Fuel Industry (Improving Fuel Resilience) Amendment Bill

I present a legislative statement on the Fuel Industry (Improving Fuel Resilience) Amendment Bill.

ASSISTANT SPEAKER (Hon Jenny Salesa): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon PEENI HENARE: I move, That the Fuel Industry (Improving Fuel Resilience) Amendment Bill be now read a second time.

I want to thank the Economic Development, Science and Innovation Committee for the work that they’ve done on this particular bill. While I note that, sadly, they were unable to come to a full agreement on that particular committee, they still, however, made some rather good suggestions to ensure that this bill is a strong bill moving forward. Therefore, I think it’s important that we cover off what some of those suggestions were and how those suggestions will continue to make sure that this bill is a good bill into the future.

Just by way of background, though, the Fuel Industry (Improving Fuel Resilience) Amendment Bill is designed to help ensure that we have sufficient petrol, diesel, and jet fuel in New Zealand to weather major disruptions to our fuel supply. Many of us in the House, here, will recall when there was significant disruption to our jet fuel supply. And, in particular, myself and other MPs based in Auckland were subject to a number of those rather huge disruptions. In order for our country to be productive, it needs strong infrastructure and it needs the ability for people, in particular of the great city of Tāmaki-makau-rau, of Auckland, to be able to get around the country. The disruptions were significant and, sadly, very costly. That’s why it was important that this Government take action on how we might be able to create resilience in the supply of fuel—petrol, diesel, and jet fuel in this country.

What we noticed too, of course, was that with the more frequent severe weather events that we’ve been experiencing here in New Zealand, it’s become even more apparent why we must create resilience. While I already gave the example of Tāmaki-makau-rau, I can already tell the House that in my visit to the Hawke’s Bay region and the Tairāwhiti region after Cyclone Gabrielle, one of the biggest challenges was getting supply of fuel in there in order to operate the heavy machinery to clear roads, to clear pathways, to clear houses; it was clear to all of us that we needed to do more here.

Therefore, the Government made an announcement that looks towards how we might create more bulk-storage facilities to ensure that we have national levels set in order for us to have confidence in our resilience, that we can have a stockholding level that we can all agree upon at a minimum to make sure that our country isn’t severely impacted by these. To meet the obligations, though, fuel importers will not necessarily have to make significant investments in fuel storage facilities; however, some of them may need to change their stock management practice to reduce fluctuations in their stock levels.

Some of the changes that the select committee recommended, we consider to be very good changes, on behalf of the Minister. So I’m going to cover off a couple of those. The bill, obviously, was referred to the Economic Development, Science and Innovation Committee on 6 June 2023. There were a number of submissions; 11 in total, and eight of those were heard in oral presentation. So a big thankyou to those who did make a submission to the select committee. One of the ones that we feel, I think, is important to amend in the bill as it progresses is the commencement date. The bill, as introduced, provided for the bill to come into force by Order in Council no later than two years after the date on which it receives Royal assent. That means, if the bill was passed as introduced and the regulations were made by early 2024, the minimum stockholding obligation could come into force in early 2024. Some submitters were concerned that this date was too short, and that they needed a bit more time to look towards the infrastructure and what they’ll need to do to become compliant with this particular legislation. So, therefore, the select committee recommended that the commencement date be amended to give certainty, to oblige parties by bringing the information disclosure provisions in the bill into force on 1 July 2024, and the remaining stockholding obligation provisions on 1 January 2025.

It also became clear during the select committee that the bill, as introduced, caused some confusion as to how the calculation method of the obligation works. Some submitters did not understand that the minimum level of cover for the initial period is intended to be met on an average basis and that this is an average of daily stock level estimates for a month. The committee recommended amending the definition of a “variable a” in the formula, which is the obliged person’s stockholding obligation, to clarify that the required minimum stockholding volume must be met on an average basis.

In the bill, as introduced, “average daily demand”, which determines the obliged person’s stockholding obligation, is the average over the 12 months immediately before the compliance period. Some submitters noted that fuel imports are typically ordered three or four months ahead of delivery, which means that an obliged person would have to order fuel up to four months before knowing with certainty what its stockholding obligations were in the compliance period afforded by the bill. So the committee recommended that the obliged person’s average daily demand be based on the obliged person’s average daily offtake from bulk storage facilities over the 12-month period, four months before the compliance period.

One of the other recommendations from the committee was one that this Government agrees with. As the bill was introduced, the penalty was for half a million dollars—$500,000—for each act or omission. In response to some of the concerns from the submitters, the committee has recommended that the maximum pecuniary penalty be set at $100,000. On behalf of the Minister, the Minister is satisfied that this lower penalty will continue to be a significant deterrent, in order to bring people into compliance.

The select committee also recommended several amendments to clarify processes that could apply when an obliged person is temporarily unable to meet the stockholding obligation. Exemptions to the minimum stockholding obligations may be granted by the Minister, with some conditions, in exceptional circumstances, of course. This would provide the Government with more tools than just prosecution through the courts.

