Energy (Fuels, Levies, and References) Amendment Bill

I move, That the Energy (Fuels, Levies, and References) Amendment Bill be now read a second time.

I think it’s probably worth just taking 30 seconds to remind members opposite exactly what it is that this piece of legislation does. It’s part of a wider piece of fuel resilience policy work that this Government has been undertaking for a long period of time now. Once the decision was made, the commercial decision was made for Marsden Point to shut down, a package of policies was put together. Consultation on that work went out in early 2022. In November of last year, the Government made announcements around what that work would look like. It’s going to introduce minimum onshore fuel stockholding obligations, but it’s also going to have Government procurement of storage and management of at least 70 million litres of reserve diesel stock to be held onshore.

What this legislation does today is it ensures that the Petroleum or Engine Fuel Monitoring Levy—the levy that we’re talking about here that is already collected—can be used to recover the cost of promoting onshore fuel resilience initiatives, in addition to the very narrow existing purposes that define what the levy can be used for. What we have is that the levy basically says that you have to use it only to cover the lowest cost options. The lowest cost options are always going to be buying oil tickets to be held internationally. This is the right thing for us to do in terms of our international obligations around fuel security and what we do as a member of the International Energy Agency.

But what we are concentrating on today is domestic fuel security, and it would not be useful for us to be holding those tickets internationally and that diesel not to be onshore for the use of New Zealanders, as part of the suite of policy around fuel resilience. So it is saying that that levy can then be used for that purpose. So it is a very narrow piece of legislation. The only part of the fuel resilience policy that it is addressing is the use of the levy and what we can use the levy for, and this will enable the levy to be used for the roll-out of the policy package which aims to strengthen our fuel resilience and our economic security.

The levy will be needed for covering the Government administration costs associated with the minimum stockholding obligation, which is expected to come into effect in the coming months. The levy will also be needed for entering into agreements for operationalising the reserve diesel stock arrangement, and I intend to have these arrangements finalised by the end of 2023, so we need funding certainty for the arrangements as soon as possible.

The other measures that I’ve talked about, the other parts of the suite of policies around fuel resilience that I’m sure the Opposition members who are thinking that this is covering all of it—I’m sure they read the consultation documents and understand the different components of the resilience policy as it stands, but this is a very narrow piece of that work. I commend this bill to the House.

I think you have to say, “The question is …”. She’s moved the second reading.

ASSISTANT SPEAKER (Hon Jacqui Dean): Sorry, I was distracted. Is the member calling for a point of order?

No. I am seeking a call.

ASSISTANT SPEAKER (Hon Jacqui Dean): You are taking a call?

Yes.

ASSISTANT SPEAKER (Hon Jacqui Dean): Stuart Smith.

I think you need to say, “The question is that the”—

ASSISTANT SPEAKER (Hon Jacqui Dean): Oh, thank you. Thank you for that. Yes, I should have. The question is that the motion be agreed to. Stuart Smith.

Thank you very much, Madam Speaker. It is a narrow bill—I understand that—but as has been pointed out several times in this debate, both last night and this morning, the closure of Marsden Point oil refinery in New Zealand has made New Zealand’s fuel supply more tenuous than it might otherwise be.

While that closed in April last year, the invasion of Russia into Ukraine and the sanctions that followed—in fact, we passed a bill in this House on 9 March 2022, the Russia Sanctions Act, as it is now, to ensure that we do not support the Russian regime economically in any way. However, I am sure you will be interested to know of what’s happened in the fuel industry international markets. The Americans have sanctions and are not allowed to import Russian oil or Russian diesel, and they used to import quite a bit of diesel from there.

Actually, what’s happening now is Saudi Arabia is importing Russian refined diesel. Saudi Arabia already has plenty of diesel and, as you know, they produce a lot of oil. But they are importing Russian diesel and exporting their own diesel to the US, thereby getting around the Russian sanctions. Some refineries in India are buying Russian crude and refining it into diesel—or most of it into diesel—and sending that to Russia, thereby getting around the sanctions.

The question for us is, now that we only import diesel—we don’t actually make any diesel in New Zealand. If you’re importing crude, as Marsden Point did, there’s no doubt where the crude comes from. Importing refined fuels, what was the source of the crude that went in to make that? Are we importing Russian diesel into New Zealand? I don’t know. I can guarantee the Minister doesn’t know. But the way the international market works, we could actually be supporting the Russian economy indirectly by importing Russian diesel refined from Russian crude. We don’t know. Unless there’s a lot of work done behind there—and I guarantee almost certainly we’ll find out in the next stage that that hasn’t been thought of.

