Some years are remembered not for what they begin but for what they reveal, and this year New Zealand's fuel crisis has revealed a quiet gap between how the country got through and how it would fare next time. Business leaders, surveyed by the NZ Herald, judge that the nation managed this disruption but hold little faith in its capacity to weather a longer or harsher shortage, pointing to thin fuel reserves and a shaky confidence in gas. Their unease sits uneasily beside the reassurance many feel about electricity, and the split between energy producers and energy users reminds us that securit
Business Leaders Warn NZ Energy Security Is Fragile, With Gas and Fuel Reserves Under Scrutiny
We dodged the issue during the fuel crisis this year.
Mark
The headline finding is that business thinks New Zealand coped this year but isn't ready for the next crisis. Why does that matter?
Mimi
Because the people saying it run freight, food distribution and breweries. They felt the disruption directly, and they're describing it as a near miss.
Mark
Mainfreight's Don Braid said the country dodged the issue.
Mimi
Yes, and he called emergency holding capacity pathetic compared with other developed regions. Another leader notes Australia is heading toward about 40 days of onshore diesel plus eight days of government reserve.
Luke
Worth flagging that those comparisons are individual respondents' claims, not figures the survey verified. The OECD ranking is one state-owned enterprise chief's assertion.
Mark
What about businesses themselves? Are they preparing?
Mimi
Only 25% say they've invested in fuel and energy resilience, and 47% have no plans to. So the criticism of government sits alongside modest private action.
Luke
Though we don't know why. Cost, space, or an assumption that it's the state's job? The survey figures don't say.
Mark
The gas versus electricity split seems important.
Mimi
Very. Fraser Whineray says gas is the issue and electricity will be fine. Others note record generation and storage, but one investment executive says secure yes, competitive prices no.
Luke
And the overall confidence score is 2.75 out of 5, with 42% not confident. That's a survey of business leaders, so it measures sentiment, not actual supply risk. We also don't know the sample size from this excerpt.
Mark
Agribusiness scored lowest, 1.86?
Mimi
Against 3.78 for energy and utilities. Producers feel secure; those who depend on diesel and power don't.
O Pulso
- Executives doubt New Zealand could survive a longer or harder fuel shortage than the one it just endured.
- Fuel reserves are measured against Australia's 40-day diesel stockpile, and the local comparison looks stark.
- Nearly half of surveyed firms have no plans to invest in fuel or energy resilience, even as warnings sharpen.
- Confidence in gas supply collapses while electricity is trusted, and agribusiness sits at the bottom of the scale at 1.86 out of 5.
- Calls for a formal 30-year energy plan and for treating energy as critical infrastructure are gathering, but no decision has yet been made.
Some years are remembered not for what they begin but for what they reveal, and this year New Zealand's fuel crisis has revealed a quiet gap between how the country got through and how it would fare next time. Business leaders, surveyed by the NZ Herald, judge that the nation managed this disruption but hold little faith in its capacity to weather a longer or harsher shortage, pointing to thin fuel reserves and a shaky confidence in gas. Their unease sits uneasily beside the reassurance many feel about electricity, and the split between energy producers and energy users reminds us that security is always a matter of where one stands. The question now drifting through boardrooms and policy circles is whether a country that depends on distant suppliers will decide, in calmer times, to build the stores and long-range plans that its own worries are asking for.
Don Braid, managing director of Mainfreight, does not soften his view. New Zealand, he says, got through this year's fuel crisis without really confronting the problem, and it is nowhere near ready for shortages that last longer or hit harder. His verdict on the country's emergency holding capacity is blunt.
His view is one of many gathered in a NZ Herald survey of business leaders. Most judge that the country coped reasonably well with this year's disruption but doubt it would manage the next one. A food distributor sees the episode as a warning to lift reserves, while an insurance chief is more reassured, noting that the Government handled supply well and that more storage is on the way. The harshest assessment came from an energy leader who scored national preparedness at the lowest possible mark, comparing New Zealand unfavourably with Australia's planned 40 days of onshore diesel and its strategic reserve. Another respondent noted the country holds the fewest days of fuel supply in the OECD and leans heavily on Singapore and Korea.
