Analysis by Keith Rankin.
Last week the new government effectively cancelled the plans of Kiwi Rail – in the form of ‘The Interislander’ – derailing its intended Picton rail and road expansion. The plans were judged to be too costly; in particular, the rate of cost escalation was deemed unacceptable.
The bigger picture is the need to balance acquisition costs and benefits against subsequent operational costs and benefits. Spending more upfront can mean much lower costs in the long run.
We can look to the past for guidance. Before the 1960s, the principal shipping route between New Zealand’s North and South Islands was between Wellington and Christchurch; more specifically between Wellington and the port town of Lyttelton.
The development of the Wellington to Picton route for a rail ferry was made possible by the completion of the Christchurch to Picton rail line in 1945. That was a borderline rail decades-long project which might never have been completed at all. The second impetus towards the improvement of the Picton route was the diminishing state of the then-existing Union Steam Ship ferry service to Picton, and its inability to service the rapidly increasing demand for road vehicle carriage to Nelson, Marlborough, and Westland. Then, by the 1970s, people wanting quick access to Christchurch were flying, and renting cars. Further, with the loss of the Wahine in 1968, the convenience of the Lyttelton ferry service waned substantially. The Wahine’s replacement – the Rangatira – was a great ship but it had a backward-looking economic profile. And it was not owned by New Zealand Rail, as Kiwi Rail was then. New Zealand Rail in 1970 had too much sunk investment in Picton. It is now, in the 2020s, that that investment has substantially depreciated.
In November 2016 the Picton service was severely compromised by the Kaikoura Earthquake. Massive fixes were required to both the rail and road routes from Picton to Christchurch. 2017 was an obvious time to look at rekindling the Lyttelton ferry service, but for some inexplicable reason there was no discussion of that option. The Interisland rail service was curtailed, and the increased car and truck traffic had to take an alpine route, over Lewis Pass. Subsequently, in 2022, road access to Nelson – and to the Lewis Pass – was knocked out by severe flooding and road subsidence. ‘Fortunately’, the rebuilt coastal route to Christchurch had been opened in time. Despite this new emergency, the word ‘Lyttleton’ was still not mentioned.
New Zealand means New Sealand. Early in 2023 there was a brief swell of interest in coastal shipping, following the wave of floods most affecting the North Island’s Tairawhiti (‘Eastland’). But again, once the one precarious road was eventually fixed, that emergency shipping service between Gisborne and Napier was immediately discontinued. It was an election year, and the political class was too obsessed with exploring the main political parties’ alleged ‘fiscal holes’ to contemplate some forward-looking climate-savvy inter-regional transport infrastructure.
Yet, for the latest episode of New Sealand’s saga of threadbare-shipping, too much attention has gone onto the proposed new ships, which really are too big for the Picton ‘scenic route’, and too little attention to the main cost, the replacement of port infrastructure.
So, here’s what I think. Divert the proposed port infrastructure from touristic Picton to the commercial deepwater port of Lyttleton. Build the two modern rail-road ferries, as planned, in South Korea. Require KiwiSaver to switch its principal rail-ferry operations to Lyttleton; allowing Picton to be serviced by smaller roll-on roll-off ferries, with rail-free Nelson the main centre to be serviced through Picton. This is the perfect opportunity to revive the Wellington-Christchurch ferry service.
We particularly note that the 2020s is the critical decade to deal with the matter of climate change, in this century of COPs. (Actually, the 2010s was that critical decade; but it’s been and gone!) Although modern ships use a fossil fuel, oil, shipping remains the most resilient and sustainable form of long-distance freight transport; and especially when the alternative is road-rail transport along a rugged seismically active coast.
Other Shipping News
The COP28 narrative, this year, boiled down to whether there should be a ‘phase-down’ of (ie ‘transition away from’) fossil fuels (coal, oil, gas) or a ‘phase-out’ of such fuels. For the distinction to be meaningful, a phase-out means the eventual complete disuse of these fuels. Yet I heard nothing in the reporting of COP28 about what a complete disuse of fossil fuels would mean for the shipping industry. I found this rhetorical gap especially bemusing, in the light of the dependence of the small island nations on sea-freight; indeed these were some of the nation states most vociferous at COP28 in favour of ‘phase-out’.
