Time for a petrol price inquiry

I have read of petrol reaching another all time high price in New Zealand today. This is on a commodity that in December 2017 New Zealanders were paying one of the highest pre-tax (i.e before tax added) prices in the world for. Due to some countries like the Netherlands having substantially higher taxes on fuel than New Zealand, we come in about mid field in the O.E.C.D. for total price after tax paid.

Do we need a goods and services tax (G.S.T.)on petroleum and diesel? I am not sure of the answer to that. The Automobile Association New Zealand has long called for a removal of G.S.T. on fuel, and says that it would lower petrol prices by 10c/L, and reduce pressure on already pressurized budgets.

Sure there is a petrol tax coming and petroleum companies do not want to have dollars shaved off their profit, but since when was that new? Sure the Middle East looks dicey at the moment – but that is the way it has been for most of the last decade. Sure there are costs incurred in refining product and getting it to the market, but again, that is the way it has been for yonks.

Basically it is theft and New Zealanders are blindly thinking “she’ll come right” eventually.

Well, no. It will not come right unless we kick this mentality that has cost us much as a nation, and is set to cost quite a bit more before long, to the curb. This notion that somehow the market will correct things and petroleum prices will come down is stuffed.

So, who is going to petition the Minister for Energy, Dr Megan Woods about the disgusting theft that petroleum companies are getting away with? There is no justification for any of the companies whose global parents hundred hundreds of billions of dollars (U.S.)per annum and are comparable in some cases to G.D.P.’s twice as big as New Zealand to not pay tax in full and on time.

Exxon Mobil NZ in 2017 made N.Z.$143 million profit, up 57% on the previous year. In the same year B.P. New Zealand increased its profit 65% to N.Z.$243 million and Z Energy increased their profit in the same time to N.Z.$263 million

It would cost me $100.80 to filll a 1.4 litre Hyundai Getz from completely empty at $2.24/L. A 3.0L Toyota Surf would cost $89.05 to fill its 65L tank with diesel at $1.37/L.

Yes, we need to be cutting down on carbon emissions, but until there is a serious uptake in electric cars, which still have a number of barriers in the way and hybrids, New Zealand is not going to make inroads on its Paris Accord obligations. But to get there, those vehicles must first become more affordable. Right now a hybrid or electric vehicle is simply not in the budgetary of many New Zealanders.

Time to be bold on fuel

When the Government made the announcement that oil and gas would be phased out in New Zealand there were a lot of incredulous people across the political spectrum. They ranged from those who hoped for that day, but were concerned that politicians would shy away from making such an announcement, to those who worked in the industry and were scared that it would mean the ends of their livelihoods. And then there were others, such as myself sit in the middle, not quite believing such a day will actually happen, and think that those in the oil and gas sector will be able to find work.

Why? Contrary to the assumptions of many, there is considerable expertise in the oil and gas sector that could be employed in other energy projects, and not just in Taranaki or Northland.

How do I believe that this can happen?

One idea that I have long liked is exploring the feasibility of creating a nation-wide biofuel programme using material from the waste stream. This is an idea that has some investment in it already – Gull uses dairy waste to create a biodiesel. It has also experimented with the waste from beer. It uses 10% bioethanol. Ethanol is a key part of the fuel in recent car types, so having a bioethanol source will help to reduce the carbon emissions from our fuel. If other companies such as B.P., Z, Caltex and Mobil were to follow the lead of Gull, scope would exist for a significant reduction in vehicle emissions from burning fuel.

New Zealand needs to be bold. Right now it is suffering from severe aversion to radical overhaul of how and what our vehicle fleet consumes in the way of fuel. Yes, the Government sees a day when New Zealand will be carbon neutral, but does not have a working blueprint to get there. Nor does it see the potential alternatives sources that biofuel – a catch all term in my opinion for all fuels with a biological base, such as waste matter – can offer.

