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Refinery Closure A Serious Strategic Mistake

05.08.21

A decision at tomorrow’s shareholders meeting meaning New Zealand's capability to refine oil will be shut down and Refining New Zealand then becoming an importer of pre-refined fuel would be a serious strategic mistake.

Such a move would put New Zealand at the mercy of international oil powers or geo-political events and remove completely our ability to source oil from multiple sources across the world, or within New Zealand should it become necessary to seek alternative sources.

The refinery produces very high quality aviation fuel, prized by international airlines, and can handle the cheapest, lowest quality crude oil feedstock due to its advanced hydro cracker process.

The oil company shareholders dominating the share register who are pushing for the refinery to close are doing so because they can make more profit from their overseas refineries where wages and other costs are cheaper.

Their interests do not align with New Zealand’s interests, so the government should classify the refinery as a strategic asset and step in and compulsorily purchase the necessary shares to turn it into an SOE.

It could do that very easily and without cost to taxpayers, by using the same money creation process the Reserve Bank has been using to buy government bonds off rich investors, banks and speculators.

Returning the refinery to New Zealand ownership would reverse the privatisation of it undertaken by Labour in the 1980's, and should be the start of more strategic assets being bought back - a process that would be undertaken by a Social Credit government.

New Zealand owning the refinery would retain the expertise of the existing staff, contractors and support businesses, keep that employment and income in Northland, and ensure a greater level of fuel security.

The refinery could even be run as a zero profit enterprise which would bring fuel costs down for New Zealand motorists, the transport industry, and roading contractors who use bitumen the refinery used to produce.

Cutting transport costs would help keep the price of goods in the shops down as lower transport costs should flow into lower wholesale and retail prices.

While a move to alternative fuels like hydrogen and ethanol are important, with the government as shareholder the refinery could still continue to develop those options in an effort to move New Zealand towards a more self-sufficient energy position.

© Scoop Media

 
 
 
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