First, the letter to Invercargill City Council (Google docs version for your use here), below that the letter to Southland District Council (Google docs version for your use here). I also wrote previously to Environment Southland, the regional council, and have forwarded them these emails. Write your own letters, feel free to use mine as a basis, but contact your representatives today!
Global Energy Crisis Response:
Schema Consulting Letter to Invercargill City Council
13 April 2026
To: Mayor Tom Campbell, Deputy Mayor, Councillors
tom.campbell@icc.govt.nz, steve.broad@icc.govt.nz, alex.crackett@icc.govt.nz, marcus.lush@icc.govt.nz, grant.dermody@icc.govt.nz, trish.boyle@icc.govt.nz, ria.bond@icc.govt.nz, darren.ludlow@icc.govt.nz, ian.pottinger@icc.govt.nz, allan.arnold@icc.govt.nz, andrea.devries@icc.govt.nz, lisa.tou-mcnoughton@icc.govt.nz, barry.stewart@icc.govt.nz
cc: Chief Executive Michael Day
michael.day@icc.govt.nz Governance@icc.govt.nz
From: Nathan Surendran, Principal Consultant, Schema Consulting Ltd; Chairperson, Wise Response Society
re: Energy crisis preparedness - council operations, community resilience, and financial risk
Mayor Campbell, Deputy Mayor, Councillors,
My name is Nathan Surendran. I am a mechanical and energy systems engineer based in Invercargill, Principal Consultant at Schema Consulting Ltd, and Chairperson of the Wise Response Society. I have made formal submissions to Southland councils on energy security since arriving here in 2010, and specifically warned of the Strait of Hormuz scenario in my 2025 submission to Parliament’s Finance and Expenditure Committee. I have also been writing articles urging for a war footing type response in response to the severity of probable impacts apparent since the start of this crisis, and have stated a couple of weeks ago that “If I were making this call today, I’d be ring-fencing diesel for domestic food production now: arable crops, vegetables, the minimum livestock operations for domestic meat and dairy, and the transport to get it to market. Winter crop planting decisions are being made right now.” Yesterday I published a follow up piece: Hoping the Ship Arrives Isn’t a Strategy.
I am writing to ask Council to take specific actions in response to what the International Energy Agency has called the greatest threat to global energy security in history with a combined loss of approximately 20% of global oil supply (actually around 40% of traded oil) and 20% of LNG.
When I examine the reasons people aren’t more concerned about what’s occurring, it is clear that the prevailing sentiment from decision makers seems to be a category error which I described in my recent energy white paper thus: “The global economy is not a financial system that happens to use energy. It is an energy system that happens to use money.” I urge you to consider the biophysical economics perspective and the analysis from heterodox economist Steve Keen who argues that the mainstream economic myth of perfect competition, which incorrectly assumes an infinite number of replaceable suppliers and ignores critical physical interdependencies and time constraints, has led to a dangerous complacency regarding the fragility of global supply chains (more from Steve on the role of energy in production here).
The technical and research basis, and more detailed summary recommended actions are in the supporting white paper, No Fuel, Still Fed: A Regional Food and Water Security Framework for the 2026 Energy Crisis (Schema Consulting Ltd, April 2026). This letter focuses on what is specific to Invercargill City Council, and is simply a starting point for urgent conversation, not a list of demands.
The situation in brief
The government’s four-phase fuel plan exists as a framework but still lacks the quantified allocation detail needed to implement it under pressure. Refinery run rates at NZ’s supply sources in Singapore and South Korea remain reduced and the last tankers from pre-closure of the Strait of Hormuz have only recently arrived in those countries. France’s Finance Minister has confirmed 30-40% of Gulf refining capacity was damaged or destroyed, with restoration timelines of up to three years. This is a long term global energy shortage and crisis situation, not a temporary fuel price spike and COVID like logistics disruption. We can expect shortages and potentially outright unavailability of fuel first, then food and manufactured goods over the coming months and years. Even with full tanks, NZ has maybe a month or two of diesel physically onshore.