To do this we will need infrastructure. Should a feasible type/s of biofuel be found, there needs to be a means of collecting the waste matter that would be used. Having collected, there needs to be a drop off point with storage for it near a refinery that can turn it into the appropriate product/s. To have this infrastructure work we need skilled labour and that already exists in the form of the people working on energy projects in Taranaki. The skills and knowledge required would encompass the full range of skills currently available among the workforce in Taranaki.

To do this, the Government needs to be bold and open a dialogue with the oil and gas workers in Taranaki who will otherwise think that they are going to be shafted. That should not be the case, and certainly not if we really want true energy independence without having to rely unduly on the likes of B.P., Caltex and Mobil whose interests are purely corporatized and not necessarily in the interests of New Zealand or New Zealanders.

Contrary to National’s belief fossil fuels are not dead – YET

Contrary to the belief of the National Party, the Government has no plans for a ban on coal. Part of this is pure necessity, ensuring that during dry seasons in the hydro-electric catchments where rains have failed to keep the hydroelectric storage lakes of the lower South Island and the Waikato power scheme topped up, the Huntly power station can still be started. It runs on coal and gas.

Part of the absence of a ban also rests on an acknowledgement that there is still a demand for New Zealand coal overseas, especially in China and Japan, with coal mining making up a significant part of the West Coast economy. The railway line from Ngakawau, north of Westport down to where it meets the Trans Alpine line is largely paid for by coal coming out of mines in this area.

There are other things that can be done first before any ban include:

  • No longer mining lignite or sub-bituminous coal which has a higher sulphur conent and releases
  • Focus on bituminous and anthracite coal which burn better

Power stations at Whiranaki in Hawkes Bay and Stratford in Taranaki are diesel fuel and natural gas based operations, respectively, that have installed capacity of 360 megawatts. Like Huntly, these are normally held in reserve unless there is a dearth of hydroelectric power available.

Contrary further to the National Party’s claims of fossil fuels being banned in the near future, Minister of Energy Megan Woods has stated that she can see oil and gas still being used in 50 years time. The reason for this is simple. National has ignored the finer print of the message and claimed that oil and gas will stop quickly, whereas the ban only exists on new exploration.

The claims made by New Zealand Gas have been completely dismantled by economic commentator Rod Oram. Among some of the rebuttals were:

  • Having the right geology – whilst true of Taranaki, it cannot be so easily said for the Canterbury Bight
  • The economics would suit New Zealand – actually the U.S. is becoming a major exporter, and the cost of selling N.Z. product at a price beneficial to both customers and shareholders alike is not likely to suitable
  • The fisheries will be okay – New Zealand has superb fisheries that are the envy of many nations, which is one of our biggest comparative advantages
  • The environment can survive an oil spill – The moves to protect the Southern Ocean fisheries aside, National slacked off in a big way on affording our marine environment the protection it badly needs and did not seem to think our capacity for dealing with an oil spill needed overhauling
  • No need for alternative sources – biomass is slowly becoming more popular; substantial research is going into other alternative energy sources, meaning the decline of gas is in some respects natural

Whilst it is true there is still an immediate future for fossil fuels, the long term outlook strongly suggests something approaching a gradual yet nearing terminal decline. New Zealand and the world are moving on, and at some point, N.Z. Gas will have to accept this.

Government to end oil and gas permits

On 12 April Prime Minister Jacinda  Ardern announced that Labour, in agreement with its  coalition partners New Zealand First and the Green Party of Aotearoa New Zealand is not going to issue any more oil and gas permits.

I am concerned that this is just political machinations at work and that just like the National Party with so many issues, not enough thought has been given to how such an announcement will impact on New Zealand. The Government can say that yes it has delivered on its promises and that means it is getting things done – just like National who I notice parroted every announcement former Prime Ministers John Key or Bill English or one of the Ministers made.

Yes, from an environmental stand point this is good news – a good start at least. But let us get real here. I have a number of questions from pure transport perspectives alone, never mind getting into the potential effects on social policy, the energy sector and so forth. Such as:

What thought has been given to how and where non electric vehicles are going to get their fuel from, other than expensive fuel imports from overseas?

What thought has been given to the fact that New Zealanders are grimly hanging onto their Toyota Corolla’s, Surfs and so forth because newer, cleaner vehicles are too expensive?

