While we are fortunate not to have belligerent neighbours, we can’t afford to take our security for granted.
The good news is that some Cabinet ministers are starting to take notice. Energy and Resources Minister Megan Woods recently announced new rules requiring fuel companies to maintain on-shore supplies to cover around a month-long disruption from overseas. Diesel stock was topped up to protect Kiwis in the case of an emergency. It may not be a perfect policy. But it is a good solution to the challenging problem of petrol security.
We shouldn’t be naive about the risks.
Many readers will recall the fuel crisis that hit Auckland Airport in 2017. Damage to the pipeline that serves New Zealand’s largest city threatened to cut off the supply of petrol and diesel. The impact on business was massive. And all because a pipeline connecting Marsden Point Oil Refinery to Auckland Airport was damaged on a farm near Ruakaka. The end of processing at Marsden Pt in April only amplifies the importance of resource security.
Earthquakes and seismic tremors compound matters still further. We can ensure that our infrastructure systems have redundancies built in so that when parts of the system collapse, other parts can still operate.
New Zealand is fortunate to have an ample supply of power sourced from wind farms and hydroelectric dams. But renewables can also be unreliable. When the wind is blowing and the dams are full, New Zealand is well-positioned to meet demand.
The problem arises when demand surges during winter and generation fails to keep up. When that happens, those still July days suddenly begin to lose their appeal. And it is in this context that coal and gas play an important role in keeping the power on. The 2021 blackouts across the North Island illustrate how important grid security is.
The Electricity Authority is investigating how to ensure the security and resilience of electricity supply. We can expect it to adopt a balanced approach to risk management.
While the government has promised that all of New Zealand’s electricity will be generated from renewables by 2030, there is a strong argument to be made for continued use of gas and coal to shore up supply.
The greatest risk to New Zealand’s infrastructure security may originate in cyber space. If a rogue actor hacked New Zealand’s power grid, telecoms network or water utilities, the country would be thrown into chaos.
Experts speak of a cascade effect when critical infrastructure is destabilised. When one link in the chain goes down, the rest follow. Remember those two cables in Germany?
Take a hypothetical cyber attack on one of our major ports. It’s less far-fetched than you might think. Naval Dome, a cyber defence specialist, calculates attacks on maritime transport increased 400 per cent in 2020. A malware attack on the Ports of Auckland would have major economic repercussions, as it handles 60 per cent of New Zealand’s imports. That’s a lot of supply chain disruption to deal with.
What can NZ do to beef up its resilience?
The first step is to get a clear sense of the problem. The New Zealand Infrastructure Commission/Te Waihanga deserves kudos for its excellent cluster of research reports. A focused discussion paper on infrastructure security would be a welcome addition to the stable.
That would allow policymakers to identify where New Zealand’s priorities lie. Is our cyber security up to scratch? Do we have enough redundancy built into the system? How effectively do our public and private sectors communicate? Does our energy system have the capacity to scale up when needs must?
Having clear answers to these questions would help New Zealand protect some of its most valuable and strategically important assets.
After all, if we don’t ensure that our kit is in good nick today, then we will have to pay more to maintain it tomorrow. And we may well miss our train.
All it takes is two cables.
- Dr Matthew Birchall is a research fellow at The New Zealand Initiative.