To provide more clarity and flexibility about how these provisions on exemptions and enforceable undertakings are used, the select committee recommended a number of changes. I’ll just list them very briefly: providing for the Minister to grant an exemption if a series of events or circumstances prevent an obliged person from complying with their obligations, allowing regulations to prescribed circumstances that will be grounds for an exemption, clarifying that other instances of non-compliance or potential non-compliance may be addressed by enforceable undertakings, and clarifying that obliged persons can seek agreement from the chief executive for a path to compliance in circumstances where they are unlikely to meet the obligation by the commencement date. All, I think, pretty pragmatic and sensible recommendations.

So, through the select committee process, we now have a more robust bill. The bill has been carefully designed to increase our fuel resilience in a way that will limit potential price impacts on our consumers.

Recent jet fuel disruptions, as I discussed earlier, were really significant, and, as our country reopens to the world after the pandemic of COVID-19, it’s important that there is the resilience in our infrastructure to make sure that the visitor numbers that come to New Zealand can get out and about across our beautiful country. It’s a lifetime dream of them coming here, and I can tell you, Madam Speaker, that the raw data from the Auckland Airport, through the FIFA Women’s Football World Cup, has already proven that we must make sure that the resilience is there to cater for the thousands and thousands of visitors that came during that particular amazing event.

This bill will mitigate the extent to which New Zealand is exposed to fuel-disruption scenarios. On behalf of the Minister and this Government, I’m pleased to commend it to the House.

The question is that the motion be agreed to.

Oh thank you, Madam Speaker. It is a pleasure to speak on the Fuel Industry (Improving Fuel Resilience) Amendment Bill.

The National Party is supporting this bill, although we do have reservations about the speed with which this bill has gone through the process—although we were ably chaired by Naisi Chen at the Economic Development, Science and Innovation Committee; her attention to the time that is allowed for speakers and for submitters is legendary, actually. She’s quite a stickler for time, but that is great. We needed to have that on this bill in particular, because we didn’t have the time that we needed to consider it fully.

Actually, the closure of Marsden Point has brought all this about and that happened quite a long time ago. That this bill was only introduced in June is actually quite unforgivable. This is a really important issue. As the Hon Peeni Henare mentioned before, the disruptions with the jet fuel are quite significant. For example, airlines were required to tanker. What that actually means is that instead of having enough fuel in, with the normal safety reserves, they had to often fill the tanks right to full to take a journey, so they had enough fuel for a safe return journey as well—with more passengers on. So it actually cost them a lot of money. It also meant that some international flights had to fly with low fuel loads to Australia or Fiji and then refuel and continue on—extra landing fees; all those sorts of things—when, actually, airlines run on very small margins. They’ve got a huge capital expenditure upfront for the aircraft, all those operating costs—it really made a big difference.

So fuel security is a big deal for us, and that came about because a shipment of fuel that arrived at Marsden Point was not up to the fuel specifications. It is quite comforting to know that the fuel specifications are so rigidly applied for the aviation sector. Obviously, you can’t pull over to the side of the road when you’re halfway across the Pacific, so it’s absolutely essential we get that right.

There are also issues that occur with other fuel, particularly with diesel, where we have one specification and we have winter diesel and summer diesel—which people don’t really appreciate. So the chemical composition of those fuels does change, and other countries have different specifications to us. But diesel was much easier to blend to deal with those issues, should a shipment arrive not to the specifications that it was ordered under.

So these current rules—the required minimum stockholding obligations are calculated on previous years, as the Minister alluded to. But it’s 28 days for petrol on average, 24 days for jet fuel, and 21 days for diesel. It was raised in select committee that diesel being lower than petrol is the wrong way around, because, actually, when the Christchurch earthquake occurred, it was diesel that was in short supply, not petrol. When civil emergencies occur, that will be the way it works, because all the emergency services utilise diesel, not petrol, for their fire service, for ambulances, and so on. So that, we believe, is wrong, and the wrong way around. So there was quite a bit of discussion about that sort of thing.

So it’s only June, we’re here now. Is that a good process? Well, not quite. Could have been a lot better. But, actually, the current, or the latest, fuel storage data that I have that’s on hand is 43 days for premium petrol, 40 days for regular petrol. There’s 47 days, at a current rate of consumption, with jet fuel on hand, and 21 days for diesel. Again, diesel is the one, as I just alluded to, that should be higher than any of the others, but it’s not, unfortunately.

The Minister went through some of the issues that were raised and the changes that we made, and I think it’s quite important that we go through that. There were 11 submitters and eight that appeared before the committee. They all brought helpful and useful suggestions—and this is the whole point of the select committee process, of course. But I think it’s often lost how collaboratively we work, often, in select committees—particularly when you’ve got good submissions, as we had, from the sector that affected all the nuts and bolts of that and how the legislation might work. We were able to make some changes that will make quite a difference.