The government is now in Phase 2. Errata: Clearly wishful thinking on my part: The government is now in Phase 1 - voluntary conservation messaging. The triggers for Phase 2 were crossed weeks ago. Councils cannot afford to wait for Phase 3 or 4 to initiate their own actions.
Council’s operational exposure
Invercargill City Council’s fuel-dependent operations fall into three categories.
Cannot be interrupted. Water supply and treatment at Branxholme is the first priority. Any failure of pump stations, chemical deliveries, or maintenance response capability becomes a public health emergency within days. Wastewater and stormwater management - particularly the Clifton pump stations - falls in the same category, especially heading into winter. These operations need assessed fuel requirements, backup plans, and priority status in any rationing framework. They are not currently quantified in the National Fuel Plan’s critical customer categories.
Can be adapted but not stopped. Solid waste collection can move to fortnightly without significant harm. Kerbside frequency reduction frees meaningful diesel volumes. Roading safety maintenance - pothole repair, drainage, gritting - must continue through winter but major resurfacing and capital works programmes can be deferred or paused.
Should be paused or deferred immediately. Discretionary capital works are significant diesel consumers through heavy machinery and materials transport. In a contracting fuel environment, pausing these frees resources for essential operations and signals to the community that Council is responding seriously. Building inspection services can shift to risk-based prioritisation, as was done during COVID.
What Council doesn’t control but should understand. Invercargill is the regional service hub. Supermarkets and food distributors depend on daily truck deliveries from Christchurch and further afield. If those supply chains fail, the city faces food shortages within days. Council cannot fix this alone, but it can convene the conversation and map what local food supply options exist. The attached white paper addresses this directly.
Financial exposure
This section addresses a risk that most councils have not yet modelled.
Council’s debt is primarily LGFA-financed. LGFA covenants assume rates revenue stability, ongoing insurance coverage, and asset values. All three are at risk in a prolonged fuel crisis. If ratepayer incomes fall, rates arrears rise. If insurance markets tighten under catastrophic infrastructure losses globally, premiums spike or cover narrows. If property values contract, the rating base shrinks. Capital programmes committed under different assumptions may become undeliverable mid-stream.
The Local Government (Rating) Act 2002 (sections 85-91) gives Council explicit powers to remit, postpone, or defer rates. Most remission policies are written for individual hardship cases. Council should develop a systemic rates relief framework now, before it is needed under pressure. The framework should include the option for community service contributions in lieu of rates - not as standard practice, but as a policy option ready to activate.
Council should also engage LGFA proactively with a realistic financial stress scenario. Those that do so before a credit review is forced on them are in a materially better position.
Finally, the attached white paper includes a section on alternative economic exchange arrangements - including the historical precedent of council-backed demurrage scrip, which has been used successfully to maintain local economic activity during financial crises. This is contingency thinking, not immediate action. But it deserves consideration and preparation at a governance level. By creating scrip currency and accepting it for rates payments, councils can create a medium of exchange that allows farm produce to be paid for outside of a primary financial system, which will probably be a system in crisis.
Requests
I ask that this letter and the attached white paper be tabled at the next full Council meeting and that a written response be provided within 7 days from that meeting indicating Council’s position on the following (I recognise some of this may already be happening):
Operational triage: Whether Council has assessed its fuel-dependent operations and categorised them by criticality, with diesel volume estimates for minimum viable operation at 20% of normal supply.
Capital programme review: Whether Council will review its discretionary capital programme and pause or defer works that are not essential to life-critical service delivery.
Food and water resilience: Whether Council will convene a working group including food distributors, Southland DHB/Health NZ, and Civil Defence to map food supply vulnerabilities and accelerate household rainwater storage uptake in the city.
Financial preparedness: Whether Council will develop a systemic rates relief framework and engage LGFA with a formal financial stress scenario analysis.
Energy policy advocacy: Whether Council will formally advocate to central government for a quantified essential-use fuel allocation framework and investigation of Tradable Energy Quotas as a fair rationing mechanism.
Community preparedness communication: Whether Council will publish plain-language public guidance on what the four-phase fuel plan means for Invercargill residents, and what households can do now.
I am available to present to Council or its staff at any time and would welcome the opportunity.
