The latest American military excursion into the middle east, ill designed as it has been, has resulted in yet another bout of panic over the supply of petrol products around the world and we unfortunately are not immune from this.
The media is drawing parallels with the oil shocks of the 1970s and reporting on the possibility of car less days and petrol rationing. Are we really going to have to leave our cars in the garage for the day; to have to accept a ration of petrol? We are not meant to be even thinking about these options, but this illustrates the dangers of different forms of governance. A look at history will help me explain these comments.
The oil shocks of the seventies showed us up as being a country that, despite having riches of energy sources, was too reliant on overseas oil products. We had hydroelectric dams to provide us with electricity but not enough to make any income from this; and we had a petrol refinery at Marsden Point that had opened in 1964. This was a project of some vision, initiated by a Labour Government, that ensured we did not have to rely totally on imports of refined petrol products. It was not enough to protect us from oil shocks; however. Something else was needed. What was needed was a vision.
That vision was provided by Robert Muldoon’s government in the form of their Think Big projects. Think Big was about not only making us energy independent but also to use our energy resources to add to the country’s income. The making of income was in the form of projects to boost exports;- projects such as the Tiwai Point Aluminium Smelter, the expansion of the Glenbrook Steel Mill and the Kapuni Ammonia-Urea factory. The Clyde Dam was built to add more electricity to the grid to support such projects. To ensure supply of electricity during times of drought, the Huntly coal-based Power Station was built, using clean local coal.
Independence of supply of petroleum products was addressed through the formation of a government company, Petrocorp, in 1979. This company discovered the McKee oilfield in 1980 and owned the Natural Gas Corporation. The early eighties saw the construction of the Motonui Synthetic Petrol Plant, a partnership between the Government (75%) and Mobil who owned the intellectual property for the technology. The Motonui plant was a world first. The Marsden Point Refinery was expanded and the main trunk railway line electrification begun, aimed at reducing reliance on diesel.
Overseas companies were encouraged to explore for oil reserves around our coast as the only thing missing was a secure supply of oil which, once found, would supply Marsden Point and ensure our energy independence. This was the Vision of Robert Muldoon’s government and if it was still in place, and local oil supply secured, we would not only not be worried about the rest of the world’s supply but could potentially be earning income from any surpluses.
So, what went wrong? In the first instance money problems occurred. The country had to borrow heavily to pay for these projects and Robert Muldoon, who also acted as Minister of Finance, was a long way from being an economics genius. The country was significantly in debt and the next few governments, who were of a pragmatic nature, set about reducing debt by selling off assets. Petrocorp went in 1987; Motonui was completely private by 1990, and Marsden Point was sold to a consortium of oil companies. While we had a vision, and saw that vision to reality, we could not retain control of it.
Once in private hands, the driving motive becomes money. This caused the synthetic petrol facility to close in 1999 as at that time it was cheaper to import petrol. Wouldn’t it be great to have that producing now? Kiwi Rail decided to move back to diesel in 2016 as diesel locomotives were cheaper than electric ones. Pragmatic Governments had contributed to the crumbling of our vision. Perhaps they could have done better at protecting the vision, but they were in a weak negotiating position when trying desperately to reduce debt.
The real destruction to our energy vision came from an ideological government who just didn’t like oil, preferring bicycles and electricity. Jacinda Ardern decided to halt oil exploration which completely changed the dynamics for Marsden Point, so they changed to become a petrol import facility in 2022. The refinery that had been crucial for energy independence for sixty years was gone. Jacinda Ardern’s government also decided to stop coal mining which meant the Huntly Station now had to import dirty foreign coal to replace the local product. The ideologists killed the vision for independent energy supply in New Zealand.
In answer to the question posed in the title, I believe it is important for all three aspects to work together. Ideology can work well if it has a vision, but not if it is just about destruction. Vision needs to work alongside pragmatists to ensure the vision is realised properly and affordably. Do we yet have these groups working together? Unfortunately not.
