Pipelines And The Benefits Of Hindsight Vision

Trans-Tasman Political Pulse September 20

Pipelines And The Benefits Of Hindsight Vision

INSIGHTS ABOUT THE NEWS - The reaction to the breach of the Marsden Point refinery pipeline to Auckland is confirmation of the adage about “hindsight always being 20/20.”

Various political parties and businesses seem to believe they have all been pointing to pipeline vulnerability for years and how they have always known the answer. ACT even blamed the RMA. NZ First said it proved the need for a rail link to Marsden Point.

As reported in the NZ Energy & Environment Business Alert, the various voices making noise now were strangely silent when the issue of oil security was being thrashed over a few years ago. The inquiry then and the breach now highlight the strengths and weaknesses of the country’s oil security.

While the pipeline supplies petrol, diesel and jet fuel to Auckland, alternative transport and refined supplies from other ports mean it will probably be merely a mild inconvenience in the about 10 days it is estimated to repair the pipeline breach.

The problem is the 170km pipeline which directly connects the refinery to Auckland International Airport via the Wiri Oil Services Ltd terminal is the primary source of aviation fuel. This is more of an issue and the sector will be rushing to fix it though disruption and economic cost is inevitable.

The vulnerability of the pipeline and the Wiri terminal were well canvassed as recently as in the 2012 report into oil security. Air NZ identified the issue, as did others, in a submission on the report and said it felt any breach like the one now being suffered was manageable and NZ Refinery knew how to handle it. The airline was more concerned about a major disruption to the Wiri terminal and urged the construction of alternative backup storage facilities.

The review found the fuel supply network was already reasonably robust and the sector was adept at responding to disruption. Also “significant capital expenditure by Govt in the oil supply network is not required.”

Among the direct recommendations was to do pre-emptive planning for an emergency pipeline for jet fuel, though it appears there has been little progress on this.

The “gold-plating” of the infrastructure by building a second pipeline was considered too expensive due to the low risk of a major catastrophic event. This will now, of course, be questioned in hindsight, especially by politicians in the last week of the election campaign.

Trans Tasman’s sister publication, NZ Energy & Environment Business Alert, is a weekly source providing you with in-depth news, analysis and opinion on NZ’s energy and environment sectors.

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