So we do support this bill, but we don’t understand the need for the urgency that it has. None the less, we do support it. But with those comments, I commend it to the House.

Thank you, Madam Speaker. I rise to take a short call on the Energy (Fuels, Levies, and References) Amendment Bill. This bill is part of a wider fuel resilience policy package announced by Government in November 2022 which includes introducing a minimum onshore fuel stock-holding obligation and dedicating additional resources for operating the national fuel plan.

As the MP for Tukituki, Anna Lorck, rightly pointed out, we are living in a very volatile environment internationally and locally. We have seen what Cyclone Gabrielle has done to our infrastructure. In events like that, having a resilience to be flexible with so we can operate our emergency services is important. It actually does save lives. So this bill is going to help with that. It’s all about fuel resilience, it’s all about flexibility. It’s a good bill, I commend it to the House.

Kia ora tātou. I acknowledge “Salmon Shirt Day” today—or some people call it Pink Shirt Day—and what it represents: anti-bullying. The different types of pink I’ve seen today—blush, rose, fuchsia, rosewood, taffy, bubbly, magenta, and, my personal favourite, watermelon—give us great hope for bullying and harassment to stop.

Indeed, the party sitting on this right side of the House are not as righteous as the Government, and feel harassed and bullied into this position. The need for fuel security—nothing new. There are plenty of farms and industrial businesses throughout the country that have those little tanks on their properties—hard-working people who use fuel for farming and other purposes didn’t get much support; there wasn’t much support for them, yesterday, actually. It reminds me of that famous Ruakāka moment about six years ago when someone hit the jet fuel line and temporarily cut it—that was a shocker.

The bill gives me the first of many—like my colleague Williams—opportunities to speak briefly today and tautoko my esteemed colleague Gerry, gone but not forgotten from this moment, and other National kaumātua: Collins, Stuart Smith, Brownlee, Bayly, not Harete, she’s rangatahi—kei te rangatahi tonu—along with my by-election buddy Uffindell.

But maintaining fuel continuity and supply is fundamental for the country to function, and that’s why we’re supporting this bill. Domestic fuel security—that’s critical for the country’s productivity. The closure of Marsden Point, facilitated by this Government, was unnecessary. Having the levy recoverable by the Crown for promoting resilience in the security of supply, though, that’s important—that’s absolutely given a lot of tautoko—and to improve monitoring and collecting information on resilience. It’s sort of like energy security: you can’t keep getting rid of all the options indefinitely. Who knows? We might have to go back to Commodore 64s and Ataris sometime too, instead of the HPs we currently use.

The urgency accorded to this bill has been unhealthy, and, some would say, undemocratic.

💬 Simon Court: I reckon the VK Commodore was the best one.

That’s right—and Linux. Today, it’s energy security—urgency on energy security—tomorrow it could be urgency on the voting age, and Sunday it might be constitutional arrangements. Select committee processes allow those affected, the industrial players in this space, to be engaged, to have their chance, to have their time in the sun, and to give their views. But policy process based on a few coffee conversations at Bellamy’s raises unnecessary risks.

Somewhere out there is a world where we don’t use diesel, we don’t use coal, and we don’t use petroleum. That world, which some members of the Green Party want us to live in, was also known as Gondwanaland, and it’s long gone. This is 2023 and it’s time to pull up our pink stockings and sharpen our pink collars. If anyone is this House thinks that we’re going to survive and thrive in the changing climatic conditions only by using electric vehicles and tools, they continue to live in a fable written by the Brothers Grimm—it might be Rumpelstiltskin or Little Red Riding Hood, or one of the many Studio Ghibli Japanese animation movies like Nausicaä of the Valley of the Wind, where our communities live in a beautiful but very difficult situation.

We are 100 percent dependent on other nations for our motor fuel, but we’re subject to the sort of global bullying and harassment at a global level, that, at a personal level, today, on “Salmon Shirt Day”, we stand against. I echo my learned gentleman colleague Gerry Brownlee’s concerns: we support the bill but believe the ridiculous situation has been caused by unreasonable Government decision-making that harassed the long-term good of this fine country. Kia ora.

Tēnā koe, Madam Speaker. Whai korōria, hareruia ki a Ihowa o ngā mano. Ko te Matua, Tama, Wairua Tapu, ngā Anahera Pono me te Māngai, āianei, āke nei, āe. Haere atu rā e ngā anahera tapu ki te torōna o Ihowa o ngā mano, haere, haere, moe mai rā. Nui te aroha ki a koutou, te whānau pani.