So the commencement date has already been mentioned, and while it might seem that we’ve got enough fuel overall—those numbers that I mentioned before—that’s a gross number; it’s not on the individual companies, and, of course, it will be individual companies that are required to keep that level of storage. So that is an issue for them to consider. But we’re pushing the commencement date out. We’ll give those companies enough time to get to the point where they can meet that minimum stockholding. It’ll be tight—that’s what they’ve told us—so we hope that that’s enough time.

There was also the point about the average of over a month, that assessing those stockholding levels at any moment in time, of course, could be below those levels and it would have been nonsensical to not take an average, so that’s been put in the legislation. Of course, the original level—if it was just taken as the legislation was written—would be quite unfair given the long lead times that these fuel orders come in on. Obviously they don’t just call up for a shipment to be delivered next week. There are quite long timelines; they come from Singapore mostly. So it’s at least a week—it might be two weeks actually—sailing from Singapore to get here. So those sort of lead times have to be taken into account.

There are, I think, the minimum penalties—there was a penalty in the proposed section 65, which was potentially $500,000 for individuals. We thought that was unfair for individuals, so that’s been lowered to $100,000. You know, these people are not going to go out and deliberately breach these rules, but if they do breach the rules, we didn’t think $500,000 was a fair level so we’ve brought that back to 100,000.

We also—how individual companies could move their fuel around in terms of their obligations; we discussed that at great length. There was quite a long discussion about the exclusive economic zone (EEZ) because shipments inside the EEZ are counted as stockholdings here in New Zealand and shipments are moving around. That’s one advantage, in fact, with Marsden Point closing: we no longer have a single point of failure in theory—we do for jet fuel, probably, because of the issue with the pipeline and all of our fuel going down to the airport that way. But now, the shipments are coming down through different ports; the ships are dropping off at different locations. So we’re getting more frequent shipments of fuel than we had before, albeit I don’t believe Marsden Point should have closed. I’m not for a moment supporting that at all.

But I think this bill is in good a shape as we could get it in the time that was allowed. I’d like to thank all of the submitters who helped this process go as smoothly as possible, and my fellow select committee members who—we had a very collegial go at this bill and I think we’ve knocked it into as good a shape as possible. Thank you.

Thank you, Madam Speaker. I just never thought that I would start a Government bill speech saying I congratulate the Opposition for seeing the light—their own journey on the road to Damascus and coming back and supporting this bill. It’s an absolute joy to have heard that today; just a pity we couldn’t have passed the select committee report in unanimous agreement, but I’m still extremely pleased. And I just want to start on that note and thank my select committee, the Economic Development, Science and Innovation Committee, and especially my deputy chairperson, Glen Bennett, for chairing most of the submissions. A lot of the timekeeping falls on Glen’s head as well with the submissions, because I had been actually with the tourism Minister in China at that time. So yeah, it’s been a really great process for us to come into conversations with lots of the industries, including the airlines, including different airports. I had been able to catch up with them at different occasions and they had all thoroughly enjoyed the process of the select committee submissions, but also some really important conversations about a critical infrastructure and critical supply to our fuel industry.

This is setting a floor to how much we need to reserve in our country. Can I just put on record that the Marsden Point refinery was closed down because of commercial reasons and it was by a private company, and if the Opposition is willing to commit to use taxpayers’ money to go fund a public oil refinery, I think that would set some sort of historical record as well. But it’s also great to be able to talk and agree on saying that our country definitely needs to have that reassurance, especially, as the last speaker, Stuart Smith, has just talked about, in cases of emergency such as in Christchurch, and talking about the diesel.

We have lifted the floor—well, we will be through this legislation—on all types of fuel, whether it’s petrol, jet fuel, or diesel. So saying that just because diesel is comparatively lower to the other types of fuel doesn’t actually mean that it’s not enough or doesn’t set the required standards for diesel; it’s just the comparative standard. So during Christchurch and the situation that happened, that was because there was no floor—it was lower than the standard we had already set at. So it’s always being able to look across the whole entire economy—all of our communities and needs—to set that floor for different types of fuels.

I just wanted to also touch on the fact that there has been discretion given—when we talk about situations of emergency—to the Minister to consider when people are not able to comply with their obligations, what types of concessions can the Minister give, and that is to be able to give flexibility to the situations that we’ve been in. But overall, like I said, once again, it is a balance across all different competing criterias we have to weigh up. Finally, I just wanted to say that as the world is changing, as different types of energy are changing, this is a bill that will protect the interests of New Zealand, putting the needs of New Zealand at the forefront. So that is why I commend this bill to the House.

