TLDR/Summary

• The just published 2025 NZ Fuel Security Study recommends increasing storage capacity, trucking logistics, considering biofuel development and accelerating zero-emission vehicles over reopening Marsden Point oil refinery (estimated at $4.9-7.3 billion).
• While the Study models a complete 90-day fuel import cessation (a substantial improvement over previous analyses), it fails to examine longer timeframes or identify when systems would break down.
• The Study’s “severe disruption” scenario avoids naming specific global catastrophic risks like the effects of nuclear winter or solar storms that could cause prolonged or permanent disruptions to global trade.
• The Study evaluates biofuel options based on a single large tallow refinery rather than considering distributed smaller-scale seed oil solutions that almost certainly would provide better resilience in a catastrophe.
• To maintain minimal functioning during long-term disruptions, we estimate NZ would need to produce at least 200 million litres of biofuel annually, yet the Study doesn’t analyse how this minimum could be achieved sustainably, instead only examining a single larger (expensive) solution.
• The Study misses the opportunity to examine how fuel security connects to NZ’s National Risk Register, public information, or NZ’s potential role as a global food producer and possible refuge during worldwide catastrophes.
• Our own extension of the analysis estimates that essential services would require approximately 17% of normal diesel consumption (5% for lifeline utilities, 5-15% for critical transport, 0.6-2.8% for minimal agricultural production), meaning current stockholdings would only last about 160 days in a catastrophe.
• This ‘point of breakdown’ is not at all apparent from the 90-day calculations in the NZ Fuel Security Study – highlighting the need for further research in this critical domain.

What is the NZ Fuel Security Study?

The NZ Ministry of Business, Innovation and Employment (MBIE) recently published its commissioned NZ Fuel Security Study, developed in response to growing concerns about the nation’s vulnerability to disruptions in global fuel supply chains.

As a remote island nation that imports essentially all of its refined fuels, NZ faces a range of challenges and vulnerabilities in ensuring fuel security.

The Study aimed to map NZ’s fuel consumption trends, investigate reopening the Marsden Point oil refinery, assess the risks of extended fuel shortages, and evaluate potential mitigation options.

This work is intended to inform a forthcoming Fuel Security Plan that will guide national strategy for building resilience in the medium to long term.

Given that a secure and resilient fuel supply is not just critical to NZ’s economy but potentially to NZ’s survival as a functioning society post-catastrophe, the government’s initiative is timely and necessary. Indeed, we previously blogged about what the Study would need to do to fully inform resilience measures against global catastrophic risks.

As we’ll explore in the present blog, the Study’s approach to catastrophic risks does not provide the information necessary to fully inform decisions around preparing for the most severe scenarios that could threaten NZ in an increasingly unstable world.

Main Findings of the Study

The Fuel Security Study, conducted by Envisory and Castalia, was delivered in two parts. The first focused specifically on investigating the feasibility of reopening the Marsden Point oil refinery. This analysis concluded that reestablishing the refinery would be prohibitively expensive, with capital costs estimated between NZ$4.9-7.3 billion, a construction timeline of at least six years, and significant ongoing operational costs.

The report determined that a reopened refinery would unlikely be economically viable without substantial government support and would contribute only modestly to fuel security while increasing NZ’s greenhouse gas emissions.

The main Study mapped NZ’s international and domestic fuel supply chains, projected future demand trends through 2035, and modelled various disruption scenarios to evaluate economic impacts and potential mitigation options. The analysis assessed both international supply disruptions (including a severe 90-day cessation of all fuel imports) and domestic logistics disruptions affecting critical infrastructure. The Study recommended a portfolio of mitigation measures including:

• Increasing diesel storage capacity by approximately seven days of national demand
• Expanding jet fuel storage capacity, especially at or near Auckland Airport
• Establishing additional trucking capacity for emergency distribution
• Supporting biofuel development, particularly for jet fuel and potentially for diesel applications
• Accelerating the transition to zero-emission vehicles (especially for light vehicles)
• Continuing to develop international arrangements to protect supply chains

The Report concluded that reopening the Marsden Point refinery or developing a small refinery for indigenous crude would be among the least effective options compared to the other measures.

