Ardern calls out National over Auckland fuel crisis, attacks govt for setting up working group to look at fuel security over action; Deputy PM Bennett notes pipeline not owned by govt; Damage done over "months or years"; 2012 report contained warnings

By Alex Tarrant

Labour Party leader Jacinda Ardern has called out National government Ministers over briefings in 2011 and 2012 warning of the disruption likely to be caused if the oil pipeline linking Marsden Point and Auckland were put out of action.

National Party deputy Paula Bennett said warnings had also been given in 2005, and stressed that the pipeline was privately owned. Energy Minister Judith Collins reiterated that the government does not own the pipeline and claimed that enforcing “100% resilience” would have led to extra costs for fuel consumers.

Prime Minister Bill English over the weekend said government would do whatever it could to help mitigate the crisis, which has seen dozens of flights out of Auckland grounded and delayed, after fuel supplies started to run low. Collins said the government had been told on Thursday that the pipeline had experienced a drop in pressure, but that no disruption was expected. That had all changed by Saturday evening, she said. Auckland Airport is now facing 10 days of disruption.

‘They were warned, and set up a working group’

Much attention Monday morning was to a 2011 and 2012 series of reports to MBIE, warning about the level of disruption if such an instance occurred. Labour leader Jacinda Ardern said government had serious questions to answer over the episode, zeroing in on National’s Simon Bridges, who was Energy & Resources Minister at the time.

Ironically for Labour, given last week’s news flow over tax, Ardern ended up attacking Bridges for having set up a working group to look into fuel security issues at the time instead of acting.

“The Government has known for years that there were risks to the security of supply of fuel into Auckland, and particularly jet fuel to Auckland Airport. And they have only got worse as the city grows and air traffic expands,” Ardern said.

“One option raised by Air New Zealand in 2012 was for additional jet fuel storage to be built at the Wiri terminal. It urged the Government to help establish a new fuel storage facility in west Auckland with Wiri turned into a dedicated jet fuel storage facility. In a submission to an official review Air New Zealand said storage capacity for jet fuel at Wiri and the airport was ‘modest’.

“In a Cabinet paper from 2012 Ministry officials advised the Minister of Energy and Resources Simon Bridges that ‘such a terminal would improve the resilience of Auckland’s fuel supply chain, but would involve large capital investment – our consultants estimated an upfront cost of $57m.’

“Cabinet instead agreed to a mishmash of minor initiatives – among them; an oil contingency handbook, a working group of industry and officials to look at fuel security issues, allowing higher weight trucks to travel on roads, and a review of information on oil stocks. None of this cost the Government anything,” she said.

‘Backups would have meant costs for consumers’

Judith Collins on Radio NZ noted that there had been various studies done over the years on backups. “And the issue has always been, obviously the fact that we’ve never, in 32 years, had any problem with the pipeline at all, and the fact that the cost of having 100% resilience would all end up being passed on to consumers.”

There was an opportunity now to look at extra storage facilities in Auckland, she said. “The government doesn’t own the pipeline, or any of the fuel storage facilities. Those are all owned by the companies,” she said.

But government had offered any help that the companies ask for. Work included putting the military on stand-by to utilise fuel trucks they have to help bring in fuel supply.

Collins said the Marsden refinery had told her damage to the pipeline may have happened “over months or years” by someone digging around the fuel pipe in a particular space, damaging the insulation around the pipeline. This led to corrosion to occur and the pipe to then break.

Put to her that it seemed extraordinary a private land owner would be able to dig near such crucial infrastructure, Collins wheeled out the old line, “Well you might well question that.” There was significant signage around these sites, she said, adding the incident was “pretty amazing” for having occurred. Collins said she’d asked whether the land owner was digging for swamp kauri, which the company would not speculate on.

‘We weren’t aware of the report’

National deputy leader Paula Bennett – also Tourism Minister – also fronted on Radio NZ. She acknowledged the situation was “not great for the airline industry,” and tourism.

Bennett said she did not think the episode would damage New Zealand’s reputation as a tourist destination. “I think that people will see this as a very rare occurrence. It hasn’t happened for 30 years, we don’t expect it to happen again, and will be able to make travel plans accordingly.”

She was asked about government accountability, given this represented a significant infrastructure failure. “It’s not owned by the government,” Bennett replied. “It’s owned by the fuel companies. It is their job to be getting their product to its source and where it’s needed. So, as a consequence of that, it is their job to get it from the refinery into the airport.”

Asked whether it was the government’s job to ensure regulations making sure there were contingency plans, she said: “I’m sure that we will now look at that, make sure that we’ve got it all lined up properly. There’s other alternatives to a second line. There might be things like extra storage needed in Auckland…that gets you beyond the eight days.”

Bennett said she and Energy and Resources Minister Judith Collins were not aware of the MBIE reports detailing the risks – although did say she was aware of warnings given in 2005 when Labour was in power. “We’ll obviously be looking at it.”

“It’s private business…that own that line, and you would expect them to have better contingency plans. So, we’ll go and look at that, and make sure that we’re getting it right,” Bennett said.

“I just don’t think everything’s kinda the government’s fault…trying to blame us for a pipeline that’s gone down in really unexpected circumstances, that we don’t own and that is privately thing. So look we can look at it, we’ll look at the report, we’ll be willing to make changes as they need to, we’ll throw everything that we’ve got at it at the moment to make sure that it’s up and running,” she said.