Thank you very much, Madam Speaker. I rise to speak on the Fuel Industry (Improving Fuel Resilience) Amendment Bill. It’s one that National supports, although there are some concerns from the National Party at the speed with which this is progressing through Parliament. We note that the bill was introduced as recently as June and gave the Economic Development, Science and Innovation Committee just two months to report back, allowing stakeholders only two weeks to submit their views which is a very short time line considering that the Marsden Point oil refinery closed a bit over 15 months ago. So we do have some concerns that they didn’t provide adequate time for stakeholders and the public to share their views on what is a significant piece of legislation for New Zealand’s fuel market.

There’s a lot of discussion, obviously, around fossil fuels and alternative fuels, etc. but the reality is we still require fossil fuels, there is no alternative—for example, for jet fuels—at this point that’s financially realistic. And so we are going to need these and that’s why we have this bill here today recognising that these fuels are critical for New Zealand’s export economy, for our connection to the world, and for the ability for us to send things to the rest of the world and for other things that we need from the rest of the world that we can’t produce here to be sent to New Zealand, to keep our planes running, to keep our tractors running, etc. There is an energy transition happening, but there are sectors of the economy which just can’t operate without these fossil fuels.

So this bill will require minimum stockholding obligations calculated on the previous year’s consumption of litres per day. So it’s 28 days consumption of petrol on average, 24 days of consumption for jet fuel on average, and 21 days of consumption for diesel on average. It’s also recognising, I think, that fuel security is, like I said, really important for the economy and the wellbeing, actually, of New Zealand and New Zealanders. There is, unfortunately, some significant geopolitical instability in the globe at the moment that we’ve obviously seen with the war in Europe which would have been unthinkable only a few years ago. But we do need to have security of supply particularly for diesel—only 21 days of consumption of diesel. If we don’t have diesel we don’t have trucks moving around the country taking food around the country to supermarkets, we don’t have tractors out there tilling the soil and getting goods to market etc., etc.

So it is a relatively short time but it’s important that we have this disclosure and we have this understanding of the fuel stocks on hand in New Zealand. Just on the point of this being rushed, it is important that we have a good discussion and a good debate about these issues because they are quite challenging and they are very, very complex. I note, for example, that back in I think it was 2021, the Minister of Finance, I think it was, asked ACC to accelerate its moves to divest from investments in fossil fuels and, obviously, ACC held at that point around 10 percent of Refining NZ’s shares. There was some clarification sought from the Minister about his position in relation to ACC and other Crown-related funds investing in Refining NZ. I don’t believe the Minister wanted to get involved with that. Obviously now Marsden Point oil refinery has closed and we have lost those jobs and those opportunities in Northland, I just think it’s really important that, though we have this goal of carbon zero by 2050 and the steps towards that, that we make sure we do this in a sensible and careful way and that we don’t have unintended consequences along the way. For example, banning gas, when other countries are using gas as a transition fuel to move away from coal—

Glen Bennett: No one’s banning gas.

JOSEPH MOONEY: —and we’ve seen that in New Zealand. For example, we’ve actually been reporting a record amount of Indonesian coal in recent years as opposed to countries, say, Canada, which have been moving very heavily into using gas as a transition fuel, and a lot of investment being put into that and recognising that has a lower carbon component and a lesser impact on the climate than coal does.

So as a country we need to have ambitious goals but we also need to be very careful about how we progress towards them and that we don’t send ourselves backwards along the track and, unfortunately, I think we actually have done that in the last few years with using more coal. Because, fundamentally, we need to keep the lights on, we need to keep people warm, we need to keep our economy moving and so we do need to have some good discussion and debate around these issues. That’s why it is disappointing that more time wasn’t given for stakeholders to have more input into this bill so we can make sure we have all relevant information before Parliament as we take this important piece of legislation through the House. But with that, like I said, we do nevertheless support this bill, and do on that basis commend it to the House.

I’m really glad that the National Party is supporting this legislation, and, as has been spoken about already, there has been a good debate within our select committee, and I was happily able to chair part of it as the deputy chair. Often it’s around quality, not quantity, and so the 11 submissions and then eight oral submissions that were presented, in a timely fashion, were good, robust conversation. As has been mentioned by Minister Henare, there was some good debate and some good changes made during that process to ensure that this has come back to Parliament all the better, and for the future. That was around the commencement date, the calculation method which had been debated and many in the industry talked about that and the pecuniary penalties and the enforceable undertakings and exemptions.

It’s always nice when you have a piece of legislation when it’s really clear in the title of the bill, and the fact that it is improving fuel resilience, which is in the title; this is what this is about and it’s important. Last night I was at an event and met one of the executives from Air New Zealand, and the first question they asked me was: have we passed this bill yet? And they are really, really interested to ensure—and they submitted on it—to make sure we get this through. Because, obviously, for them it’s business, for them as a key stakeholder in New Zealand, as a key stakeholder in the regions like Taranaki. We need to ensure that resilience is there for our jet fuel, for our petrol, for our diesel, to make sure that we have resilience into the future, no matter what happens and what moves forward.