Following the Study, Resources Minister Shane Jones admitted the Crown cannot afford the reopening option. Instead, he has proposed a special economic zone around the former refinery site to enable alternative fuel manufacturing like biofuels, with the aim of protecting NZ’s fuel security while preventing development from being blocked by “Nimbyism.”

Global Catastrophic Risks: The Missing Dimension

What the Study Got Right

The 2025 Fuel Security Study makes important strides in considering severe disruption scenarios beyond previous analyses, which focused mainly on modest 10% supply reductions. Most notably, the Study models a “severe disruption” where NZ experiences a complete cessation of fuel imports for 90 days. This represents a significant evolution in thinking about fuel security, acknowledging that extreme scenarios are possible and warrant planning. The Study also correctly identifies that such a severe disruption would likely be part of a broader economic and societal crisis, noting that “the whole NZ economy would be impacted for reasons unrelated to fuel supply” (p.31). This concurs with our own research work examining NZ’s vulnerability and resilience to scenarios such as Northern Hemisphere nuclear war.

Additionally, the Study provides a useful baseline by comparing potential fuel availability during severe disruptions with Covid-19 Level 4 lockdown consumption patterns. This offers a real-world reference point for dramatically reduced fuel demand during a crisis (albeit during Covid-19 lockdowns the entire export industry was effectively still operating) and therefore projections of how long stockholdings might last.

The Study also acknowledges that essential services and critical government functions would require only a small fraction of normal fuel demand—approximately 5% for diesel and 3% for petrol for lifeline utilities and potentially another 5–15% demand for critical transport, eg, food distribution and essential workers (p.33). There is no estimate of off-road liquid fuel consumption by agricultural processes for food production (despite these being essential for feeding New Zealanders).

Methodological Shortcomings

Despite these advances, the Study falls significantly short in its approach to global catastrophic risks (GCRs). Most conspicuously, the “severe” disruption scenario (pp. 31-33) avoids naming any specific catastrophic events that might cause such disruptions. The report states, “We do not speculate on the cause of such an event,” which deprives readers—and more importantly, decision-makers—of the concrete contexts needed to fully grasp the implications.

References to “major global war” or “major sustained global banking failure” appear briefly but are not developed. The absence of explicit discussion of solar storms, nuclear conflicts, extreme pandemics, global cyberattacks, or Major Power wars makes the scenarios abstract and difficult to conceptualise, potentially undermining the urgency of preparedness measures.

A fundamental methodological weakness is the Study’s reliance on point estimates rather than trends or ranges in its “severe” scenario. The 90-day timeframe for the severe disruption scenario appears arbitrarily selected without justification for why this particular duration was chosen. This approach fails to show how resilience measures would perform across different timeframes—what if the disruption lasted 180 days, one year, or became the new normal? The analysis doesn’t show at what point NZ would transition from “muddling through” to being unable to maintain essential services (see below for our own details on this).

This limitation is particularly problematic given what we know from analogous fields. For instance, research by Simon Blouin and colleagues on food security during catastrophic electricity outages has shown that the United States could weather a food supply shock of a month or two if there was 10-days’ household stored food. Whereas consuming these stockpiles makes little difference in a one-year disruption. Similar trend analysis for fuel scenarios would provide critical insights into when different mitigation measures become insufficient.

Comparison of Mitigation Options: Apples and oranges

The comparison of mitigation options (pp. 72-79) suffers from methodological inconsistencies that make meaningful evaluation difficult. The Study employs a “volume usefulness” metric that combines the amount of fuel an option could provide with its scenario usefulness. However, this approach leads to comparing fundamentally different scales of intervention.

For example, the biofuel option is evaluated based on a single large refinery of a specific size. This creates a situation where biofuels appear “effective but expensive,” even though they oversupply compared to some other solutions. A more consistent approach would be to compare all options at equivalent volumes (eg, analysing the cost and feasibility of each option providing, say 100 million litres of diesel fuel equivalent annually).

