GUEST BLOG: Chris Leitch – Refinery key to break monopoly on fuel retailing

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The potential closure of the Marsden Point oil refinery provides a unique opportunity to break the stranglehold the oil companies have on fuel retailing.

Government should purchase it and keep it operating as a State Owned Enterprise.

The SOE could become a wholesaler of fuel, selling at a common price, allowing smaller retail operators like Gas and Waitomo to enter the market and provide real price competition at the pump.

The overseas oil company stranglehold is likely to increase with Australia’s Ampol, owner of one of Australia’s two remaining refineries, bidding to take over New Zealand’s largest retailer Z Energy.

Government ownership is key to breaking the stranglehold.

It is also the only entity with the ability to invest sufficient capital into the development of hydrogen, bio-fuels and Sustainable Aviation Fuels and the refinery is critical in making the transition to those alternatives to oil.

In a report prepared in May, Air NZ says globally SAF production facilities have only been established and commercialised with enabling government policy and investment support.

 “Government can enable SAF development through assistance with upfront construction costs in the form of non- repayable grants, low or zero interest loans, or loan guarantees”, the report says.

TDB Recommends NewzEngine.com

“The aggregate effect of several OPEX and CAPEX support mechanisms could make a material difference to SAF commercial viability in the market”.

The report goes on to propose additional taxes as a way to fund that investment.

“Revenue generating levies relevant to international tourism could be explored as a revenue source for funding SAF investment. For example, the International Visitor Levy, or a similar funding mechanism”.

However Government could compulsorily purchase the refinery shares from the existing shareholders  at no cost to taxpayers, using to capacity of the Reserve Bank which has already created around $60 billion in the last 18 months and it could also use that mechanism to invest in New Zealand’s liquid fuels future.

A Labour government used that capacity in the past and there’s no reason this one couldn’t act in the interests of New Zealanders and do the same. 

Approximately 600 jobs will be lost if the refining operation shuts down with many of those people being forced to look for jobs overseas with the consequent loss of yet more expertise and knowledge to New Zealand.

A plan to develop the refinery would instead save those jobs, leverage that expertise for the future and ensure fuel security for the country’s essential transport services as the other options are developed.

The petition calling for the government to purchase the Refining company has over 12,000 signatures and is here. https://www.change.org/Save-the-Refinery 

 

Chris Leitch is the Leader of Social Credit 

22 COMMENTS

  1. I now see your name Chris. Appologises for calling you anonymous. But please do look at the energy issues.

    Hydrogen takes huge amounts of energy (think losses) to compres and transport. It is LOW energy density (certainly compared to oil, which is the ‘best’).

    These and other such alternatves are a FALSE prophets.

    Living sustainably is the ONLY solution long term. IMHO we have less than five years (my GUESS) but definitely less than 10-20 years to get the infrastructure in place and get used to ‘living within our energy needs’. And that’s assuming we don’t ruin the planet for humans to live on beforehand, we actually do ‘the right things’ and we DO NOT increase our ‘hydro-carbon usage’ each year which (c-19 aside) we have been.

    Every year wasted makes the transistion SO much harder than it needed to be !!!!

    • The solution is a different lifestyle appropriate for the limitation our home/planet places upon us.
      People need to travel less and if they must then public transport (especially rail) is the only real solution.

      If politics and ‘head in the sand’ over rules the necessary, then electric vehicles buy us a tad more time. They maybe mitigate the problem by 25%. ‘Better to sell at a 25% loss than a 99% loss’.

      The electrical infrastrucure is there. The Hydrogen infrastructure is NOT and would cost probably billions$ to create.

      If you look at the energy/physics of these alternatives, MOST are nett negative energy and just pointless, ‘all things being equal’. Hydrogen is something like MINUS 25%, depending on assumptions. BUT NO ONE comes up with a POSITIVE nett energy figure. NO ONE.

  2. With the premise that fossil fuels are evil and on the way out.

    Why would the state invest tax payer dollars in an oil refinery?

    Surely the state would be in favour of closing this sunset infrastructure down?

    Would we not be better off to clean up the site (paid for by the current owners) build multiple state housing units there and let the plebs enjoy access to an unrivalled ocean beach?

    And if the North Port is going to replace Ports of Auckland, those 600 jobs would be easily absorbed in building and staffing the new port? Add the need to build the rail upgrade and staff the numerous trains bringing in 40ft boxes, One Tree Point and Ruakaka will be larger than Whangarei before long.

