Where is the Government on oil reliance?

14 comments on “Where is the Government on oil reliance? ”

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1. Tiger Mountain 1

   19 September 2019 at 8:30 am

   The blunt answer to the NZ Refinery Consortium, set up in the wake of deregulation all those years ago, is to wind it up and return Marsden Pt to full public ownership.

   Sustainable energy not dependent on oil is obviously the answer for NZ in the medium term. The Marsden Refinery has been seriously looking at Hydrogen fuel production at the old Marsden B site–well, they were until the new CEO quit this week after less than a year…watch that space I guess.

   The oil companies could be allowed to continue retailing, or not, just sent packing would be the tidy way, with any compensation paid over a very long period. There are countries like Indonesia with state run petroleum industries and pricing is a lot more favourable to consumers.

   For your info Advantage, there was a Commission that investigated the Oil Industry in the 1970s, significantly instigated by the Northern Drivers Union and its secretary GH (Bill) Andersen. Nothing much changed of course ultimately, but it was one of the first times that practices such as industry cartels/monopoly, multi national company transfer pricing and repatriation of profits to overseas owners were proven, and bought before the public here.

   Nationalising the oil industry would not even be in the worst nightmares of the MPs that support the parliamentary neo liberal consensus, but such demands need to be raised, along with restoring Electric power generation and supply to public ownership.
2. Dukeofurl 2

   19 September 2019 at 9:07 am

   "New Zealand was unable to make any such assurance on opening oil reserves to its own citizenry because as citizenry we don’t have any"

   This is incorrect as we do have a strategic Reserve
   'Energy Minister Megan Woods says New Zealand has a month's worth of crude oil held offshore,"

   https://www.tvnz.co.nz/one-news/new-zealand/minister-says-were-not-even-close-calling-crude-oil-reserves-after-attack-saudi-fields

   This is another False claim in the story.

   "It showed that our entire aviation section relies on this one fuel line, and 90% of our car and truck fuel as well. "

   That fuel line supplies Auckland only , not the rest of the country which is via Coastal Shipping direct from Marsden Point

   Some basic research would have found this

   https://www.coll.co.nz/

   "COLL transports refined petroleum products from Refining New Zealand to 10 coastal ports around New Zealand.

   Our vessels transport a wide range of products including:

   • Regular Motor Spirit (91 octane petrol)
   • Premium Motor Spirit (95 octane petrol)
   • Jet Fuel
   • Automotive Gas Oil (Diesel)
   • Vessel Bunker Fuel
   • Bitumen"

   Auckland is among the ports serviced , which include Tauranga, Napier Wellington New Plymouth, Nelson ,Lyttleton ,Timaru Dunedin and Bluff.
3. Ric 3

   19 September 2019 at 9:09 am

   How petrol prices are set is being discussed on nine to noon now
   • Dukeofurl 3.1

     19 September 2019 at 9:36 am

     I used to live outside of Rotorua…on the road to Mt Maungnui. The same raod had a string of service stations close to the city.

     One , a Mobil in private ownership was an old style with pumps close together and they set the price. They closed every night at Six pm. The rest of the BP Gull Caltex etc were corporate owned with spread out type pumps, they would raise their price every night at 6PM by around 4-5c per litre.

     Even so this road had far cheaper prices than the other main road on the side of Rotorua where they could be 10c per litre more.
     • Psycho Milt 3.1.1

       19 September 2019 at 2:52 pm

       It's still the same – that Mobil station is awesome.
4. MrTaniwha 4

   19 September 2019 at 1:20 pm

   I really liked Bills series of ‘Free Petrol’ posts, which I think need further consideration -> https://thestandard.org.nz/search/Free+petrol/

   For now I would treat the petrol distribution network as national infrastructure like power or fibre. The petrol distribution business needs to be split from the retail business as has been done to good effect with Chorus and Spark/Telecom.

   Perhaps KiwiRail could get into the petrol distribution business?
   • Dukeofurl 4.1

     19 September 2019 at 2:42 pm

     The petrol distribution network to service stations doesnt require a single access point like power or comms lines.

     If anything the existing 'common system' of refinery – shipping -port terminals which are owned as a group by the majors has inhibited competition. They have their own separate road tankers from the ports – which are now changing to generic trucking companies

     Gull works outside that with its own import terminal at MT Mauganui and then its own tanker trucks around the North island and still its cheaper.
     • MrTaniwha 4.1.1

       19 September 2019 at 3:15 pm

       The problem with Gull – in terms of the Lower North Island anyway – is that they don't have a distribution point from the tank farm in Seaview (I think?). Gull can only distribute to about Otaki/Levin from Mt Maunganui before it becomes uneconomical.

       So then we get the situation in the Wellington region where petrol prices are ~20c more expensive than 45mins up the road in Otaki even though distribution costs must be a lot less.
5. Adam Ash 5

   19 September 2019 at 4:28 pm

   IIRC, NZ imports about 60,000 barrels of oil per day, and produces about 20,000. The NZ oil is not able to be processed in the current Marsden refinery due to its setup for Middle East oil.

   So if government wanted to give NZ a bit of oil security, it could set up a line to refine NZ oil, buying that at fair market price from NZ producers. That would give us 20,000 bbl per day of domestic supply for key services like police, medical, fire, energy distribution military etc. That would be enough to keep some wheels turning in the event of a global oil shortfall, tho obviously a bit of belt-tightening would be needed by those without a 'key industry' designation. A nice little 'think big' project, and some jobs for the boys. If done alongside Marsden Point, staff and their expertise can just move from one site to the other, as Marsden will have to reduce imports and production accordingly.

   The strategic oil reserve is not for NZ to use directly, it fulfills our obligation to sustain a portion of the global storage pool to buffer impacts of oil supply shocks on all consumers, not just for NZ explicitly. We can't just go to that pantry and get ourselves some oil.

   A month's supply is about 1.8 million barrels (286,000 cubic metres). That fits into about five 70 m diameter tanks, like they have at Marsden. So no reason why NZ cannot start stockpiling its own fuel as a government exercise in prudent planning. With five tanks giving us a month's full supply, why not aim for building 3 months-worth of new storage every year, for the next eight years. Then we can really say that we have a two-year buffer in a national strategic oil reserve.

   With that local reserve of two year's crude in place, we can then allow continued draw out of that NZ oil reserve by Marsden Point to smooth out the short term variations in price at the pumps the oil majors love to play with.
6. greywarshark 6

   19 September 2019 at 6:37 pm

   Might we have to burn our trees like Indonesia to keep our economy going so we don't have to become a third and a half world country?

   https://asiapacificreport.nz/2019/09/18/toxic-smoke-chokes-region-as-indonesian-rainforests-burn/
7. roblogic 7

   19 September 2019 at 11:19 pm

   Green Party posturing on oil exploration was short sighted denial of reality. Shooting ourselves in the foot and increases our reliance on foreign oil. Won't reduce our carbon footprint by one gram.
8. Stuart Munro. 8

   20 September 2019 at 12:50 am

   We could really use a credible alternative fuel option like cellulosic butanol or algal biodiesel. Both rely on the end of science in which NZ has often prospered. And a few tech jobs or an exportable expertise would do us no harm at all. But no, we'd rather flood the country with cheap workers and real estate speculators.
   • roblogic 8.1

     20 September 2019 at 1:09 am

     & build a decent electric rail network
     • Dukeofurl 8.1.1

       20 September 2019 at 8:32 am

       Using any type of train is far more fuel efficient than trucks doing long haul.

       The major truck carriers use depots to load and unload trucks at , just like they used to do with railway yards, its not like its a single truck from point to point

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