So it is really simple. I’m encouraged that across the floor we have support this morning for this, and it means that we can continue to move on and make sure that the Fuel Industry (Improving Fuel Resilience) Amendment Bill is able to take force, and I commend it to the House.

Thank you, Madam Speaker. This bill is attempting to solve a problem that is a genuine problem that needs to be addressed. That is the issue of resilience in New Zealand’s fuel supply and fuel infrastructure. Why is it a problem? Well, according to some, it’s because the Marsden Point oil refinery closed. Another reason given why New Zealand’s access to liquid fuels is at risk is because the Ukraine war disrupted supplies, primarily from the world’s biggest gas station, Russia. But, let’s be honest, the major disruptor to fuel resilience and to a supply of affordable energy in New Zealand has been this Labour Government with its terrible policies, banning oil and gas exploration and forcing regulations and costs onto businesses that are simply trying to make products that are affordable for consumers, that want to hire workers, expand their facilities, manufacture and export to the world, and deliver better economic and social outcomes for New Zealanders.

Well, it’s their resilience that is at risk from this Labour Government, and this bill doesn’t address that. In fact, it increases costs to consumers, increases the risk that some businesses might choose not to invest further in New Zealand because they’re unsure about the regulatory environment that they would experience here. And for that reason, ACT won’t support this bill, but we do have some suggestions as to how to improve fuel resilience.

So what does resilience mean? Well, if you live on the West Coast of the South Island, or if you live in Wellington and there’s a major earthquake—I’m talking “the big one”: the Alpine Fault letting go, or a magnitude 8 earthquake on the Wellington Fault or the Wairarapa Fault; the kinds of events that absolutely annihilate cities and destroy infrastructure in a way that can take decades to rebuild. Ask the people of Christchurch what that was like, and that was only a 7-point-something. The Alpine Fault’s going to deliver something between an 8 and a 10 magnitude earthquake.

What does resilience mean to communities affected by that? Well, what it would mean is that there is infrastructure that is built to be resilient: roads, ports, additional lifeline routes. Transmission Gully into Wellington is a great example: before that was built, Wellington only had State Highway 2 over the Remutakas or State Highway 1 through Kāpiti Coast. Resilience or fuel resilience can simply mean the tankers can get through, the trucks can get through. It doesn’t necessarily mean building a whole lot of storage tanks or forcing the private sector to build a whole lot of storage tanks to store a couple of extra days’ supply of diesel or petrol. That’s nonsensical, because if the roads are broken and the port is devastated from an earthquake, it doesn’t matter that you’ve got a tank of petrol or diesel somewhere else in the country. It won’t be able to get to the people who need it.

What about industrial action? Well, if there’s one thing this Labour Government has ensured with its fair pay agreements, we’re bound to get more industrial action unless we can turf this Government out in October. Isn’t that right, Mr Baillie? Isn’t that right? We’re bound to get more union blockades at ports. No doubt there’ll be climate-worried unionists wanting to blockade fuel terminals—

Simeon Brown: Or glue themselves to the water!

SIMON COURT: —or disrupt shipments, or, as Mr Simeon Brown said, maybe even glue themselves to the road in the path of fuel tankers.

ASSISTANT SPEAKER (Hon Jenny Salesa): Order! The member will come back to this bill instead of pontificating and saying what might happen.

SIMON COURT: I mean, to describe my offer as pontificating is to deify me in a way that no one else would, but thank you, Madam Speaker.

Industrial action is a risk of fuel resilience, and then, of course, fuel quality: shipments of fuel coming to New Zealand which don’t meet the quality standard. If you put dirty aviation fuel into a plane, that could cause a massive risk to passengers and freight. If you put dirty diesel into a truck, that could stop your truck on the side of the road, cause you the loss of a couple of days’ business.

The problem that most people face is when they go to fill up with gas, if they’re not paying close attention, instead of putting diesel in the ute, they put petrol or vice versa—that’s the typical quality issue New Zealanders have to face. But let’s be honest, even without Marsden Point oil refinery, there are a whole series of refineries on the East Coast of Australia, two to three days’ sail away, that can take off-spec product out of New Zealand, return it to the refinery it was supplied from in Australia, probably get them to redo the batch—at their own cost, if they’ve supplied us with faulty product—then we get it back and we’re good to go.

Well, that brings me to the issue at hand: fuel resilience, the minimum stockholding obligation. This bill will require fuel companies to build tankage, to build pipe networks, to build bunded containment facilities, to fence them off, to provide fire protection systems and groundwater monitoring systems for a very long time to come. Because you don’t just build a fuel storage tank, put 30, 50 thousand tonnes of fuel in it, and then say job done, walk away, we’ll just send the tankers every few days. That requires constant monitoring, constant oversight, groundwater testing, air emissions testing. The obligation is not for a bit more diesel in a tank, it’s for a whole lot of cost and red tape on industry out, potentially, decades into the future.