  3. As an addon to my previous comment. The refinery current owners may well see this as a similar situation as Cullen enacted Toll Holdings over KiwiRail. A crumbling, out of date bit of infrastructure to pass onto the state at top dollar.

    • State is already invested in the refinery thru ACC and the Superfund. It also has a 15% Superfund holding in Z Energy so yeah nah Gerrit. Define crumbling and please give some of your energy engineering experience as a reference.

      • Crumbling Infrastructure Knowledge = feet on the ground
        Energy Engineering Experience = more feet on the ground

        And your energy engineering experience?

        ACC and Superfund are part of the shareholders that are voting to close the place. Reason? Not worth the maintenance and upgrades required. More revenue can be gathered when operating as an import terminal. Close the refinery = more profit for the New Zealand tax payer due to no refinery production overheads.

        Distribution has higher profits due to lesser overheads.

        And Z has been sold to the Australian Ampol outfit. No longer in New Zealand ownership.

        As for bitumen. Just import the correct viscosity grade and specification. Problem solved. Unless you are a rogue road builder that has the specifiers and application inspectors turn a blind eye

        • Bitumen easier said than done. Nearest supply? Malaysia after that California and we will be number 12 on the list at best as customers. So yeah nah,and again which port has the facilities to handle it in NZ. None at present. Trucking over the Kaimais? How many more Co2 emissions will that entail? How viable is that for the North of the Nth Island? What is your logistics experience Gerrit.My point is NZ investors do not give a fuck they only look at the short term. Our government is incapable of thinking past the end of noses.What could possibly go wrong nothing apparently.Those actually in the industry know nothing. The wise neo liberal business people of NZ know so much they have had to sell to Ampol. Well Ampol do not yet own Z energy. So as I keep saying we continue to be misled. It is Z Energy who has lead this from the start( becasue they are incompetent and not oil industry people) and the rest of the greedy bastards have tagged along,how does this serve NZ’s energy future since you think it’s only about money ?It is Ampol who will repurpose the site and they will not be doing that for kiwis benefit.Hurricane Ida followed by another storm puts out refineries that push up the spot prices daily, countries that import all their fuel have no buffer. We will pay more for our fuel.Dumb as.

          • Shona,

            The port stays at North Port as an import and distribution facility. What has Tauranga got to do with it? Except that it is the import terminal for Gull.

            We are always going to be paying more for our fuel as supply diminishes and demand increases.

            If there is concern about lead times for supply, store more locally.

            Gull and NDP offer the best prices and they import all their fuel.

            Everything is about money.

            And with the Greens wanting ICE powered vehicle imports stopped in 2031 and completely banned on the roads by 2050, what is the point of the refinery?

            We already import all our lubricants and greases, closing the refinery is no biggy. Especially as it relies on the same supply channels for its crude as the petrol retailers rely on for refined petrol.

  4. It is not crumbling. There are no North Port positions commensurate with the engineering skills of the current staff. If we are to have sustainable air fuel and biofuels affordably produced for the NZ market this is the only infrastructure we have . The staff are already leaving for Aussie. Anyone who thinks we are going to stop using fossil fuels in 5 years is delusional. And if you are looking forward to Northland having $40 million dollars a year less going into it’s economy you are also pissing in the wind. Just the decision to stop producing bitumen will really start to bite in 18 months time. Hey but who need roads without potholes?. And of course all our councils can afford to use imported bitumen that doesn’t suit NZ roads and needs constant replacing without raising rates. Looking forward to the rolling fuel shortages starting in 18 months when ship load after shipload of the wrong fuel for NZ conditions keeps turning up and Ampol keeps shipping our locally made jet fuel to Aussie.(cheaper to produce here) Yep sustainable food shortages and generalized chaos coming your way in the North Island. Meaghan Woods is an exceptionally ignorant Minister Of Energy and the Greens( to arrogant to consult with the NZ energy Industry) don’t know shit when it comes to energy and what keeps the NZ economy rolling.The government’s idiotic strategy on energy , i.e.Listen to the PRC, and just keep taking their cash for the Labour Party is a disaster on a par with covid.
    We will never get locally produced biofuels without using this existing infrastructure but that’s too real world for drop kicks like James Shaw.

  5. The oil companies (NZ Refining) through transfer pricing, and controlling retail and distribution, and the pipeline to Auckland! have made huge profits out of Marsden Pt since it was gifted to them under Rogernomics. Another neo liberal travesty of publicly owned and built infrastructure being gifted to private capital–just like power generation and supply under National.