Even hybrid’s need to come down in cost before they have a chance of becoming plentiful.

People do not seem all that enthused by the advent of plug on points to charge their cars. And the simple idea of having to plug a car in to charge at some point is likely to turn many off from wanting an electric car. All of you who are applauding today’s announcement understand this don’t you?

Will some sort of road/transport/government working group be established to look at biofuels and alternative sources and the issues that New Zealand may confront if it finds a sustainable source?

The Green Party and Labour surely understand that one is unlikely to ever quite get rid of petroleum and diesel. New Zealand, like most western countries is probably not going to fully wean itself off either and that service stations will still be around for the foreseeable future at least.

I am sorry, but unless you can address these questions and others that will arise, I am NOT on board. This is basic planning for New Zealand’s future. Grand sweeping announcements like this look great, but are completely meaningless unless backed up by solid policy and implementation.

Common sense really.

Government considers moves to end oil exploration

I have serious questions about the consideration of a move to end oil exploration that was announced by Prime Minister Jacinda Ardern today. It is not that I necessarily agree with the exploration so much as I seriously wonder how much of this is not simply pandering to ideology.

It is true that oil exploration does indeed exact a substantial environmental toll. One only has to look at the devastation caused by Royal Dutch Shell and other companies in Nigeria to realize that the ecosystem suffers severely. On the Niger Delta in many places the ecosystem is effectively devoid of aquatic life. Another aspect is that the companies that engage in it are not exactly good corporate citizens in terms of social responsibility – Shell hired security for its facilities in Nigeria who happened to be from different militias, with the result being significant human rights abuses being committed.

Whilst I do not expect to see this happening in New Zealand, I wonder how much tolerance they will have for the right to protest peacefully on the high seas. The Government of former Prime Minister John Key amended the Crown Minerals Act in 2013 to effectively criminalize peaceful protests at sea.

It is perhaps the lack of planning that has obviously been done that bothers me the most. New Zealand is a very fossil fuel oriented country when it comes to transport. Whilst hybrids and electric cars are available in small numbers they only make up a fraction of the total car fleet. That fleet is getting older as New Zealanders shy away from expensive new models and hold on to their older Toyota Surfs, Hyundai Getz’s, Holden Commodore’s. It is not uncommon to see an early 2000’s or late 1990’s Toyota Surf with say 350,000-500,000 kilometres on the clock. None of these cars will be very fuel efficient compared with the Toyota Highlanders, Camry’s and Previa’s of now, or the newer model Hyundai Imax vans and so forth.

One problem is the cost of buying a new vehicle. For many low-middle income earners, their wages have been largely static for the last several years whilst fuel, maintenance and registration costs have all increased. Unless incomes substantially increase, many New Zealanders will only replace their vehicles when they die, get stolen or their individual needs change.

Another problem is that Labour and National have diverging priorities on transport. Labour favour public transport, railways and less emphasis on building motorways. It will have to compete with differing ideas such as New Zealand First’s Railways of National Importance, which aims to improve the rail network around New Zealand.  National’s Roads of National Significance programme cost New Zealand about N.Z.$12 billion and did not address the genuine need in many rural areas for improvements. These included items such as getting rid of the one way bridges on the West Coast, improving the passing lanes on roads other than State Highway 1.

A third and perhaps debatable problem is the actual investment and research effort being put into going fossil fuel clean. If one replaces fossil fuels that assumes a sustainable replacement fuel can be found. So far biofuel for vehicles in New Zealand is still in its dark ages.

Whilst trains could become electric and the diesel locomotive fleet is replaced, I cannot see electric trucks catching on. Where there exists scope is to increase the amount of freight being moved by railways. This is particularly so along the east coast of the South Island in the post-earthquake environment around Kaikoura where trucks have always found it difficult navigating the twisty and narrow corners.

In short I think Labour is trying to achieve something that is not going to happen. Fossil fuels in New Zealand will hang on grimly just like smoking will.  The socio-economic gains of totally getting rid of fossil fuels might not be worth the costs