Investing in a stranded asset

In 2021, RefiningNZ, the owners of the Marsden Point oil refinery, took a hard look at its future, and decided that it didn't have one. The refinery was shut down and dismantled. But now Chris Luxon wants to build a replacement:

Prime Minister Christopher Luxon says the coalition Government is considering whether to build a new oil refinery amid the country’s energy production challenges.

It comes as the Government’s report investigating New Zealand’s fuel resilience, including the potential re-opening of the Marsden Point oil refinery, is expected to be released in the coming weeks.

[...]

Asked if he would build a new refinery, Luxon said: “Well, we’re going to go look at that, that’s something we’re going to look at”.

This is simply madness. The underlying reason for Marsden Point's demise - collapsing demand for fossil fuels - has not gone away, and if anything, has got worse. When banks are refusing lending to petrol stations because they're a long-term credit risk, you know that petrol and diesel just don't have a future. And while Channel Infrastructure projected continuing demand for jet fuel, that's just one technological shift away from a similar collapse.

Basically, Luxon is proposing that we spend $8 billion to build an asset which will likely be immediately stranded upon its completion. This is what Luxon calls "better economic management". And that's not even considering the emissions impact, which will be significant enough that the next government will have to cancel it to stay within our emissions budgets. But clearly Luxon doesn't care about those, despite meeting them being officially on his government's KPI list.

If the government really wanted to invest in fuel resilience, it would be investing in electrifying our vehicle fleet as quickly as possible. Because we don't need to import electrons from unstable foreign despotisms; they're produced right here in Aotearoa, from the wind and the rain and the sun. Every EV we use saves the country money, and is a boot in the nuts to the petro-tyrannies. It means cleaner air, lower health costs, and higher living standards for kiwis. But how does that help Luxon's rich mates?