Auckland jet fuel woes: Warnings stretched back to at least 2005

Monday, 18 September 2017

Energy and Resources Minister Judith Collins visiting Refining NZ in June.

Warnings about Auckland's fuel vulnerability date back more than a decade, with the last Labour Government alerted to the problem as far back as 2005.

On Monday morning Labour leader Jacinda Ardern accused National of failing to secure supplies to Auckland Airport, after taking a 'short-sighted' approach to warnings.

Jacinda Ardern says businesses and travelers have been 'let down' by National after it failed to react to warnings about Auckland's fuel vulnerability.

The severing of the fuel line which links the Marsden Point fuel refinery and Auckland has raised questions about the vulnerability of supply to New Zealand's largest city.

Virtually all of Auckland's supply comes through the single pipe, which is expected to be out of operation for at least 10 days.

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Chief executive of Refining NZ Sjoerd Post with Energy and Resources Minister Judith Collins.

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In 2012 the Ministry of Business, Innovation and Employment (MBIE) warned that a nine-day disruption to the line would have significant impact on flights to Auckland.

Ardern called on National to 'come clean over its failure to secure fuel supply for the airport'.

'The Government has known for years that there were risks to the security of supply of fuel into Auckland, and particularly jet fuel to Auckland Airport. And they have only got worse as the city grows and air traffic expands.'

Ardern pointed to a 2012 Cabinet paper which raised the possibility of a new fuel terminal in West Auckland, costing around $57 million.

The Government did not take up the option - which was backed by Air New Zealand, instead recommending more minor initiatives.

Ardern said this was a 'short-sighted' response.

'The Government needed to place a much higher priority on building resilience in the industry to withstand the shocks we are seeing today,' Ardern said.

'This was an opportunity to show leadership, and genuinely invest in New Zealand's infrastructure. Instead New Zealand businesses and travellers have been badly let down.'

Labour too, was alerted to the issue. In 2005 the Ministry of Economic Development (which is now part of MBIE) commissioned a report from Covec and Hale & Twomey on New Zealand's security of supply.

That report also warned that a three week outage on the line which connects the refinery to Auckland would cause major disruption to aviation, and could mean companies would struggle to supply petrol to motorists.

'Companies who use the RAP pipeline noted that if the pipeline was unavailable for a significant period (more than 1 week) they would have difficultly in maintain petrol and diesel supplies (although it may be possible for a some time) and maintaining full jet fuel supply to Auckland Airport was likely to be infeasible.'

Energy and Resources Minister Judith Collins said while Labour was 'excited' by the 2012 report, it was clear the industry had been warning about the risks for a long time.

'It's pretty clear that it's been well known by the industry, by the Ministry, by everyone, as an issue. But the issue has always been around how do you get the resilience, without a massive cost to the consumer.'

Green Party leader James Shaw said as he understood it, the Ministry of Business, Innovation and Employment wrote a report about the scenario in 2012.

'This is the kind of level of planning that I've got to expect from the National Party actually, which is that they tend to think very much in terms of the short term.'

The airport was critical infrastructure for the economy and 'the government has a role in ensuring we've got fuel security', he said.

'It just shows the precarious nature of our infrastructure and how easy it is to literally put a hole in it.'

It would be 'kind of the height of irony' if half the campaign teams were grounded in the final week of the election campaign, Shaw said.

'I don't think that's likely to happen, but there is a risk.'