Four days before New Zealand’s September 23 parliamentary election, the ruling National Party government called in the military to deal with a fuel shortage amid escalating travel disruptions at Auckland Airport, the country’s main international travel hub.
On September 14, the pipeline from the Marsden Point oil refinery was discovered to have burst, leaving the airport with only 30 percent of its normal fuel. No public announcement was made for several days. Warnings only emerged as flight disruptions began four days later. Some Auckland service stations had also begun reporting they were running out of 95 octane grade petrol.
Virtually all of Auckland’s supply comes through the single pipe, which transports 40 percent of New Zealand’s fuel demand—2.26 million tonnes per annum. The pipe was made operational in 1986 by private owner Refining NZ.
On September 19, the government called in the naval tanker HMNZS Endeavour to move fuel from Marsden Point to ports around the country. The Defence Force cancelled an exercise in Singapore to release the ship and deployed 70 personnel, including 55 sailors, air force refuellers and truck drivers. The government also ordered more private tankers to deliver fuel, over-riding regulations concerning hours of work and weight restrictions.
Domestic military deployments have become increasingly common, dovetailing with intensifying austerity measures against the working class and ramped-up preparations to join Washington’s aggressive confrontations with North Korea and China in the Asia-Pacific.
Last November, when the South Island town of Kaikoura was isolated by a 7.8 magnitude earthquake, the government sent army convoys and navy vessels, including the visiting guided missile destroyer USS Samson, to evacuate the township. Billed as a “humanitarian” mission, this became an opportunity to exploit the natural disaster to conduct a military exercise involving the local population.
At Auckland Airport for most of last week, some 3,000 people a day were affected by cancelled domestic and international flights. With 9,000 passengers requiring rescheduled flights, Air New Zealand took the unusual step of restricting ticket sales for all but essential or compassionate travel. The government ordered a halt to air travel by public servants.
During the height of the disruptions, international flights were forced to refuel in Australia and Pacific countries. Many international and domestic routes were cancelled or diverted. Export goods were off-loaded to lighten loads. The Australian airline Qantas flew a jumbo jet and an Airbus A330 across the Tasman Sea to deliver extra fuel for its aircraft.
The pipeline is now reported to have been repaired, and rationing eased, but supplies will take several months to return to full capacity.
The crisis was initially caused by a mechanical digger striking the pipe, which runs underground through farmland north of Auckland. This event, which is still being investigated, is thought to have happened some time ago. The damage caused the pipe to corrode and begin leaking fuel. It was only discovered following investigations into a pressure drop in the line near the refinery. Engineers were brought in from Canada to supervise repairs.
The debacle exposes the precarious state of the infrastructure and the lack of investment by big business and successive governments in the country’s major population centre and industrial base. Despite frequent posturing by local and national politicians about Auckland being a “world class city,” it is beset by glaring social inequality and homelessness, a severe housing crisis, inadequate public transport and increasing public service cutbacks.
Campaigning for the election, Labour Party leader Jacinda Ardern called on the ruling National Party to “come clean over its failure to secure fuel supply for the airport.”
However, warnings about Auckland’s fuel vulnerability date back more than a decade. The last Labour government was alerted to the problem in 2005. A report commissioned by the Ministry of Economic Development warned that a three-week outage on the line would cause major disruption to aviation, and companies would struggle to supply petrol to motorists. Like the National government, which succeeded it in office in 2008, Labour ignored the warnings.
In 2012, the Ministry of Business, Innovation and Employment repeated the warnings. A cabinet paper raised the need for a new fuel terminal in West Auckland, estimated to cost $NZ57 million. Air New Zealand backed the recommendation, saying that a significant disruption to fuel supply would have serious implications for the aviation industry and the wider economy. Its submission warned that the public would not “uncritically accept a fuel supply shock” caused by planning failures. The government refused to act, instead approving several minor and cheaper measures.
Energy and Resources Minister Judith Collins told media on September 18 that the cost of the crisis to Auckland alone could amount to “millions and millions” of dollars. She dismissed longstanding warnings, however, saying, “the issue has always been around how do you get the resilience, without a massive cost to the consumer.”
Prime Minister Bill English similarly treated the pipeline issue as “a private matter for the airline and fuel industries.” He told Newstalk ZB the cost of building a duplicate pipeline would have had to be “passed on to consumers,” and so had not been done.
Such comments underscore the indifference of the ruling elite to the basic social needs of the population, which are made subservient to the profit demands of big business, in this case the airline and oil companies.
There was no mention of the fuel pipeline in a National Infrastructure Plan developed by Treasury in 2015, overseen by English as finance minister. English promised at the time that the plan would “rank New Zealand’s key infrastructure needs so that projects that provide the greatest economic benefit are prioritised.”
Refining NZ this week confirmed its intention to pay shareholders a dividend despite the enormous flow-on costs and social consequences of the crisis. The company expects the leak to hit its bottom line by up to $15 million, but will still pay investors a dividend of 6c per share. Refining NZ more than tripled its first-half profit in the six months to June, increasing net earnings to $35.2 million.
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[23 November 2016]