Smith StuartSTUART SMITH (National—Kaikōura): Oh thank you Madam Speaker. It is a pleasure to speak on the Fuel Industry (Improving Fuel Resilience) Amendment Bill.The National Party is supporting this bill although we do have reservations about the speed with which this bill has gone through the process—although we were ably chaired by Naisi Chen at the Economic Development Science and Innovation Committee; her attention to the time that is allowed for speakers and for submitters is legendary actually. She's quite a stickler for time but that is great. We needed to have that on this bill in particular because we didn't have the time that we needed to consider it fully.Actually the closure of Marsden Point has brought all this about and that happened quite a long time ago. That this bill was only introduced in June is actually quite unforgivable. This is a really important issue. As the Hon Peeni Henare mentioned before the disruptions with the jet fuel are quite significant. For example airlines were required to tanker. What that actually means is that instead of having enough fuel in with the normal safety reserves they had to often fill the tanks right to full to take a journey so they had enough fuel for a safe return journey as well—with more passengers on. So it actually cost them a lot of money. It also meant that some international flights had to fly with low fuel loads to Australia or Fiji and then refuel and continue on—extra landing fees; all those sorts of things—when actually airlines run on very small margins. They've got a huge capital expenditure upfront for the aircraft all those operating costs—it really made a big difference.So fuel security is a big deal for us and that came about because a shipment of fuel that arrived at Marsden Point was not up to the fuel specifications. It is quite comforting to know that the fuel specifications are so rigidly applied for the aviation sector. Obviously you can't pull over to the side of the road when you're halfway across the Pacific so it's absolutely essential we get that right.There are also issues that occur with other fuel particularly with diesel where we have one specification and we have winter diesel and summer diesel—which people don't really appreciate. So the chemical composition of those fuels does change and other countries have different specifications to us. But diesel was much easier to blend to deal with those issues should a shipment arrive not to the specifications that it was ordered under.So these current rules—the required minimum stockholding obligations are calculated on previous years as the Minister alluded to. But it's 28 days for petrol on average 24 days for jet fuel and 21 days for diesel. It was raised in select committee that diesel being lower than petrol is the wrong way around because actually when the Christchurch earthquake occurred it was diesel that was in short supply not petrol. When civil emergencies occur that will be the way it works because all the emergency services utilise diesel not petrol for their fire service for ambulances and so on. So that we believe is wrong and the wrong way around. So there was quite a bit of discussion about that sort of thing.So it's only June we're here now. Is that a good process? Well not quite. Could have been a lot better. But actually the current or the latest fuel storage data that I have that's on hand is 43 days for premium petrol 40 days for regular petrol. There's 47 days at a current rate of consumption with jet fuel on hand and 21 days for diesel. Again diesel is the one as I just alluded to that should be higher than any of the others but it's not unfortunately. The Minister went through some of the issues that were raised and the changes that we made and I think it's quite important that we go through that. There were 11 submitters and eight that appeared before the committee. They all brought helpful and useful suggestions—and this is the whole point of the select committee process of course. But I think it's often lost how collaboratively we work often in select committees—particularly when you've got good submissions as we had from the sector that affected all the nuts and bolts of that and how the legislation might work. We were able to make some changes that will make quite a difference.So the commencement date has already been mentioned and while it might seem that we've got enough fuel overall—those numbers that I mentioned before—that's a gross number; it's not on the individual companies and of course it will be individual companies that are required to keep that level of storage. So that is an issue for them to consider. But we're pushing the commencement date out. We'll give those companies enough time to get to the point where they can meet that minimum stockholding. It'll be tight—that's what they've told us—so we hope that that's enough time.There was also the point about the average of over a month that assessing those stockholding levels at any moment in time of course could be below those levels and it would have been nonsensical to not take an average so that's been put in the legislation. Of course the original level—if it was just taken as the legislation was written—would be quite unfair given the long lead times that these fuel orders come in on. Obviously they don't just call up for a shipment to be delivered next week. There are quite long timelines; they come from Singapore mostly. So it's at least a week—it might be two weeks actually—sailing from Singapore to get here. So those sort of lead times have to be taken into account.There are I think the minimum penalties—there was a penalty in the proposed section 65 which was potentially $500000 for individuals. We thought that was unfair for individuals so that's been lowered to $100000. You know these people are not going to go out and deliberately breach these rules but if they do breach the rules we didn't think $500000 was a fair level so we've brought that back to 100000.We also—how individual companies could move their fuel around in terms of their obligations; we discussed that at great length. There was quite a long discussion about the exclusive economic zone (EEZ) because shipments inside the EEZ are counted as stockholdings here in New Zealand and shipments are moving around. That's one advantage in fact with Marsden Point closing: we no longer have a single point of failure in theory—we do for jet fuel probably because of the issue with the pipeline and all of our fuel going down to the airport that way. But now the shipments are coming down through different ports; the ships are dropping off at different locations. So we're getting more frequent shipments of fuel than we had before albeit I don't believe Marsden Point should have closed. I'm not for a moment supporting that at all.But I think this bill is in good a shape as we could get it in the time that was allowed. I'd like to thank all of the submitters who helped this process go as smoothly as possible and my fellow select committee members who—we had a very collegial go at this bill and I think we've knocked it into as good a shape as possible. Thank you.