And then we come to the next problem. Apparently this Government believes there’s a climate emergency and that climate was a nuclear-free moment for a former Prime Minister, Jacinda Ardern, and her Labour Party. And yet here we have a Labour Government bill insisting on building more fuel storage around New Zealand. Apparently we’re still going to need petrol and diesel into the future—who knew?

Well, belatedly, Minister Megan Woods introduced this bill, gave the select committee two weeks to hear submissions on a matter that anyone in the industry, anyone in the transport industry depending on fuel, could have said we will always be reliant on liquid fuels until there is something cost effective to replace them. So, two different policy directions: save us from climate change by getting rid of fossil fuels; oh, by the way, could you please build more fuel storage for fossil fuels because we’re going to need them a lot longer.

Completely incoherent policy approach, and that is why New Zealand, after six years, is begging for a change of Government, having practical people with policy solutions that actually make it more affordable to live and work in New Zealand, to set up and do business in New Zealand. That’s what people are asking for. That’s what ACT MPs are hearing when we go around the country. And they’re also asking for some certainty and security about their energy supplies.

So what would ACT do? Well, we listen to the industry: the people who import fuel, the people who store fuel, the people who supply fuel—not just to the retail service stations where I might take my Subaru and fill up with the highest octane I can get on any given day, but the people who supply fuel to all the trucking companies, to the telecommunications companies that depend on having diesel for generators to keep the telco networks up and running in the event of a loss of electricity or a loss of service.

And what they told us was this: “Simon, there are a whole lot of refineries on the east coast of Australia, a few days’ sail away. There are ships constantly crossing the Tasman, loaded up with aviation fuel, with diesel and petrol. We rely on Australia. They are our only formal ally as nation states. New Zealand and Australia have a closer economic relations agreement. If we can’t rely on Australian suppliers to supply us with petrol and diesel, who could we rely on? And if there needs to be a minimum stockholding obligation, well, could you please let us count the ships that are actually in the Tasman heading here? Because unless something goes terribly wrong, they’re not likely to get lost travelling between the east coast of Australia and New Zealand. We’d like to be able to count that fuel on the seas is part of the obligation. We think that’s practical. We won’t need to build any tankage.”

The ACT Party would concur with that. It comes at no cost to the taxpayer, no cost to the consumer; no extra infrastructure needs to be built; no extra bureaucracy and monitoring and regulatory compliance for new equipment; no risk of stranded assets and stranded capital—another issue that suppliers of fuel are worried about. It’s a very simple and elegant solution. It doesn’t even require this Government to pass a law. That’s what ACT would accept. That’s what New Zealanders need: no or low-cost fuel security delivered by the private sector, market-based solutions. That’s what ACT stands for and we look forward to delivering all of that.

Tēnā koe, Madam Speaker. Tēnā koe e te Whare. The Green Party is supporting this bill, the Fuel Industry (Improving Fuel Resilience) Amendment Bill. It is prudent to have measures in place to ensure that we have that resilience, given the dependence of our transport system and economy on petrol and diesel for the time being. Of course, the singlebiggest action we could take to improve resilience—and the single-biggest threat that we are facing is dangerous climate change from greenhouse gas emissions. And people who don’t acknowledge that—you have to wonder what they’re paying attention to, because we’ve had the highest temperatures in recorded history, in over 10,000 years, in the last summer in the Northern Hemisphere. We’ve had horrific, severe rainfall events and cyclones hitting New Zealand already. The longer we take to stop fossil-fuel use, stop adding to that dangerous greenhouse pollution to the atmosphere, the worse it’s going to be. And there’s no adaptation after a certain point. So, while there are a bunch of vested interests who seem to want to make a few more dollars in the interim, before the Earth becomes uninhabitable, we have to stop listening to them and organise to support life on Earth and the future for our kids and their grandkids.

And we can do that, because shifting to electrification of transport and our entire economy is nothing but upside for New Zealand. It’s cleaner air. It’s more resilience. It’s cheaper cost to move people and goods. You know, we’ve got abundant sun and wind energy that could be fuelling everything we do, and it’s just all upside: creates jobs, better health. It’s kind of astonishing to me that everyone in New Zealand isn’t in agreement about the need to rapidly electrify as quickly as possible—other than people have been very confused by the amount of money that was put into lobbying by the fossil fuel industry to delay this sort of action, because they make more money from the status quo while the planet gets trashed and people’s lives are worse. So, yeah, we support this bill—it’s fine—but let’s see some real action on the real, imminent, clear and present danger and seize the opportunity of electrification and energy efficiency here in Aotearoa. That will give us energy independence, make our people healthier and happier, and reduce costs. The most effective thing we could do to reduce inflation is to shift away from petrol and diesel and shift to clean, renewable electricity generated right here in our country. People need to vote Green, I guess, if they want that.

