Aerial view of a large red cargo ship moving through deep blue ocean water, creating a white wake. An orange vertical banner on the right reads "THE BULLETIN" with a white arrow above the text.
With the US now threatening to block the few oil tankers currently making it through the Strait of Hormuz, the cost of NZ’s fuel dependence is impossible to ignore. (Photo: Getty Images)

The BulletinToday at 7.15am

One more chance for New Zealand to kick its oil habit

Contributing writer
Aerial view of a large red cargo ship moving through deep blue ocean water, creating a white wake. An orange vertical banner on the right reads "THE BULLETIN" with a white arrow above the text.
With the US now threatening to block the few oil tankers currently making it through the Strait of Hormuz, the cost of NZ’s fuel dependence is impossible to ignore. (Photo: Getty Images)
newsletter

Could reframing energy independence as a national security issue, rather than a climate one, be our best chance to go electric, asks Catherine McGregor in today’s excerpt from The Bulletin.

To receive The Bulletin in full each weekday, sign up here.

A very long pipeline

The first thing to know about New Zealand’s fuel supply is how far it has to travel; the second is how many things could go wrong on the way. Joel MacManus, writing in The Spinoff, has traced New Zealand’s petrol supply chain from the oil fields of the Persian Gulf – where around 65% of the crude processed by Asian refineries originates – through refineries in Singapore or South Korea, across the Pacific in tankers holding up to 120 million litres, and down a 170km pipeline to South Auckland. Almost all of it passes through the Strait of Hormuz. New Zealand currently has 55 days of petrol left, 44 days of diesel and 46 days of jet fuel, according to NZ Oil Watch.

With spending at service stations up 33% since the war began and Donald Trump ordering a blockade​ of the few oil tankers currently making it through the strait, the cost of NZ’s fuel dependence is impossible to ignore. Ed Harvey, writing in a paywalled NZ Herald column, puts the structural problem plainly: New Zealand spends between $7 billion and $8 billion a year on imported fuel, and “every dollar of it is exposed to whatever happens to be going wrong on the other side of the world. That’s not an energy policy. That’s a dependency.”

A succession of own goals

The crisis might have landed less hard if the country had spent recent years reducing its exposure. It did not. The Spinoff’s Hayden Donnell recently catalogued, in highly sardonic form, all the government’s fossil fuel-friendly decisions of this term, from the axing of the Clean Car Discount to committing $56 billion to build 17 new motorways. One more questionable decision that didn’t make it into Donnell’s piece: the planned LNG terminal in Taranaki, marketed as an energy security backstop but now thrown into doubt after global LNG prices surged 50% within days of the conflict escalating.

A few steps towards a more electric future

With the crisis concentrating minds, electrification is getting a (small) second wind. As Greater Auckland wrote in October, KiwiRail is actively considering a plan to electrify the “golden triangle” rail corridor between Auckland, Hamilton and Tauranga. Shane Jones has promised a $15 million loan for a solar farm on Stewart Island, which currently runs entirely on diesel generators. And, as we discussed in the Bulletin last week, the government has committed $60 million to co-fund 2,500 new EV chargers.

That’s clearly not going to be enough. In Newsroom, Auckland University’s Kevin E Trenberth suggests a number of government interventions that would encourage uptake of domestic solar power, including net metering (requiring power companies to pay solar-enabled households the same price for surplus electricity exported to the grid as they are charged for electricity) and legalising DIY-installable solar panels – known as “balcony solar” – that are already popular in Germany.

The crisitunity

Writing in a paywalled NZ Herald column, Liam Dann reaches for a Homer Simpson neologism – crisitunity, a crisis/opportunity – to discuss the war’s impact on New Zealand. His case is that framing energy independence as a national security issue, rather than a climate one, could create a political consensus that the green arguments never achieved: “I’m all for embracing renewable energy to mitigate climate change,” he writes. “But… there is no point implementing rules that polarise the public, generate a backlash and then get reversed with every government change.”

Writing in BusinessDesk (paywalled), Pattrick Smellie goes further, noting that a report estimates that a decarbonisation strategy could add $22 billion to the NZ economy every year by 2035. Now, public momentum for such a strategy is greater than it has been in years. His provisionally titled “Smellie Plan” would, among other aims, “create a new low-carbon, energy-backed industrial base, “rid the country to the greatest possible extent of exposure to fossil fuels” and “give young New Zealanders a reason to believe this is as good a place as any city in Australia, America or Europe to be right now to make a life and career.”