Mackey Moana: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — First Reading Second Reading 
Mackey Moana: Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill — First Reading Second Reading 
[Volume:651;Page:768] 
MOANA MACKEY (Labour) 
: 
 After that speech by Ms Pansy Wong it is hard to know where to start. As someone who said she wants to listen to New Zealanders maybe Ms Pansy Wong might want to explain why the only quotes the National Party has used have been from the chief executives of big oil companies none of whom are New Zealanders none of whom are going to support small businesses here that create biofuel. For all the talk about New Zealanders it is New Zealanders who are going to suffer because of the Energy (Fuels Levies and References) Biofuel Obligation Repeal Bill. 
I also want to challenge what the Hon Pansy Wong said—that we should not have mandatory requirements because we do not know what the standards are. Apparently that did not apply when it forced through an education amendment bill last week that gave the Minister of Education complete power to do whatever she wants—a blank cheque saying that she is going to develop what will be gazetted but without telling the House. It is not one law for all with this new National-led Government; it uses an argument when it suits it and when it does not it will completely abandon it. I would also like to know how the Hon Pansy Wong reconciles her position on this bill with the fact that that education amendment bill passed last week is a bill about compulsion. It is about forcing the education sector to do something that it is horribly opposed to was opposed to during the election campaign and which despite being watered down is going to force our schools to merely replicate what they are already doing just so that the National Government can save face because without that bill it has no education policy. 
This is yet another huge environmental backtrack from this new Government which has been in place only a week. Within a week we have gone from a country that people admired to a country that people can now ridicule for the position that we have taken on the emissions trading scheme—with a select committee to revisit the science of climate change. That is humiliating on the global scale especially for a country that campaigns on being clean and green and relies on being clean and green as a marketing advantage and also for tourism. I am getting a sense that the argument we will get on every piece of legislation dealing with the environment is that because some biofuels are bad we should do nothing. Because carbon dioxide is a gas that has a useful purpose in the atmosphere apparently we should do nothing despite the fact that in excessive amounts it severely alters our climate. The argument we are getting is that unless we can be convinced that every single biofuel ever produced in the world never does any environmental damage we will never do anything about it. If that is the position that this Government takes we will never do anything. Of course some biofuels are worse than others—we know that. That is why the Labour-led Government changed the bill and put in sustainability principles. 
Let us not forget that the National Party declared its hand on this bill very early in the select committee process. In fact very early in the select committee process before submissions had finished being heard before the bill had been changed National members declared that they would oppose it on principle. I think that needs to be put into the mix. This bill—like every bill last week—is not going to a select committee. This is another bill that is being rammed through despite the fact that this bill means people will lose jobs. We have already heard the case of a gentleman from Waharoa who has invested $10 million in two biofuel plants because of the Energy (Fuels Levies and References) Act and now he is going to lose that money. 
Hon Gerry Brownlee 
: Rubbish! 
MOANA MACKEY 
: Mr Brownlee says “Rubbish!”. Do members know whom I am going to listen to? It is to the man who spent $10 million investing in biofuel rather than to the Minister who is embarrassed about the fact that we are going into a global recession and who has cut research and development tax credits for our innovative companies. He is now cutting out the biofuels obligations which also provide research and development opportunities and jobs. This is at a time when we would expect our Government might be trying to create jobs and to save jobs. No Mr Brownlee has decided that because apparently he has something against compulsion those jobs should be lost and that $10 million invested by that company should be gone. I think that is shameful. At the very least this bill should have gone to a select committee so that that small-businessman—and those members talk a lot about small business when it suits them but they have been very quiet tonight—could have come to the select committee and told us exactly what the bill meant and what he needed to stay in place so that his business could keep going. I do not think that is too much to ask given that that is the normal practice of this House. 