I’m very pleased to stand and commend the Fuel Industry (Improving Fuel Resilience) Amendment Bill on this reading in the House. I also did enjoy the clarity of thought and intent in the ACT Party’s presentation on this bill and the commendable level of honesty—that, effectively, their policy in this important strategic area is to freeload off Australia.

Now, there are two points of interest that the House might like to be aware of here. Firstly, Australia has a minimum stockholding obligation and, in fact, that minimum stockholding obligation is shortly to increase—24 days is going to 27 days for petrol, going from 20 to 32 days for diesel, and going from 24 days to 27 days for jet fuel in 2024.

The member who spoke for the ACT Party also displays an astonishing degree of naivety. His argument appeared to be that if New Zealand ever gets in shtook because of global supply chain factors restricting our access to critical fuel, which is important for our economy, for our society, for jobs and all of the rest of it, the Australians will just step in and help out. These are the blokes who bowled an underarm to the New Zealand cricket team, whose NRL refs every week try and do over the Warriors, to little effect at the moment. And in the event of global supply chain shocks, the Australian Government and the Australian people quite rightly will focus on making sure that they have security of supply in their own country.

It is incumbent on this Government and this House to make sure that we look after New Zealand by having prudent measures in place. That is what this bill does. This is a very standard and orthodox approach to making sure that we have sufficient stockholdings in place. Most developed countries have it around the world. COVID-19 and the supply-chain shocks that occurred during that period really did relay and bring home the importance of prudence in this area.

Supply chains are under stress in what is a challenging international and global environment. There are many things that could create those stresses again, and it is critical that we have these sorts of economic cushions in place to make sure that our supply chains do keep supplied with fuel. Most of the House recognises this, and the ACT member’s speech was a good reminder of the dangers of having an extremist and highly ideological ACT party anywhere near the Treasury benches. I commend this bill to the House.

Thank you, Mr Speaker. It’s a pleasure to rise and—

DEPUTY SPEAKER: A five-minute call—I’m sorry.

MELISSA LEE: Ha, ha! I knew that. It’s a pleasure to rise and participate in the debate on the Fuel Industry (Improving Fuel Resilience) Amendment Bill. I think having resilience in our fuel industry is actually really important, considering the fact that—first of all, I’ll say that the National Party supports this bill. I know that some members opposite have raised issues as to why we did not actually support the report back from the select committee. I’ll answer that.

We have a serious concern in terms of process as to how quickly the bill—after having actually been introduced in June, the select committee only literally had two months to report this back. And that means the stakeholders literally only had two weeks to actually get their act together, make submissions for this to happen. I know that Glen Bennett, who chaired most of it, mentioned that he wanted quality not quantity. I think that’s precisely the problem that we actually see. Rushed quality is not always good quality, Mr Bennett, and I think that was the concern. But having said that, I have to say Naisi Chen’s timekeeping must have rubbed off on you as you were very diligent in your timekeeping and actually kept us in check.

I think one of the issues that Stuart Smith, my colleague, elaborated on for the select committee process was that because it was rushed and we didn’t have a lot of time and we knew that there were things that we couldn’t really sort of delve into and have a deeper conversation and have had more submissions from the sector—but I think where this bill has actually come to, providing resilience, to actually have onshore stockholding for fuel for all petrol, jet fuel, and diesel and having a minimum average stockholding, is a good one. And the reason is that, for example, in the jet fuel industry with Marsden Point closing, we actually have had a bad shipment of jet fuel that arrived in the country in a space of a year. That actually meant that they had to ration fuel, which meant there were disruptions in our flights.

That is rather a difficult situation for us to be in, considering the fact that New Zealand does in fact not only have domestic planes, but we also have international visitors who couldn’t rely on the jet fuel to be the right quality. Earlier, I think, one of the speakers mentioned about having to fly with a heavier load of fuel on the plane, which is actually an extra cost for them and actually having to land in a midpoint to refuel, which is also extra added cost to the industry and the airline industry.

The Green member talked about the environmental concerns. I think we are all aware of that. While we are starting to rely more on electric vehicles and decarbonising away from fossil fuels, we still have industries where they do rely on fossil fuels. And we need to actually keep the New Zealand economy moving, making sure that things—our food and stock—are in fact delivered to the destination. They do rely on fossil fuel, and having a resilient stockholding would actually mean that they can actually go about their business, not worrying about having a contingency plan should there be a bad stock of fuel that is arriving, like we actually had with the jet fuel industry.

Some of the recommendations from the select committee which the Minister earlier talked about—one of the things that I’m particularly proud of is the penalties in relation to individuals, because often some of the actions that they were actually wanting to penalise may not necessarily have been their own in terms of wanting to be a bad actor. Sometimes it’s the exceptional circumstances that they are in that actually put them in a situation where they may not be meeting the required obligations. I think that is actually a good move, and delaying the start date when this bill comes into action—instead of April 2024, we actually start in January 2025—is something that I really support.

