Hughes Gareth: Energy (Fuels Levies and References) Amendment Bill — First ReadingText is incorporated into the Bound VolumeHughes Gareth: Energy (Fuels Levies and References) Amendment Bill — First Reading[Sitting date: 05 March 2014. Volume:696;Page:16381. Text is incorporated into the Bound Volume.]GARETH HUGHES (Green): Kia ora Mr Deputy Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise to support the Energy (Fuels Levies and References) Amendment Bill. Late last year I had the privilege of touring the Marsden Point oil refinery near Whangarei. It is a significant piece of New Zealand infrastructure. It is where the bulk of our diesel comes from and a significant amount of our other liquid fuels like jet fuels and petroleum. It is a point of entry for our fuel. I am a big fan of going to gigantic steel structures and seeing some of that industrial New Zealand such as the Tīwai smelter down south. Seeing that refinery and the huge flows of oil that come through it makes you think about the vulnerability if that oil stopped flowing of our wider economy. But there is also the impact of that fuel coming to New Zealand being combusted and contributing to climate change as the member Rino Tirikatene just mentioned.The price of fuel at the moment is about $2.20 a litre. The energy contained in a litre of oil is the equivalent of an average person working for about 4 to 6 weeks. Can you imagine employing someone—I know that some National members would probably like to employ someone for 4 to 6 weeks’ work for only $2.20 in payment. What you can see is the fantastic stored energy contained in oil. The stored sunlight that fell on the Earth literally tens of millions of years ago is harnessed but it has also come with a corresponding impact which is climate change.There is also the huge dependence on this substance by society by our communities and by our economy. I am too young to remember the carless days of the late 1970s and the 1980s but I know about the huge shocks that put us and other developed economies and developing economies through that.Denis O’Rourke: It wasn’t so bad.GARETH HUGHES: It was not so bad? Really? It was not so bad? Tell that to the New Zealanders who had to struggle with that Mr O’Rourke. I think it was a significant shock to the New Zealand economy and it stimulated some of the research we have today.I know that that side of the House likes to rubbish it whenever there is mention of peak oil. But what we are seeing right now in New Zealand and around the world is the peaking of conventional oils. Global oil production at conventional sources has plateaued since 2008 and what we see with the rush to extreme forms of extraction like deep-sea drilling fracking the tar sands in Canada and the methane hydrate exploration in Japan and in New Zealand is peak oil in action. We are going to evermore extreme lengths to get our fixes of oil. That is why this bill is important.Our economy at the moment is incredibly dependent on oil—and I hope it is not into the future—and what we are seeing is pervasive high oil prices. When you look at the graphs that I put before the House last term they show the spiking of oil prices since 1970. Each significant global recession in the last four decades has been preceded by an oil shock. What you can see is the close correlation between a spike in oil prices and the impacts on global economies. In fact in New Zealand we did some analysis last term that showed that every US$1 price increase for a barrel of oil shaved $40 million to $60 million off New Zealand’s GDP. So it is right to be prepared for and concerned about oil shocks.It is right to have oil stocks in reserve because New Zealand is incredibly vulnerable. We are one of the most oil-dependent economies on the planet. Our vehicle fleet is over 11 years in age. We drive some of the longest distances with some of the fewest passengers. We are incredibly dependent on oil and we have some of the oldest cars in the world. I would like to echo the concerns of Z Energy in the regulatory impact statement which said: “There are some concerns storing our 90-day stocks offshore particularly where the vast bulk is stored in Japan.” Z Energy I believe is correct to question whether in the event of a significant and severe oil shock that oil would actually be released to New Zealand. Obviously we have good relations with Japan but I believe that for peace of mind—and the officials advised that the extra costs would be only around $3 million—storing the oil in New Zealand is something that should be given more consideration. I hope we can explore that in further depth in the Commerce Committee.We are supporting this legislation unlike some parties in this Parliament because we think it is high time there should be the ability to adapt the fuel levies being paid. We know that oil prices fluctuate a considerable amount so we think the Minister having the ability by regulation to increase that is a smart idea. We believe in fairness and equity and we think the costs should lie where they are born. I do not think it is an equity issue to say that a marginal increase in the price of fuel is going to impact everyday New Zealanders because