The closure of Marsden Point oil refinery is expected to have a devastating impact on families in Northland for years to come, First Union says.
Refining NZ shareholders voted last Friday to switch the operation to an import-only fuel terminal from the middle of next year.
About 300 workers who are directly employed and several hundred contractors will lose their jobs or be affected when their workforce is downsized to just 60 workers, when the refinery becomes a storage facility for imported refined oil.
4000 jobs may be affected
Jared Abbott from First Union has represented the staff throughout the process and says it won’t be hundreds of jobs affected but thousands.
“There are another 100 fulltime contractors on-site and another thousand who work there intermittently and then, on top of that, you’re talking about the multiplier effect in the community,” he says.
“A study done about a decade ago said that, for about every job at the refinery it creates about eight jobs in that community, so it’s not just the 500 jobs that will go over the next year, it’s probably 4000.”
He says the impact on the local economy, especially near Ruakaka, is going to be huge.
“Not only is it that you’re going to lose all this money going into the area but also people are going to have to find jobs elsewhere.
“There are just no jobs around there, so people are going to have to disrupt their social infrastructure and there will be a socio-economic impact in years to come for those who remain,” he says.
“We already know what happens in these small towns once big manufacturing sights move out. They inevitably get eaten up by all of the other problems that poverty brings with them and I think overall it’s just going to be a really tough time over the next decade there.”
Abbot says staff at Marsden Point are shocked.
“They were really hoping there would be some intervention. I guess having quite a good knowledge of the fuel industry and supply change disruptions and things like that. They really weren’t expecting the government to be so hands off… Obviously it’s going to be devastating for themselves and their families and the impact on the region for years to come.”
Threat to energy security
The Maritime Union says the closure of the Marsden Point oil refinery is a threat to New Zealand’s energy security.
Maritime Union national secretary Craig Harrison says security and resilience are now the two most important factors for New Zealand’s economy and the closure of the refinery is simply corporate self-interest and not in the wider interests of New Zealand.
“Exposing New Zealand further to a highly volatile international situation is reckless.”
He says crude oil imported into Marsden Point provides wider supply options than relying on imports of refined fuel. Also, New Zealand cannot rely on foreign ship owners to have its best interest at heart.
“Marsden Point is more than a profit statement on a balance sheet - it gives New Zealand resilience in a global market.”
Refining NZ chief executive Naomi James told Newstalk ZB that New Zealand already imports all of the county’s fuel requirements today.
"Seventy percent is coming in as crude oil that we refine at Marsden Point, 30 percent is coming in as already refined product.”
She says the company is conscious of the strategic importance of the asset so as part of our process as engaged with the government when the strategic review started in April 2020. She says the company does not see taxpayer subsidies from the government as a long-term sustainable plan for business.
“We do think the plan that has been endorsed by shareholders is the right plan for the future.”
However, Harrison says there needs to be an urgent review by the government, “which seems to be getting bad advice”.