Marsden Point refinery closure threatens energy security, Maritime Union says

Saturday, 7 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.

The closure of the Marsden Point oil refinery will threaten energy security, the Maritime Union says.

National secretary Craig Harrison said security and resilience were now the two most important factors for the economy. The closure of the refinery was corporate self-interest and not in the wider interests of New Zealand.

It was disturbing that the lessons from Covid and the flow on disruption to our supply chains were being ignored, he said.

“Exposing New Zealand further to a highly volatile international situation is reckless.”

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The closure of the Marsden Point oil refinery appears to have suddenly become less certain, but the company appeared to have no knowledge of proposed talks on Tuesday.

On Friday, Energy Minister Megan Woods offered her sympathies to hundreds of workers at the Marsden Point oil refinery after Refining NZ shareholders voted overwhelmingly in favour of its closure.

The result of the vote had been a foregone conclusion, with fewer than 1 per cent of votes ultimately cast against the key resolution.

The decision would see Refining NZ switch to distributing pre-refined fuels that are likely to be imported from refineries in Asia and potentially Australia.

Harrison said that crude oil imported into Marsden Point provided wider supply options than relying on imports of refined fuel.

Other countries were moving to enhance their fuel security and there needed to be an urgent review by the Government, who seemed to be getting bad advice, he said.

Processed fuel from Marsden Point was currently supplied to distribution depots in ports by New Zealand flagged and crewed oil tankers.

The future of the country’s domestic coastal tanker supply was also in danger, an essential service that was called on when the pipeline ruptured between Marsden Point and Auckland in 2017, he said.

“As we have seen in the container trade, New Zealand cannot rely on foreign ship owners to have our best interest at heart.

“Marsden Point is more than a profit statement on a balance sheet, it gives New Zealand resilience in a global market.”

In March last year a consultant’s report to MBIE outlined eight risks to ending refining at Marsden Point, including no ability to process crude in a global supply emergency, not ability to correct imports that were not up to standard and reducing the overall fuel stock in the country by between a quarter and a third.

Lessons from Australian refineries following closures showed that in most instances conversion to a terminal facility was required to ensure infrastructure was available for supply security. In all cases the closures had been associated with loss of coastal tankers due to the reduced need to move product around, the report said.

The closure is expected to result in the loss of about 240 of Refining NZ’s 300 jobs, and to cost hundreds more jobs among suppliers.