Traditionally, sea travel – indeed oceanic sea travel – was sustainable, in the sense that it was driven by wind power. Some sailing ships, windjammers carrying freight, were still plying the Southern Ocean as recently as the mid-twentieth century. The Pamir’s final voyage on the great circle route, via Cape Horn, sailing under the New Zealand red ensign, was in 1949.
While it seems unlikely that wind-only shipping will again play a role in world shipping this century, I see no reason why hybrid shipping cannot be developed for certain routes, with the ‘great circle route’ via the Capes of Good Hope and Horn being an obvious such route. High-tech wind power can be allowed to make a contribution to a more sustainable goods’ carriage model. Yet, if such practical solutions are being discussed in COP circles, such chatter is not being picked up by the mainstream media.
What other alternatives fossil fuels can be used by ships? The only one that comes to my mind is nuclear power. In the absence of narratives around ships utilising wind power, a phasing out of fossil fuels in shipping can only mean a phasing in of nuclear power; a means of propulsion principally confined at present to military shipping. I am not convinced that Aotearoans would be partial to such a phase out of fossil fuels. (And we note that nuclear power can hardly be applicable to air transport, another industry for which a phase out of fossil fuels will be difficult.)
The Militarisation of the Indian Ocean
While militarised for some time now, the 2021 ‘Indo-Pacific’ ‘rules-based’ rhetoric of Biden and Blinken and Ardern, was a hint that the Indian Ocean was an escalating military region. AUKUS took this a step further in 2022. Now, in 2023, we see that there will be a large United States’ nuclear submarine base (ABC News, 18 Dec 2023) just south of Fremantle, in Western Australia.
And now, with actual conflict in the Red Sea, related to Israel’s present war, we are heading for an effective closure of the Suez Canal; previously closed between 1967 and 1975 due to the second and third wars between Israel and Egypt. (The first Israel-Egypt War in modern times was in 1956, when the first massacre of Khan Younis took place.) Neither military expansion nor the closure of major shipping routes are conducive to the reduction of the greenhouse gas emissions which are substantially causing climate change. Indeed ‘defence’ is probably both the least-green and least-productive sector of the global economy. Oil-powered oil-tankers are already having to get from the Persian Gulf to the North Atlantic Ocean via South Africa. (I wonder if we will ever see the ultimate shipping irony: nuclear-powered oil tankers!?)
Climate Change feedback ‘Arms Race’
It’s not only the Suez Canal which is compromised at present. The Panama rainforest is experiencing a drought, meaning that the undercapacity (at the best of times) Panama Canal is unable to access anything like the amounts of water that it needs to operate its locks. It means evermore traffic having to go around Cape Horn, at the tip of South America; though these canal troubles may help to precipitate energy saving on the wind-friendly great-circle route.
The woes of the Panama Canal are reflected more generally in that climate change is creating more demand for energy intensive climate control; air-conditioning for the heat and heating for the cold, climate extremes that are creating extra demands right now for coal to burn to generate electricity. This ‘arms race’ phenomenon is known as a positive feedback loop; the kind of positive feedback that is very adverse for the sustenance of Planet Earth in its present human-friendly. Indeed increased demand means the transition away from fossil fuels may end up being that fossil fuel use continues to stay much the same, despite increases in renewable and nuclear energisation.
Geoplanetary feedback loops can be quirky though. Just as the Panama Canal route faces contraction of service – as does the Picton route – two new opportunities are opening up as a result of global warming. The Northwest Passage, north of Canada, may soon be available to take the pressure off the Panama Canal (at least for a few months each year). And, especially for trade between China and Russia – an important factor in global emissions – the Arctic Northeast Passage may become similarly viable.
A nuclear Arctic, anyone? Maybe Canada or Russia will ban non-nuclear ships, for the sake of Planet E.
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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.