Yet warnings have not translated into action everywhere. Only a quarter of firms have invested in fuel and energy resilience, while 47 per cent have no plans to. Confidence in secure, affordable energy over the next three years averages 2.75 out of 5, with gas the chief worry. Electricity is widely seen as sound, but gas is not, and the divide between producers and consumers is stark: energy companies score 3.78, while agribusiness scores 1.86.
Several leaders now argue that energy should be run as national strategy rather than left mainly to markets. The Employers and Manufacturers Association wants a formal 30-year plan, and others want energy treated as critical infrastructure. What the country will watch is whether the next Government answers that call, and whether the firms that say resilience matters begin to pay for it.
Don Braid, managing director of Mainfreight, does not soften his assessment. New Zealand, he says, dodged the problem during this year's fuel crisis, and is by no means ready for shortages that run longer or bite harder. In his words, the country's emergency holding capacity is pathetic next to that of other developed regions.
Braid is one of the business leaders whose views are gathered in a NZ Herald boardroom-mood survey. The broad finding is that executives think the country coped reasonably well with this year's fuel disruption, but doubt it would cope with the next one. A food distribution boss says the episode has highlighted the risk and the need to raise reserves. An insurance chief executive is more upbeat, saying the Government handled fuel supply challenges well and that more storage is being developed.
The harshest verdict comes from an energy leader who rated national preparedness at the lowest possible score. That leader points to Australia, which is moving toward about 40 days of diesel stored onshore, plus a further eight days in a government strategic reserve, reflecting diesel's importance to agriculture and, in Australia, mining. New Zealand, the respondent says, has seen no new government policy on fuel resilience since hostilities began in the Middle East. A state-owned enterprise chief adds that the country has the lowest days of fuel supply in the OECD, relies too heavily on Singapore and Korea, and would be vulnerable if the United States limited diesel exports.
Despite those warnings, many firms are not building their own buffers. Asked about investment plans for the next 12 months, just 25% of respondents say they have invested in fuel and energy resilience, such as backup supply, storage or hedging. Some 47% have no plans to.
Looking ahead, confidence is thinner still. Asked how sure they are that New Zealand will have secure electricity and gas at competitive prices over the next three years, respondents gave an average of 2.75 out of 5. Some 42% are not confident, including 16% who chose the lowest score, while only 27% are confident.
Respondents draw a clear line between electricity and gas. Non-executive director Fraser Whineray puts it flatly: gas is the issue, and electricity will be fine. An energy executive agrees, confident about secure and affordable electricity but not about gas. An insurance CEO notes that never has New Zealand's level of electricity generation and storage been so high. A senior investment executive, though, splits the question in two: yes to secure supply, no to competitive prices.
The sharpest divide is between those who produce energy and those who depend on it. Energy and utilities leaders are the most confident, at 3.78 out of 5. Agribusiness leaders are the least, at 1.86. DB Breweries managing director Peter Hart says reliable, competitively priced energy is critical for manufacturers, and that investment in generation, storage and infrastructure must keep pace with declining gas supply and rising energy costs.
Several respondents want energy handled as national strategy rather than left mainly to markets. EMA chief executive John Fraser-Mackenzie calls for a formal 30-year energy plan covering generation and distribution, well communicated so local and international business can trust supply. An entertainment industry CEO urges the next Government to treat energy security as critical economic infrastructure, and a mining sector leader says fuel and energy market regulatory settings are not fit for purpose. Others, including a hotel group boss, favour cutting reliance on imported fossil fuels by moving faster to produce more clean energy at home.
What to watch is whether the next Government answers the call for a long-term energy plan, and whether firms that say fuel resilience matters start spending on it.
Citações Notáveis
We are by no means prepared for longer, more aggressive fuel shortages.— Don Braid, managing director, Mainfreight
Gas is the issue. Electricity will be fine.— Fraser Whineray, non-executive director
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