'Devastated' workers and Northland leaders upset with oil refinery closure

Friday, 6 August 2021

RNZ's podcast The Detail looked in August at the history of Marsden Point, and why some people were warning that closing it could put the country's fuel security at risk.

Refining NZ’s shareholder vote to turn Marsden Point refinery into a fuel import terminal has been described as a huge let-down by some of the 240 employees who stand to lose their jobs.

The yes vote effectively ends oil refining in New Zealand, and will shut down most of the Marsden Point site from mid-2022.

A total of 240 workers, out of the 300 employees will be made redundant, while 80 per cent of the approximately 200 contractors on site are also set to be out of work.

“If you are working just one hour a week, while drawing Jobseeker Support, you won’t be counted as officially unemployed. It’s an abject nonsense.”

Aaron Holrowd, a refining operator for 35 years and First Union’s site delegate, said the decision is a “massive disappointment” but not a huge surprise.

**READ MORE:

The Marsden Point oil refinery is set to stop refining crude oil and will become a fuel import terminal. (File photo)

* Refining NZ shareholders approve closure of Marsden Point oil refinery

* What is the Refining NZ vote and what does it mean for oil industry and Northland?

* Northland holds breath ahead of vote on turning Marsden Point into fuel import terminal

He said the company is making “poor decisions”.

Refining NZ, which refines all of New Zealand’s jet fuel, was significantly affected by Covid-19 lockdowns and the major drop in air travel. It only managed to break even by simplifying and relying on a $115m subsidy from customers.

The oil refinery at Northland’s Marsden Point will close in April and the land will become a fuel import terminal.

But Holrowd said the pandemic was a one-in-100-year event and not a reason to close.

He would like to see the Government intervene, for fuel security, by paying a subsidy to keep refining going, as the Australian Federal Government recently did with a $2 billion fuel security package.

He fears the country’s fuel security could be interrupted by a crisis, as New Zealand would not be able to get fuel tankers to sail down here with reserved stocks.

Refining NZ chairman Simon Allen says the refinery faces challenges due to its small scale and the rising costs of energy in New Zealand. (File photo)

The refinery could also be used to manufacture alternate fuels, making the most of the skills and knowledge available, he said.

If the closure goes ahead, Holrowd said he will be looking for work from April 2022.

Energy Minister Megan Woods says stopping refining won't increase fuel supply risks.

He is considering returning to his marine engineering trade, although he might consider an early retirement.

“Between now and April next year, our union will be lobbying to keep it open, and pointing out the craziness of the current decision-making.”

But Refining NZ chairman Simon Allen told the shareholder meeting the financial returns from refining had not been satisfactory for some years.

Under the import model, Refining NZ will be renamed Channel Infrastructure NZ, and would run New Zealand’s largest fuel terminal, he said.

“We will continue quality fuel testing services both at the Marsden Point site and around New Zealand.

Whangārei mayor Sheryl Mai says the decision to stop refining oil could be a step forward for more sustainable energy production, such as biofuels. (File photo)

“Fuel from Marsden Point would be distributed primarily to the Auckland and Northland markets through the 170 kilometre refinery-to-Auckland pipeline and the truck loading facility located adjacent to the Marsden Point site,” he said.

Energy Minister Megan Woods recently said she was not concerned the country's fuel supply would be put at greater risk, should Refining NZ stop refining.

This is because the model is already reliant on importing crude oil, she said.

Woods said there is an international trend to move to super refineries of scale.

Whangārei mayor Sheryl Mai said she felt for the workers.

“I can’t say enough about my concern for the people whose jobs and livelihoods have been impacted by this decision … Everybody’s hearts go out to them.”

But Mai said she did not think the Government subsidising oil refining was the way forward, with a preference for more sustainable energy like biofuels, hydrogen and solar.

All three have been considered by Refining NZ as possible uses for the 82 per cent of the Marsden Point site not needed for a fuel import terminal.

The refinery is responsible for about 7 per cent of Northland’s GDP (gross domestic product) and Mai said that would be a huge loss.

However, with the north being one of the fastest-growing regions, she did not think the effect would be as bad as closures in other areas, such as the threatened end to Tiwai Point smelter.

Mai said she would like to see other industries to replace the high-skilled, highly-paid jobs at the refinery, such as an expansion to neighbouring Northport.

Resource consent will soon be lodged for the expansion, including a commercial shipyard and 250m-long floating dry dock, which will provide up to 400 jobs.

Whangārei MP, Labour’s Emily Henderson, was also “devastated” by the vote.

“Obviously, this is really hard. My heart and thoughts are with the workers, their whānau, and also the many small businesses around town who provide contractors. I’m really devastated for them.”

She encouraged anyone impacted to get in touch with the Ministry of Social Development, or herself.

Henderson said she and Woods were both committed to investigating viable alternatives for the refining site.

“I still believe Whangārei has a really bright future – we’re still looking at what that will consist of.”