Refinery rethink welcomed but still shortsighted

02 November 2021

by Chris Leitch, Leader

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Social Credit welcomes the release of the government’s rethink on the potential closure of the Marsden Point oil refinery, but calls the cabinet paper “lacking in depth and missing significant wider issues that it should have considered”.

Widespread pressure to keep the refinery open from unions, groups like the Sustainability Council, and our petition has clearly driven a major re-think on the government’s position on the closure.

The assessment of the likelihood of supply chain problems with refined fuel is based on the past, not the current situation, nor future geo political scenarios with increased tension between the US, Australia and China.

The report acknowledges reliance on Australia for refined fuel is unlikely and suggests that other countries would likely come to our rescue, but without exploring how that might play out.

The potential for a green energy hub at Marsden Point, which might include carbon capture, plastic to fuel, or a waste to energy plant is also sadly lacking from the considerations.

There has been no account taken of the potential to reduce costs at the pump or provide ease of access to the fuel retail market for other potential players if the refinery was to become government owned.

Instead it proposes consideration of a subsidy from taxpayers to a commercial entity with private shareholders, and acknowledges that there is a strong likelihood there will be a need for significant taxpayer funding to develop biofuel production and sustainable aviation fuels.

The report from Air New Zealand to the government in May specifically notes that taxpayer support for that will be required.

Instead of dipping yet again into taxpayer’s pockets and transferring wealth into the pockets of wealthy shareholders, the government should compulsorily purchase the shares from the existing shareholders and turn the refining company into a state owned enterprise.

That could be achieved at no cost to taxpayers, using to capacity of the Reserve Bank which has already created around $60 billion in the last 18 months to buy government bonds off rich investors, banks and speculators.

The report also does not sufficiently consider the effect of the potential closure on the large number of contractors that service the refinery site, many of whom will have to lay off staff, leading to a significant downturn for the retail sector and more job losses.

The move to alternative fuels like hydrogen, biofuels, and ethanol is important, and with the government as shareholder the refinery could continue to develop those options in an effort to move New Zealand towards a more self-sufficient energy position.