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