Stuart Smith
National MP Kaikoura
We live in interesting times. Last week Winston Peters put out a press release stating that Refining New Zealand (RNZ) were filling the pipes at their Marsden Point refinery with concrete, and this understandably generated a lot of concern. It was however fake news, and this was confirmed when I met with RNZ. They are shutting down the refinery, but they are not filling pipes with concrete.
The National Party would have actively worked with RNZ to encourage mothballing the refinery rather than decommissioning, to preserve an important asset in uncertain times. While it is a commercial decision, that decision was made in an environment where the Labour Government is actively deindustrializing our economy. We know this by their reaction to New Zealand Aluminium announcing that they intend to continue operations at their Tiwai smelter. It is clear that they had banked on Tiwai closing, which would free up a significant sustainably produced electricity supply, never mind the jobs that would go and as is the case with RNZ, these are high paying jobs and would decimate the local economy.
The Marsden Point refinery was established to ensure energy security, but the refinery cannot compete economically with refineries in Asia that are up to five times bigger. Unfortunately, our oil and gas industry has been left to wither on the vine with the pernicious exploration ban, and while our condensate could have been refined here, the layout of the refinery was such that it would have to be blended with imported crude.
The RNZ CEO made it clear that excessive energy and transmission costs in particular were one of the main factors in their decision to close. To be clear National will reverse this ban, as we see gas, which is what we predominately produce, as an important transition fuel.
There are many wind and solar projects in the pipeline and there are suggestions that they will produce up to 30% of our electricity, but storing that energy is the challenge. What we have learned from the overseas experience so far is that this is much more challenging than expected, and that is at least partly responsible for soaring energy bills in Europe and the UK, even before the Russians invaded Ukraine.
In the meantime, the Government has decided to forge ahead with a biofuel mandate, which the Prime Minister claimed would help increase fuel security and reduce emissions. Biofuels do absolutely nothing to improve fuel security and in fact, cause some issues.
Firstly as Marsden Point has been identified as a biofuels hub, the pipeline from the refinery site to Auckland (RAP) is not able to take biofuel or fuels blended with biofuel in it for technical reasons. Despite advice from officials that the proposal would only add between 5 and 10 cents per litre, fuel companies tell me that calculation did not include additional infrastructure and handling and it will be more like an additional 17 cents per litre, so when added to the 25 cent excise increase in three months it will be a 42 cent per litre increase in fuel.
We do need to lower our emissions, but this is not an excuse for poor policy and bad governance.
So indeed we do live in interesting times.