    Fossil Fuel is a sunset industry as it should be, and the vast majority of product to be refined was imported already. As will the pre-refined fuels in the near future. If there was an immediate future for the refinery I would agree with Chris but there does not seem to be one. Hydrogen is not “there yet” and is indeed energy intensive, so clean up the site and repurpose it.

    • Hydrogen will never ‘be there’….it may be used in desperation, but that is it’s ONLY use. Unless the laws Physics follows changes or a supply of freely available hydrogen is found (about as near of a certaintity as anything is, that it does not exist).

    • Bio fuels are repurposing Tiger Mountain. The clean up has been grossing underestimated, the land is owned by Iwi. So they have a say in how it used. Fossil fuel is a sunset industry , duh we all lnow that there are no alternatives on the horizon in NZ. We have a government with zero world experience taking advice from non energy industry muppets who do not want a refinery capable of producing fuel of a standard that can supply military in the Pacific. We have a government with zero geo- political nous and knowledge. We have an energy industry engineering skills base associated with the refinery which we are trashing based on the advice of China. There is a mountain of difference between Saudi crude and the refined product coming out of Korea India and the China. Oh and we will be liable for the carbon emissions of the imported fuel at least 25% of which already arrives and here and is unusable. So yeah nah there is a lot of information not available in the public forum that no one is talking about because they don’t understand what is involved. We have been deliberately misled on this and the government has no energy plan or realistic policy for the development of alternatives. Same with gas and coal which are are now importing more and more of. Duh! Our econmy runs on fossil fuel. End of story . We have done next to nothing to develop alternatives. Hydrogen is too expensive and apart some long haul trucking will never amount anything in NZ. We do not have access to nuclear industry as Europe does guess James Shaw missed that little reality. Oh and rail carry’s more and more freight every year in NZ and is more than viable hence it’s expansion.We are not going to stop using fossil fuel . We will use less and less of course. But this is idiocy from NZ and we will pay heavily. Looking forward to another dose schadenfreude myself.

      • I live in Northland and know a little bit about the refinery through my union contacts, and have met some of the workers there, including one who realised Refining NZ were preparing to bail when an essential part of the process “Catalyst” (look it up on wiki) was not re-ordered last year.

        Mike Fuge the NZR CEO prior to current Australian Naomi James, actually proposed a solar farm on the NiWA/Marsden B site to generate energy for Green Hydrogen, but the board did not want to know and he departed after just 13 months in the job.

        Look, I thought it short sighted too of the Govt. to ditch a national refining capability, but figured if crude has to be imported so does pre refined–but there may well be some crap petrol arriving!

        • And crap fuel has been arriving throughout the covid crisis.In order to pressure the situation for the refinery. Once the refinery is closed we will get duel that fucks up various vehicles. It is a given. Only use BP’s finest in the BMW myself.

  6. Reconfigure the plant to make e85. Work on converting the countries vehicle fleet to e85. EV’s cause too much destruction of the environment and adds to environmental damage in already impoverished poor slave mine ridden countries.
    The precious metals are rarer than oil add the additional mining, are a further cost to the environment and the EV equation v fossil is still imbalanced over the life of a fossil vehicle v Electric.

    • top comment there Denny.Every day we lose more expertise from Marsden Point .Expertise we need to produce alternatives.

    • You have to be having a laugh Denny. Saying EV are environmentally bad and those poor workers. It’s a bit like you’ve never seen any thing bad about the oil industry. Wars, coups, environemtal catastropies, corruption, C02, the list goes on.

      Yep, EV’s are really bad for the environment. And have I got a bridge to sell you…….

      What are you drinking? You’re NOT even close with the ‘whole of life’ equation.

      EV are NOT the solution, but of all the options, it’s the only realistic one, other than mass public transport.

  7. Brilliant business thinking Chris!!! A no-brainer. Plus, a new ‘Kiwifuel’ outlet could maybe be set up too, at same price levels as the smaller independents. And on that note, I can guarantee you it will never happen. This govt simply does not appreciate brilliant business ideas.

  8. speaking of sunset industries I remember Roger Douglas and Mike Moore spinning the same crap about agriculture in the 1980’s. You know the industry that is making our economy so healthy at the moment, and runs on fossil fuel. We piss ourselves laughing when the electric car adverts come on and they have a Electric tuktuk runabout to replace a Landcruiser! as if !

  9. Informed comment on here. I don’t like Oz having control of it, why not government – they then could try various options. Try looking ahead and allowing for stuff-ups.

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