And on that note, Mr Speaker, I’ve run out of my time and I commend this bill to the House.

Thank you, Mr Speaker. It’s my privilege to speak on the Fuel Industry (Improving Fuel Resilience) Amendment Bill, and acknowledging the contributions of the House this morning. This bill, the fuel industry amendment bill, boosts New Zealand’s fuel supply, resilience, and economic security by ensuring there is sufficient fuel supply to weather any major disruptions.

There were 11 submissions that were made on this particular bill—eight additional submissions that were made orally—and just acknowledging, I guess, the discussion in the House this morning that some members did feel that there was a bit of pressure, and also acknowledgment of the chair, Naisi Chen, in her well-managed facilitation and timekeeping of those submissions throughout the process, albeit it was condensed, and well managed quickly.

This is an important bill that we do want to proceed with, and, of course, there is acknowledgment that there are a number of proposed changes to this bill that have been recommended by the Economic Development, Science and Innovation Committee, one of which is to amend the proposed clause 2(1) to bring the information disclosure and minimum fuel stockholding obligation (MSO) provisions into force on specific dates. The information disclosure provisions would come into force on 1 July 2024 and MSO provisions on 1 January 2025.

There are a number of proposed changes, albeit the well-managed time facilitation, “getting things done” approach of this Government, and I commend the bill to the House.

Not only has there been the experience in New Zealand of the aviation fuel mini-crisis, if you like, that has been alluded to this morning, but recently I was at an event I hosted where the EU spoke about lessons learned from the war in Ukraine, and a really, really big factor in that was about access to fuel, the absolute importance to be able to have access to keep the economy running.

I sat on the Economic Development, Science and Innovation Committee at the time when submissions were being made, and there was a question about whether fuel could be held in ships that kind of went around the coast of New Zealand. We heard very clearly that the nature of fuel is such that even if it tests OK out on those ships, by the time it gets to shore it can be contaminated, with catastrophic consequences, so that wasn’t an option.

Simon Court mentioned the fact that ports and roads and other elements also play a part in fuel resilience, and while that is true, if there is no fuel to start with then that point becomes moot, so I’m not sure where his argument was going. He also said that he listens to the industry. Well, that’s great, but on this side of the House we listen to New Zealanders, and one thing that’s really clear to us is New Zealanders value our self-determination. The last thing we want to do, as the Hon Michael Wood said, is be totally dependent on Australia, and naively so, being at the mercy of what the free market ideology that Simon Court is proposing might throw up, whether it is outrageous fuel prices or, if that was not possible in a regulated market, some kind of beholdenness to Australia—absolutely outrageous. I hope there are no Australian media watching who are going to suggest that we would try and pull this on them.

This is a rational and pragmatic bill. There’s also a sense of urgency to it, because COVID has taught us that we do need to be prepared, and that’s why we need to get this done. I commend the bill to the House.

Thank you, Mr. Speaker, for the opportunity to take a call on the Fuel Industry (Improving Fuel Resilience) Amendment Bill. As has been mentioned, the National Party of course supports this bill, which will help to secure our resilience for fuel stocks in the case of global events which risk the fuel supply in New Zealand. I have been really enjoying listening to members on the other side of the House talking about how important fuel is to our economy and how important it is that we can fuel our cars and our trucks and our planes so that we can keep the engine room of our economy moving. What we often hear from the other side of this House is that we need to stop driving, stop flying, and stop using trucks.

Of course, the irony of it is that this is a Government which, when they first came to office, banned oil and gas exploration here in New Zealand. How things have changed and the Government has changed its approach, and here we are now finally talking about how we can actually secure resilience in the supply of oil and gas and petrol, diesel, and jet fuel here in New Zealand, which is, of course, critically important to our country. So, whilst we have raised concerns about the rushed process that this Government has put to this piece of legislation—there are, of course, regulatory impacts which should have been given more time and consideration by the Economic Development, Science and Innovation Committee, allowing for the industry who are impacted to be able to work that through—we do, of course, commend this bill to the House. Thank you very much.

Thank you, Mr Speaker. Just a few comments to make on this piece of legislation as it passes through the House today. Primarily, it is about Governments doing what all Governments do, and that is put backstops in where they are needed. This is about ensuring resiliency in an area where everyone in this country is impacted if we are unable to ensure not only supply of fuel but appropriate quality of fuel—it does have huge impacts for our industry, for mums and dads around the country. So this is about doing what Governments should do, which is building resiliency into the system.

Obviously, as there’s broad support across the House, no one is disputing that. Also, no one is disputing that we are in uncertain times, and unless we are able to do what we need to do to provide resiliency in this part of our economy and in this part of the sector in our industry, we would throw ourselves, as a nation, into huge disruption if there were disruptions to fuel and to the quality of fuel. So, in that vein, and not wanting to hold the passage of this bill up any further, I commend the bill to the House.