The analysis also fails to provide a clear comparison of how different options would perform under scenarios such as: (A) maintaining only critical government functions, lifeline utilities, essential transport, and minimal agriculture to feed the population during a one-year or five-year catastrophe; (B) sustaining 50% of business-as-usual (BAU) operations; and (C) maintaining BAU levels. A tiered approach like this to the zero imports scenario would offer much clearer guidance for decision-makers about which solutions best address different severity levels and durations of catastrophic disruption. Furthermore, arguably government interventions ought to focus primarily on ensuring supply of basic needs under catastrophe scenarios, rather than supporting business-as-usual during lesser shocks.

Biofuels: More depth required

The treatment of biofuels (pp. 63-64) is notably superficial given their potential importance in a global catastrophe scenario. The Report’s preference for “used oils and animal fats” (p.64) over vegetable or seed oils focuses on lifecycle emissions rather than security or cost-effectiveness considerations. In a true catastrophe, seed oil production might be more readily maintained than the operation of freezing works, which depend on export markets and complex supply chains. Tallow, highlighted in the Report, is merely a byproduct of meat processing facilities that might not operate in a severe global disruption.

The analysis doesn’t consider important existing infrastructure such as Canterbury’s PureOil NZ canola food oil plant, which would be relevant to understanding NZ’s current capabilities and the potential for distributed smaller scale biofuel plants, rather than potential dependence on a single central producer and the vulnerabilities inherent in that arrangement. Indeed, this refinery used to produce biodiesel (before food oil became more profitable).

Looking Beyond the 90-day Horizon

Perhaps most fundamentally, the Study’s 90-day severe disruption scenario falls well short of the timeframes necessary for genuine global catastrophic risk planning. Events like nuclear winter (up to a decade in length), volcanic winter (several years), extreme solar storms with cascading infrastructure failures, or a conflict that permanently disrupts global shipping (eg, through destruction of vessels and/or refineries) could all create disruptions or global fuel trade reconfigurations lasting years or even decades. Existing modelling of food trade networks shows that this concern is important and could leave some trade network nodes without supply following global catastrophe.

A truly robust Fuel Security Plan will need to address how NZ could maintain minimal critical functions for extended periods (see our analysis below)—potentially transitioning to a fundamentally different energy system over time. This horizon is largely absent from the current analysis, potentially creating a blind spot in national resilience planning.

The issue is particularly salient given the views of major energy corporates such as Z Energy, who have provided a somewhat complacent ‘House View’ on matters. In un-dated sponsored content on Business Desk, Z Energy expressed confidence in NZ’s fuel supply chain resilience for handling conventional disruptions. But their analysis fundamentally overlooks the unique challenges posed by global catastrophic risks. Z’s “worst case” scenarios still assume functioning international markets and temporary disruptions, rather than considering truly existential threats like nuclear winter, global infrastructure collapse from solar storms, or prolonged geopolitical realignment that could sever trade networks for years or decades. Z Energy’s “55 to 90 day stockpile” strategy provides a buffer for “replumbing the system” but offers no solution for scenarios where there simply is no system to replumb. Concerning is the absence of any discussion about developing local production capacity that could operate independently of global supply chains during a prolonged catastrophe—precisely when such capability would be most vital for national survival. We note of course that any development of local production or incentivised transition from BAU would likely directly compete with Z Energy’s business, so their position must be taken with a grain of salt and in general national resilience planning must not be beholden to the preferences of existing energy suppliers.

Truly Resilient Solutions

The Study is right to note that fuel security planning may need to look beyond ‘lifeline utilities’ with the fuel demands of additional essential services to be quantified in Civil Defence and Emergency Management (CDEM) plans.

However, while agriculture is acknowledged as a diesel consumer, the Fuel Security Study doesn’t provide the detailed analysis of agricultural fuel requirements that would be needed for planning food security during prolonged catastrophes.

We have previously modelled the ‘bare minimum’ liquid fuel requirements for off-road agricultural production to produce minimal food supply for just the NZ population. This sums to less than 22 million litres of diesel (with optimised grain and vegetable cropping under unchanged climate conditions [0.6% total annual diesel consumption], or up to 107 million litres for dairy production in a nuclear winter scenario (ie, 2.8% of diesel consumption). However, realistic off-road consumption to produce just enough food would likely be greater, given the highly optimised assumptions in our analysis.

