Story: Energy supply and use
Page 3 – Oil consumption
After the late 1950s oil supplied more of New Zealand’s energy than any other source. The first big jump in use was between 1944 and 1954: consumption went from 30 petajoules each year to 59 petajoules (a petajoule is equal to 278 gigawatt hours of electricity). By 1974, 201 petajoules were used, and by 2007 it reached 283.5 petajoules per year.
Driving the mid-20th century shift in energy sources was the increasing price of coal – industry and transport moved to oil. Increasing use of road transport also pushed up oil use.
Once refined, oil becomes many different products, including petrol, diesel and kerosene. Now used as aviation fuel, kerosene was widely used to light homes and workplaces, and sometimes for cooking and heating, in the late 19th and early 20th centuries. In some areas it continued to be used by households until the 1960s.
Farms, power stations, industrial sites, construction sites and households all used oil, but transport used the greatest proportion. In 2005 oil was used by:
- transport – 84%
- industry – 6.7%
- agriculture – 4.9%
- the commercial sector – 3.5%
- the residential sector – 0.9%.
Yearly use of oil per person was about 1,570 litres, or 10 barrels in the early 2000s.
In the early 2000s New Zealand had four large oil companies: Mobil (started in 1896), Shell (1912), Caltex (1922) and BP (1946). All four had parent companies overseas.
There have been a number of smaller companies, including Europa, a discount supplier for several decades, heavily reliant on government protection – it was absorbed by BP in 1972. Another discount supplier, Gull, entered the New Zealand market in 1998 and was active in the North Island in 2009.
Lead in petrol
Early engines ‘knocked’ when cylinders detonated early. A lead additive in petrol was first introduced in 1933 to reduce knocking and improve fuel and engine efficiency. The lead was also highly poisonous; even low levels had an impact on human health. The additive was finally withdrawn from use in 1996.
Oil imports and refining
Oil importing began in the 1860s, and by 1890 had reached 5 million litres per annum. Most oil imported before the First World War was in the form of kerosene.
Petrol (known as benzine in the early 20th century) was imported in a refined form until the mid-1960s. The government built an oil refinery at Marsden Point, Whāngārei, in 1964, and crude oil imports began. The refinery supplied 67% of New Zealand’s fuel oil in 2007 – 15 to 20 tankers arrived in New Zealand ports each month, carrying oil for the Marsden Point refinery, crude oil and some refined products. Crude oil came from the Middle East (50–60%), and Asia or Australia (30–40%). Most refined oil came from Singapore and Australia. The remainder was locally produced.
Until the 1970s there was very little locally sourced oil. After that it was produced in significant quantities, but its high quality meant producers made more money exporting it. Oil imported for domestic use was lower-grade and cheaper.
LPG has no smell of its own and returns to gas form if it leaks. To avoid the danger of unnoticed leaks, the smell of rotten cabbage is added during LPG manufacture.
Liquid petroleum gas (LPG) is another form of oil energy. Produced in on- and offshore gas fields in Taranaki, LPG is a gas that becomes a liquid when compressed. Almost 180,000 tonnes of LPG were used in 2008 for heating, water heating, and cooking in homes and businesses. Approximately 10,000 cars were using LPG as a petrol substitute.