Oil companies need to be held to account in New Zealand

Recently it emerged that New Zealanders pay up to 30 cents more per litre of product than the company importing the petroleum paid after tax. This came after a study found that the retail petrol market has features that make it not consistent with a working competitive market.

But should we be surprised? Not at all.

It has been a priority of this Government to permit oil and gas companies more exploration space in our waters. To ensure it has been able to go ahead without environmental protesters getting in the way, it even passed under urgency, laws attempting to criminalize the peaceful assembly of protesters on the high seas, permitting the Royal New Zealand Navy to be used as an arresting force.

Past Ministers for Energy and Resources have shown little inclination to act on concerns about petroleum companies conduct in terms of being fair players before the New Zealand Commerce Commission. So it was a pleasant surprise to hear that the current Minister of Energy and Resources, Judith Collins has demanded a report that should have been called for some time ago.

New Zealand has a few major players who take out most of the retail fuel market. They include Z, which entered the market in 2010 and acquired the old Shell stations. The other major players are B.P., Caltex and Mobil. Independent players such as Gull and Allied occupy significantly smaller parts of the market pie.

Part of the need for bringing petroleum companies to account for themselves deals with social and environmental pressures. Whilst oil companies in New Zealand might not commit environmental and human rights abuses as they do in places like Nigeria, the perceptions of improper ethics and legal conduct certainly do.

These, but also due to growing concerns about climate change, the Government needs to take the lead and set an example for the oil companies to follow. Part of it to make them realize that biofuel will need a lot of the infrastructure that is currently used for petroleum production. Thus refining and transporting is still going to be needed, as is a company to market the product.

One of the ways it could do this is to establish a national biofuel programme with buy in from the companies. To start the process a cross party working group should be established with three separate tasks:

  • Establish the economic feasbility of a biofuel progamme
  • Determine potential fuel sources with emphasis on waste stream product
  • Determine acceptable standards of biofuel for New Zealand motor vehicles

There are elements of the New Zealand political spectrum who see no future for petroleum. The sheer number of vehicles on the road, both here and abroad means there will probably always be a need for petroleum and in supplying that, there will also be a need for companies to supply the product to the New Zealand market. And at the other end there are politicians who see only the monetary and commercial gains to be had from petroleum, where the dollar blinds them to their social and legal responsibilities.

So whilst we might be reaching peak petroleum and the companies that sell this might be getting criticized for products that are increasingly being linked – rightfully or wrongfully to climate change – there is still a place for them in the future, but they need realize there is a life beyond petroleum.

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