[Glory and halleluiah to Jehovah of the masses. Father, Son, Holy Spirit, the True Angels and the Prophet, now and for ever, yes. Rest in peace the sacred angels at the throne of Jehovah of the masses, go on, go on, rest in peace. Much love to you all, the family that is bereft.]

It’s appropriate for me to stand and to acknowledge the pōuritanga in our rohe—the sadness in our rohe—at this time, as I stand to speak for the first time today.

I am pleased to take a call on the Energy (Fuels, Levies, and References) Amendment Bill. Clearly there needs to be change in terms of this legislation for the purposes of being able to utilise that levy to the best of our advantage.

This is about continuity and economic security of supply. It’s about building that resilience. It’s about everything that everyone has already spoken about before me. Managing the transition to a future of self-determination for Aotearoa is very, very important. We can uphold, as a country, our own mana motuhake.

I want to thank the Opposition for seeing the sense and the value in this bill and supporting it. I commend this bill to the House. Kia ora.

The ACT Party will be supporting this bill, but I just want to cover off a few things that are really important that introducing this bill under urgency has raised that the ACT Party wants to get on the record. It’s true that New Zealand, at the end of a global supply chain, has problems with security of supply of everything, and fuel is just one of those things. Before the Marsden Point oil refinery closed, we were not sourcing all of our fuel from onshore production. In fact, a large amount of it was imported from refineries in Singapore and Brisbane, for example, supplied by a company called Ampol, which supplied fuel to the Gull chain and Waitomo and others. So New Zealand has always had a component of imported refined fuel as well as, until Marsden Point closed, a refinery to refine crude oil.

Now, when we think about New Zealand having to deal with this issue of security of supply, how do we become more resilient and what does resilience mean? I asked an official from the Ministry for the Environment yesterday what was their definition of “resilience” in relation to a bill going through that select committee, the Natural and Built Environment Bill. They couldn’t tell me; they said they’d get back to me. Well, I want to offer the Government a vision of what ACT thinks resilience means for New Zealand when it comes to fuel security and the strength of our economy in our communities. Because this bill is intending to raise a levy, which the Minister said that by the end of the year she will know how it’s to be spent on buying essentially 70 million litres of diesel and storing it somewhere in New Zealand.

Well, I’ve spoken to the fuel companies and I’ve spoken to major users of diesel, and they’ve said that it’s no good just adding a few more tanks to the Channel Infrastructure tank farm at Marsden Point, and it’s no good just standing up a few more tanks at the Wiri tank farm in Auckland, or at Petone. We actually need to think about where diesel fuel, which is the mainstay, the backbone of our economy, of industrial production, of our road freight and transport—actually, diesel was used to power generators to keep the cellphone network running in Hawke’s Bay recently after the electricity was disconnected. Diesel is still the lifeblood of our economy. So I’ve asked stakeholders, what does resilience mean, where should the storage go? And they’ve said, “Everywhere”. Because if you think about the kind of natural hazards that New Zealand’s subject to—the alpine fault in the South Island letting go, potentially releasing devastating earthquakes of magnitude eight or nine. There’s a 75 percent probability of that earthquake occurring in the next 50 years. As an engineer, I think I would bank on that happening. I wouldn’t be banking on it 25 percent not happening. I’d be thinking that alpine fault is a clear and present risk to the resilience—in fact, to the survival—of many of our communities, particularly on the West Coast of the South Island and other places which are dependent on road transport over very vulnerable routes in order to maintain their lifelines.

So the ACT Party will be asking the Minister, when we get to committee stage, “Where is the storage, what does resilience mean, and what are the plans for the future?” Because 70 million litres sounds like a lot, but New Zealand used over 3,200 million litres, which is about, what are we thinking? Quite a lot more than—forgive me, it’s early; I need a calculator. But 70 million litres, or 70,000 tonnes, compared to 3.2 million tonnes is not a lot. It’s a drop in the bucket. It’s a few days’ supply of what New Zealand uses on an annual basis. So we’ll have a few questions for the Minister when we get to committee stage: what does resilience mean, where will this fuel be stored so it’s actually of benefit, and is the Government about to get into supplying diesel itself like they promised they would get into supplying bitumen themselves through Waka Kotahi because they weren’t able to procure it at a decent rate. So ACT will support this bill because we believe it’s important to have a secure fuel supply for communities around New Zealand, but we have questions for the Minister, particularly around why urgency, why now—when this problem has been known about for a couple of years—and what does resiliency mean? Thank you.

