question - can't we just turn them off and have hot showers instead - the answer is "no". Primarily because the national grid doesn't have enough capacity going out of Bluff to move all the power north.
They can make some savings, but things have to be pretty desperate for them to shut down a potline. But that's what a market is for.
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If you can't win, be malicious while you're losing I say. Fuck 'em.
I agree. At the least, commit all the money to social programmes, and dare the fuckers to cancel them. They do it, they're a one-term government. They don't, and they don't get to deliver on their promises. A perfect poison chalice, and the left wins either way.
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Back on the balance of payments thing... I'm sure I've mooted shutting Tiwai in the past. I couldn't find much googling, although there is some comment that various projects (including Tiwai) protected us from balance of payment issues in the 80s (here).
Finally, some guy I haven't heard of has some interesting thoughts on closing Tiwai among other things. He also notes the terrifying impact dairying is having on power consumption. It is possible that they may not need to push surplus power from manapouri too far. He also laments the demise of NZED and its planning. Ahah. I just found a short biographical note on the author and the perspective makes more sense.
All in all interesting reading.
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I think the Rio Tinto (tiwai) thing is really quite simple.
1. They import bauxite (basically aluminium oxide) from Queensland.
2. They add cheap (by global standards) renewable electricity to separate off the Oxygen, leaving Aluminium.
3. They export the refined product.
4. They charge a premium due to the renewable aspect, and the fact that they make very, very good Aluminium (purity of the product is a function of how much electricity is used, so because it is relatively cheap they can add lots)
5. They return the profits made to the overseas owner.The only balance of payments impact is the value of the electricity - everything else is on-shore or 'realised" (profit) off-shore.
So basically we export electricity - that is the main resource added to the bauxite as it passes through NZ. Not that I wish to denigrate the skill of the people involved - they are very good at what they do. but it's marginal in comparison with the electricity.
[I've been using the term electricity, because that is what it is - aluminium production is mainly electrolytic - no smelting furnaces like you see for steel etc.]
Against this we have to balance the impact of shutting down the plant.
If we were really smart we'd find a way to only let them run it using "surplus" power - maybe a pumped storage system like in Wales to store excess Hydro / Wind.
BTW, that's our main energy problem - it's like my water tank at home. Most of the year I have a surplus of water, but for 3 months each year I get little rain and have to scrimp and save... if we didn't mask consumers from the supply and demand impact (through retail contracts) we'd probably find we had plenty for the moment!
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Damien, I don't think I'm with you on solar power being the answer(suppose I will have to buy North and South to read the whole article - cunning marketing ploy). While the power is 'free' you still have to pay off the capital and maintenance - last time I worked the numbers it was about five times the retail price of power.
Direct use of solar thermal has possibilites, but is reliant on good design and getting the kit installed at the right time.
Solar power in Californian and Germany works because there are huge subsidies available for installers and, in Germany at least, a gaurenteed price for the power. Perhaps we could use the money for tax cuts to fund this in NZ (thats a funny).
There is a raft of other measures around efficiency and direct use of energy (why use heat to make electricity to heat water?) that are probably better considered first.James, its a lovely article you found - I got many laughs from it. While there are interesting thoughts I'd like to see some facts and perhaps logic informing those thoughts too.
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Ahah. I just found a short biographical note on the author and the perspective makes more sense.
Just to add to the biographical knowledge on David Round. He was the National Party candidate for Chch East at the last election and he was also seeking the nomination for the Selwyn electorate this year. Though I understand he's no longer in the running.
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I was making a funny
No shit.
I remember Russell once comparing his own "earnest" sto Slack's "clever".
Sorry to say I err on the earnest. Would like to be "clever" but marbles were in short supply round about '66.Jeez. I feel like I'm lining up with Damian for six of the best and I wasn't even at school that day.
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