Phoenix ๐ณ๐ฟ
11.5K posts

Phoenix ๐ณ๐ฟ
@RisesFromFlames
Kiwi, Married with children, Gamer (playing GW2 and ESO). Zionist Christian. I unfollow anti-semites.




๐บ๐ธ๐ฎ๐ท BREAKING: Oil is in freefall after the ceasefire announcement. Crude down nearly 9%. Brent down over 11% in a single day. The market just delivered its verdict on the ceasefire before the ink is even dry.













Itโs been interesting hearing Opposition Leader Chris Hipkins saying that the closure of the Marsden Point refinery was a โprivate business decision.โ While strictly correct, it omits significant government policies and decisions which made that โprivate decisionโ the only realistic one. I havenโt seen any media commentary on this. A May 2021 letter from the Refineryโs CEO to the then Minister of Finance described Marsden Point as one of โthe safest and most reliable refineries in the region.โ Notwithstanding that, the letter said it was considering a major change to its business to significantly reduce its Scope 1 and Scope 2 emissions, and become an import only terminal. It noted that the Minister had directed ACC to accelerate moves to divest from fossil fuels. The letter noted that ACC held around 10% of Refining NZโs shares, and as significant investments would be required to change it into an import only terminal, it asked the Minister to distinguish investment in Refining NZ from other fossil fuel investments given its critical infrastructure role. But why was Refining NZ looking at shutting down its refinery despite being one of the โsafest and most reliable in the regionโ? A 2019 Ministry for the Environment Regulatory Impact Statement lays it out plainly. Refining NZโs Negotiated Greenhouse Agreement - protecting it from full ETS exposure since 2003 - expired 31 December 2022. Under government policy settings it would then receive zero industrial allocation and face the full cost of its emissions. The ministryโs own analysis said this would โnearly halve the profitability of the refining businessโ - at 2019 prices of just $18 per NZU, it would produce an annual ETS bill of ~$20 million. The RIS recorded Refining NZโs profits over five years: โ2012: $31M โ2013: -$5M (a loss) โ2014: $10M โ2015: $151M โ2016: $47M Average that out and you get roughly $47M per year (with an exceptional 2015 year). The ministry itself said full ETS exposure would nearly halve profitability even at $18/unit. NZU prices didnโt stay at $18 which was readily foreseeable. The NZU price hit a record high of $88.50/unit in late 2022. Applied to the Refineryโs Scope 1 emissions of 1 to 1.3 million tonnes per year, thatโs an annual ETS liability of $88.5M to $115M, and thatโs before Scope 2 costs on purchased electricity and gas. On a business losing money in bad years, a potential $100M+ annual carbon bill isnโt a headwind. Itโs a death sentence. The ministry knew this in 2019, and suggested options the government could take in terms of emissions liabilities to keep the refinery in operation, warning: โThe closure of Refining NZ, which employs approximately 300 people, would have a significant negative impact on the Northland economy and would leave New Zealand dependent on the supply of refined petroleum products sourced from overseas refineries that may choose to prioritise supply to other nations ahead of New Zealand at times of shortages.โ Read the Ministryโs RIS for yourself (that specific comment is at paragraph 25) ๐ environment.govt.nz/assets/Publicaโฆ










Animal Farm takes over theaters May 1st. ๐ Tickets on sale now!