what I want to see is the costs lying where they fall. If you are a New Zealander who is privileged or has the infrastructure to walk or cycle to school or if you have got a SuperGold card and you take the bus to work then you are not burning oil. I believe it is unfair for you through the general Crown accounts to be paying for that. I believe we are sending the wrong signal to New Zealanders who are lucky enough or have the inclination to go oil-free by saying that they should payfor the oil stocks. I believe that those people who use their cars and use the roads should pay for the oil supply—the security of having those 90-day oil stocks.I believe it should be transparent and I believe we are seeing an increase in that now. For the first time we are not going to see the costs simply go out of the Crown’s general account. What we are going to see is a targeted levy transparent to New Zealanders. I believe it is going to encourage the alternatives because although I admit that the $20 million cost over 3 years is pretty marginal in the $8 billion fuel import bill of this country I believe sending a price signal at the margins will have some effect. What I want to see is this Parliament and this Government encouraging alternatives such as better public transport safer walking and cycling and innovative solutions like electric cars and sustainable biofuels.An issue I want to follow up in the select committee is again another of Z Energy’s concerns which is that biofuels might be covered under this levy. I find it patently ridiculous and counter-productive that this levy should be applied to sustainable biofuels. People who invest in a sustainable biofuel plant or put biofuels in their cars are doing a good thing for the climate a good thing for the country and a good thing for our economy. They should not be punished. I hope the Minister in regulation can make sure that biofuels are exempted as well much like bitumen and liquefied petroleum gas currently are under advice from the officials. I think that is smart.The big picture in New Zealand is that oil is one of our most significant economic challenges. We are importing $8 billion worth of oil annually. That is roughly the size of our nation’s deficit. What we are seeing is a huge risk to our economy and a huge impost upon New Zealanders. Unlike many councils businesses militaries and Governments our Government has no oil reduction plan. In fact it does not even have a plan to start planning. All it has is an oil production plan and an oil dependency plan. You can see that in the more than $14 billion it is putting on the credit card with the so-called roads of national significance. They should be called the “roads of National Party significance”. That is $14 billion that is making our country more dependent on oil and is giving Kiwis fewer choices to get around. You can see it in the deep-sea drilling cheerleading the Government is doing. It is literally rolling out the red carpet with $46 million in tax breaks and $25 million in direct subsidies to the oil industry. As the Ministry of Business Innovation and Employment rightly points out our oil production is declining. So all the Government has on the face of it is an oil production plan. What we need is an oil reduction plan and that is what the Green Party is about.We want to give Kiwis choices because in the last oil shock in 2008-09 many Kiwis found that the alternatives just were not there. There were not enough rail carriages in Wellington. They literally went to the museum to pull out rail carriages to put on the tracks. We saw that people wanted to cycle to school or work but could not because there was no infrastructure and they did not feel safe. Manufacturers and exporters who wanted to put their things on the rail line found that the National Government was closing rail lines like the Gisborne to Wairoa line.What Kiwis want is choices and what they are not getting under National is choices. All they are getting is more roads and more oil wells and no solutions. What we need to do and what is of benefit to the country and the economy is to provide Kiwis with choices—choices to get around faster through things like a central business district rail link and infrastructure like light rail and better buses for Wellington. Ironically this is what we are going to see will be the big benefit to motorists. Less-congested roads when people use public transport in our big cities means there is more road space for carpenters plumbers and the people who need to use the roads to get around. It is a huge economic opportunity for New Zealand to look at the alternatives like electric vehicles and biofuels. The Bioenergy Association estimates we could see30000 jobs created and become entirely self-sufficient in liquid fuels simply by using wood waste.At this election the choices when it comes to oil are clear. Under National you are going to see more cars more dependency more oil imports and more risky deep-sea drilling. Under the Greens you are going to see more choices such as the central business district rail link light rail clean energy jobs for New Zealanders and better macroeconomic opportunities for our country. Kia ora.