The Act was incredibly important because it supported the development of the domestic biofuel industry. Many of the concerns that we all have about sustainability could be eliminated largely by having a domestic industry which means we would not have to import a lot of the biofuels that we all have a number of questions about. That was what the Act wanted to achieve. It was very reasonable and it was very modest in that respect. But the other thing it did was provide certainty to the sector. Everyone who came along including representatives from the oil companies said: “We just want to know what you’re going to do. Just tell us. If there’s going to be principles try to spell them out as simply and as clearly as you possibly can so that we can see the path you are going to go down so that we get the best idea possible.” The select committee worked incredibly hard. The officials worked incredibly hard on getting the principles in the legislation so that even though they are not legally binding at the moment the legislation is very clear. 
I have worked for an oil company. I know that oil companies do not make short-term investment decisions. They make long-term investment decisions. They looked at what we put in the legislation and saw a very clear steer that there was no point going to a long-term contract for biofuel production to import into New Zealand from a company that would eventually be ruled out when the sustainability criteria were put into place because they would lose money. Those contracts are long term; they are not short term. They wanted to know up front what they could import and what they could not import so that they could make business decisions based on that. 
Dr Smith who was on the select committee—but from his speech one would never guess because he obviously did not listen to a single thing that was said there—wanted to know why we passed the bill before the principles came into force. I think Jeanette Fitzsimons has largely answered that question. We did it because we wanted to provide certainty to the sector we wanted to provide a clear steer on sustainability and because the biofuel sales obligation for oil companies in the first year is 0.5 percent. This is about getting a sustainable biofuels domestic industry in New Zealand. We are not demanding 30 percent in the first year. It is 0.5 percent and going up half a percent every year. That can be done from our biofuels now. Dr Smith also wanted to know whether we had read—[ 
Interruption 
] Yes I do. I have read the officials reports I say to Mr Brownlee and he obviously has not. Dr Smith wanted to know whether we read the UK the UN and the OECD reports. Of course we did. That is why we changed the legislation. It was on steer from the Parliamentary Commissioner for the Environment and those reports that made us realise we could not simply put through a bill that had no sustainability steer whatsoever. 
Dr Smith remarkably also made the argument that we do not need to do anything because the market will provide this. The market has been fantastic for the environment so far. What an absolute success the free market has been for the environment. The fact is as Jeanette Fitzsimons pointed out these biofuel companies are going to rely on the oil companies to provide the blending capacity for biofuel. Does anyone really think they will do that voluntarily? Think back to when we had new players coming into the oil industry. I remember reading all the reports in the newspapers about how the existing oil companies were trying to shut the new players out. They were using the power that they had as the incumbents. These are companies in direct competition to oil. They are providing a product that makes the oil companies’ product less valuable. Does anyone think the blending facilities will be provided voluntarily when there is no compulsion under the law to do so? Dr Smith said that we were living in dreamland. I have to say I think the opposite is true. From working in that industry I can say that unless there is an obligation in the law I do not believe the cooperation will occur to allow that supply to happen. Dr Smith said that of course biofuel producers will say that because they have a vested interest. But he does not extend that same argument to the oil companies that he extensively quoted throughout his entire speech. Of course the oil companies have a vested interest so do the biofuel producers. The select committee weighed all this up considered all the submissions from all of them and moved forward on a bill that we thought met the needs of most as far as we possibly could. 
I want to talk a bit about the Parliamentary Commissioner for the Environment’s report on the original bill that was introduced to Parliament. It was presented before the select committee had reported back so significant changes were made to the bill. I read the report of the Parliamentary Commissioner for the Environment and I think she did a good job. She extensively used a paper that was published in  
Science 
: “Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change”; she relied heavily on that. But what has not been said is that a week later  
Science 
 had to publish a critique from the company that had developed the model that was used extensively in that scientific research saying that it had not been used properly. The study is called the Searchinger study because it has become quite infamous. A lot of people who oppose biofuels quote this study extensively and I think it is time to put on record that there is a lot uncertainty about it. The critique came from the folks at the Argonne National Laboratory which developed the model used in that research. They said that the research does not stack up and that the model was not used correctly. There is a good scientific principle that people might want to remember when they read research which is “garbage in garbage out”. We have to be very careful. I would be interested in seeing a critique of the bill done using that model correctly. 
The biofuel sales obligation was going to be 3.4 percent by 2012 in the original bill. The select committee reduced it to 2.5 percent because we had a look at what the capacity out in the sector would be.