Court Simon; Woods MeganSIMON COURT (ACT): I have a couple of questions for the Minister of Energy and Resources. Minister submitters raised a number of issues at the Economic Development Science and Innovation Committee which I don't think have been fully addressed but I would be really interested to get your perspective. Should vessels with fuel on them sailing towards New Zealand be included in the minimum stockholding obligation? Because the refineries on the east coast of Australia are just a couple of days' sail away and Australia has a much larger capacity not just to produce fuel but to store it. So Minister has the ability for stockholding on the high seas between Australia and New Zealand been considered in the stockholding obligation?Minister sorry I thought you were going to pop up and reply to that. I'm not sure if the Minister has been provided an answer by officials so I'll ask that again and then I'll move on to—CHAIRPERSON (Hon Jenny Salesa): The Minister is going to batch up the questions and then answer them at the end.SIMON COURT: OK great. Thanks. So the other question I have for the Minister is: given that this bill imposes a requirement on fuel companies to build tank storage in order to fulfil a minimum stockholding obligation onshore all of the associated pipe work bunded facilities groundwater monitoring—often not just for the duration of any consented facility but for a long period afterwards—it imposes significant additional cost on an industry Minister which many including the Labour Government have told New Zealanders that it is facing a twilight. Minister you described in the House I believe as recently as last night a just transition towards a low-carbon economy where hydrocarbon-based fuels will no longer be a large part of the energy mix. So Minister one of the issues raised by the organisations the fuel company suppliers who will be subject to a minimum stockholding obligation is this apparently difficult to resolve contradiction between the Government's requirement to hold more liquid fuels onshore at the same time as the Government's other policies are directing New Zealand towards using less liquid hydrocarbon fuels and in fact making it more expensive to do so. So Minister would you help the committee and those who are subject to these obligations to understand how these two policies which appear to contradict themselves—the Government's swift push towards low emissions low carbon and reduced reliance on what the Minister calls fossil fuels or what other people call highdensity high-energy liquid hydrocarbons. How does the Minister resolve that policy intent with the—Chlöe Swarbrick: Who calls them that?SIMON COURT: Chlöe Swarbrick asks Who calls them 'high-density high-energy liquid hydrocarbons?" Well the people who manufacture them Chlöe Swarbrick—the people in the upstream energy industry who get these hydrocarbons out of deep geological reservoirs in the ground pump them out or have them come out under their own natural pressure via an oil rig pump them on shore these high-density high-energy liquid hydrocarbons to fuel storage processing refineries for example. Whereas in New Zealand these high-density high-energy liquid hydrocarbons are often transferred by ship to refineries on the east coast of Australia for refining back into refined fuels Chlöe Swarbrick.CHAIRPERSON (Hon Jenny Salesa): Can the member come back to his question to the Minister.SIMON COURT: Certainly. The question is Minister that there appears to be polar-opposite policies that the Government is trying to progress with moving away from her so-called fossil fuels towards a low-emissions light-vehicle and heavy-vehicle fleet and at the same time imposing all of these obligations and costs on the industry to build more storage tanks. Minister could you explain that problem how you might resolve those two policy conflicts?Secondly Minister will you explain how these additional costs to the industry are likely to impact on consumers and how this might add to say the cost for a litre of petrol or diesel?Hon Dr MEGAN WOODS (Minister of Energy and Resources): Thank you Madam Chair. In answer to the first question that the member put around stock on the water and the extent to which that would count towards New Zealand's obligations I think we need to think about this as being on the water within the exclusive economic zone (EEZ) and on the water which is much further out and it obviously doesn't provide the resilience that this whole measure is looking to put in. The allowance for stock on the water within the bill extends to the borders of our exclusive economic zone. There's a careful balance that has to be struck between the flexibility of allowing some stock to be on the water to count towards it and pragmatism. Obviously if it's within the EEZ it's pretty close to being landed but as we know it can take time—particularly for jet fuel—once it's landed to actually be available to use.In the event of a fuel emergency New Zealand already has mechanisms in place for Australia to assist New Zealand. We're both International Energy Agency countries so that comes there.In terms of the conundrum that the member is trying to struggle with between the use of fossil fuels and decarbonisation and the transition there I point the member to the words "the transition". Nobody has said that we are going to stop using fossil fuels tomorrow; what we have to do is have a managed and planned transition and we need to ensure that we are ensuring resilience for New Zealand as we go through that. That is exactly what this legislation is about."