Just a short call on the second reading. I did want to make one point around why it’s so important to have a transport system and our land-use development undertaken in a way that reduces a reliance on fossil fuels, and this is a point that goes back to 2008, when we were worried about security of supply and high oil prices. Ultimately, it’s decisions that Government and local government make about land-use planning and about investment in transport infrastructure that has an impact on how people and goods can move around the country. Obviously, in the 20th century, we had a big push for roads and motor vehicles.

One of the costs that is not considered for New Zealand is just how much the private cost of cars, trucks, and fuel is. So Government might be putting $5 billion, maybe a little bit more, into the transport network each year, in terms of building infrastructure, maintaining it, watching the enforcement of rules, etc., but New Zealanders, on the private side, have to spend many times more than that to use the roading network. There was a recent report—I don’t know if it’s been published yet, but we saw a presentation of it in select committee—talking about the cost of our transport system to GDP, and once you tally up all the costs, it’s something like $60 billion a year. I mean, that is huge. That is nearly 20 percent. So anything that we do to reduce people’s reliance on vehicles, because we’re providing more passenger services or because we’re investing in freight network and services that means that things don’t have to move on the road, reduces that cost for vehicles and fuel. It also improves our resilience, because then, if there are spikes in the oil price, if there’s a disruption to supply, it doesn’t matter because we have alternatives. So that’s the kind of preparedness that the Green Party has been talking about for 20 years. It’s something we still need to do. We have seen other countries move quite quickly—that have certain things in common with us—to switch to electrification of their fleet.

But it’s not just electrification of the vehicles that are currently moving in the way they are; it’s also improvements in energy efficiency, relying less on really heavy vehicles to move goods. There’s all sorts of opportunities and logistics and whatnot, but it’s not something that’s going to happen without coordinated Government leadership at both central and local government level. And I guess that’s, you know, the point that we’re making—that we need Government to set the direction and to put in place the supportive initiatives, investment, and support so that everyone in New Zealand, no matter what they’re doing, can take the steps they need to to futureproof our society to climate change and to increase severe weather events. But also reducing carbon emissions is really important because, at a certain point, we won’t be able to adapt if we don’t reduce emissions. Adaptation is no longer possible.

The benefit of that is it also has these energy efficiency benefits. It’s more resilient to potential disruption in crude oil globally, and because we’re having to import all of this, anyway, it’s sort of like a direct cost to our economy. So the less oil we have to import to move people and goods around the country, the better off we are. But we need coordinated Government investment in infrastructure to get us to the point where we aren’t so reliant on that.

Thank you, Madam Speaker. I’m going to take a relatively short call in this debate, but there are a couple of things that I would just like to highlight. We’ve got broad support for this particular bill, which is really important, but there have been some themes that have been promoted during the course of this debate and the first reading, and some of those are around—we are in uncertain times. There’s the war in Ukraine, and there is a requirement upon us to view these uncertain times in terms of the planning and forward-thinking that we need to do right now. There have been massive disruptions to supply chains over the last few years, and how do we ensure that we have built resiliency into our system, not just around fuel but around a whole lot of issues, and the issue that the Green Party so articulately described to us, in that we are a country in transition and exploring options for other ways to use energy to support our transport infrastructure, to support how we move ourselves around in the everyday things that we need to do and how we build resiliency into that.

Also, just to quote members from the Opposition, they say we are taking practical steps to build our resiliency. Now, whilst this is all very good in the broader context of the energy proposals as have been promoted by this Government, speaking specifically to this bill, this is about ensuring that the levy that is quoted in section 14(2) of the Energy (Fuels, Levies, and References) Act of 1989 can be used specifically to build resiliency of our fuel stock to ensure that we have 90 days’ supply, because there is no doubt that we are living in uncertain times and we need to ensure that we have backup and backstops in case that occurs.

The Opposition have indicated they will be speaking to certain aspects in the committee stage, and I support that discussion. One point I do want to illuminate and highlight which will be of useful discussion for us to have in the committee of the whole House is about the source of supply. I think that’s been raised by members of the Opposition, and I am looking forward to the Minister of Energy and Resources participating in that broader debate. On that note, I don’t want to hold up the debate any longer. I commend this bill to the House.

The question is that the motion be agreed to. All those of that opinion will say Aye; to the contrary, No. The Ayes have it.

Ricardo Menéndez March: Party vote called for—for the proxy votes.

ASSISTANT SPEAKER (Hon Jacqui Dean): I had already ruled, but let me just double check.

Motion agreed to.

Bill read a second time.

This bill is set down for committee stage immediately. I declare the House in committee for consideration of the Energy (Fuels, Levies, and References) Amendment Bill.

In Committee

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