We can therefore sum the diesel fuel needs of 5% for lifeline utilities, up to 5–15% for critical transport, and 0.6–2.8% for off-road agriculture, resulting in up to 11–23% of BAU diesel consumption as a bare minimum. Taking the mid-point (17%) this equates to 1.8 million litres per day.

This result means that without onshore liquid fuel production, no matter how many trucks NZ has for distributing fuel, all stockholdings are exhausted by 166 days, even assuming that the relevant restrictions and prioritisations were implemented without delay when catastrophe struck.

None of this information is conveyed by analysing a single 90-day fuel supply shock, without projecting processes and trends across time.

The critical question is not, ‘Can we muddle through an arbitrary 90-day shock’, it is surely, ‘Under such circumstances when will we run out?’ The latter is, for completely unknown reasons, not directly addressed in this ‘Fuel Security Study’.

The obvious next question is then, ‘How much local production of replacement fuels needs to be available?’ The answer is, at a minimum, for diesel (as above), 11% of daily consumption, or ~430 million litres per year – or about half of this in the first year if we are judicious with the 166 day minimal buffer supply.

How could ~200 million litres be sourced locally. One answer is in the Report: biofuels. Unfortunately the Report mostly estimates costs for a single refinery, tallow-type hydrogenated biodiesel solution. Which the report finds to be expensive, reporting throughput of 200,000 tonnes per year creating up to 220 million litres of renewable diesel, at a capital cost of $530 million+ (p.64), or 537 million litres at an annual cost of $257 million (Figure 24, also p.78).

It does not attempt to cost, for example, a solution with 4 or 5 regionally distributed seed oil biodiesel refineries providing say up to 40 million litres each (indeed small seed oil biodiesel refineries have existed in NZ producing in the order of 10-20 million litres per annum). Such refineries could perhaps produce food oil commercially in normal times (for local use and export), but be configured to be able to pivot to biodiesel in catastrophe times. With anticipatory expansion of feedstock such as canola, perhaps on a standard rotation with wheat (with perhaps some substituting for dairy, resulting in net increased food energy production) such solutions might be commercially viable in normal times as well as providing much more sustainable resilience than ‘more storage’ or ‘more trucks’. These kinds of solutions should be analysed.

Beyond this we should also be contemplating the interdependencies among essential utilities and considering how, for example, to supply liquid fuel in contexts of protracted electrical system failure. This is another story, but interested readers can look to our blog on catastrophic electricity loss, and our in-depth webinar and expert panel discussion on the same topic.

Conclusions

The NZ Fuel Security Study provides a valuable starting point, but a more comprehensive approach to global catastrophic risks such as nuclear war, extreme pandemics, massive cyberattacks, and solar storms would require clearer scenario definitions, clear, consistent and relevant comparison of mitigation options, and planning horizons that extend beyond 90 days to explore the point of system break-down. Scenario exercises should push systems to the point of breaking and even beyond to truly understand the threats we’re faced with and mitigation options available.

The economic analysis would benefit from focusing not just on GDP impacts but on societal resilience more broadly, accounting for the expected value of rare but devastating global catastrophes in cost-effectiveness calculations.

For a truly comprehensive approach to fuel security in the context of potential global catastrophes, an expanded study would need significant expansion to address long-term (1+ year) scenarios, detailed sector-by-sector minimum requirements, and integration with broader national resilience planning. While the current Study represents an improvement over previous analyses, it continues to approach fuel security primarily as an economic and supply chain issue rather than as a potential existential threat requiring whole-of-society resilience planning.

These issues are particularly salient to NZ because there are strong reasons to overengineer resilience in island nations. It is not only to protect domestic populations. NZ can potentially feed eight times its population number through food exports if these can be sustained through catastrophe. NZ is also often cited as a potential ‘refuge’ for humanity, a place where societal complexity might persist through a truly global catastrophe. Securing fuel supply for essential functions in a sustainable way, across time, alongside accelerating electrification, is central to this.

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