Specifically I am requesting a public speaking slot at the next full council meeting to present / discuss this letter.
The situation is moving faster than official timelines suggest, and I believe we cannot easily overstate the magnitude of the impact these unfolding events are going to have on our community. Let’s take positive steps to ensure things are better than they otherwise will be!
Ngā mihi,
Nathan Surendran
Principal Consultant, Schema Consulting Ltd
Chairperson, Wise Response Society
Convenor, Electrify Southland
nathan@schema.nz | 021 209 6286
Attachments:
No Fuel, Still Fed: A Regional Food and Water Security Framework for the 2026 Energy Crisis (Schema Consulting Ltd, April 2026)
Global Energy Crisis Response:
Schema Consulting Letter to Southland District Council
13 April 2026
To: Mayor Rob Scott, Deputy Mayor Christine Menzies, Councillors
rob.scott@southlanddc.govt.nz, christine.menzies@southlanddc.govt.nz, sarah.greaney@southlanddc.govt.nz, matt.wilson@southlanddc.govt.nz, tom.obrien@southlanddc.govt.nz, jaspreet.boparai@southlanddc.govt.nz, don.byars@southlanddc.govt.nz, michael.weusten@southlanddc.govt.nz, brian.somerville@southlanddc.govt.nz, phil.dobson@southlanddc.govt.nz, paul.duffy@southlanddc.govt.nz, julie.keast@southlanddc.govt.nz, jon.spraggon@southlanddc.govt.nz
cc: Chief Executive Cameron McIntosh
Cameron.McIntosh@southlanddc.govt.nz
From: Nathan Surendran, Principal Consultant, Schema Consulting Ltd; Chairperson, Wise Response Society
re: Energy crisis preparedness - council operations, food and water security, and financial risk
Mayor Scott, Deputy Mayor Menzies, Councillors,
My name is Nathan Surendran. I am a mechanical and energy systems engineer based in Invercargill, Principal Consultant at Schema Consulting Ltd, and Chairperson of the Wise Response Society. I have made formal submissions to Southland councils on energy security since arriving here in 2010, and specifically warned of the Strait of Hormuz scenario in my 2025 submission to Parliament’s Finance and Expenditure Committee. I have also been writing articles urging for a war footing type response in response to the severity of probable impacts apparent since the start of this crisis, and have stated a couple of weeks ago that “If I were making this call today, I’d be ring-fencing diesel for domestic food production now: arable crops, vegetables, the minimum livestock operations for domestic meat and dairy, and the transport to get it to market. Winter crop planting decisions are being made right now.” Yesterday I published a follow up piece: Hoping the Ship Arrives Isn’t a Strategy.
I am writing to ask Council to take specific actions in response to what the International Energy Agency has called the greatest threat to global energy security in history with a combined loss of approximately 20% of global oil supply (actually around 40% of traded oil) and 20% of LNG.
When I examine the reasons people aren’t more concerned about what’s occurring, it is clear that the prevailing sentiment from decision makers seems to be a category error which I described in my recent energy white paper thus: “The global economy is not a financial system that happens to use energy. It is an energy system that happens to use money.” I urge you to consider the biophysical economics perspective and the analysis from heterodox economist Steve Keen who argues that the mainstream economic myth of perfect competition, which incorrectly assumes an infinite number of replaceable suppliers and ignores critical physical interdependencies and time constraints, has led to a dangerous complacency regarding the fragility of global supply chains (more from Steve on the role of energy in production here).
The technical and research basis, and more detailed summary recommended actions are in the supporting white paper, No Fuel, Still Fed: A Regional Food and Water Security Framework for the 2026 Energy Crisis (Schema Consulting Ltd, April 2026). This letter focuses on what is specific to Southland District Council, and is simply a starting point for urgent conversation, not a list of demands.
The situation in brief
The government’s four-phase fuel plan exists as a framework but still lacks the quantified allocation detail needed to implement it under pressure. Refinery run rates at NZ’s supply sources in Singapore and South Korea remain reduced and the last tankers from pre-closure of the Strait of Hormuz have only recently arrived in those countries. France’s Finance Minister has confirmed 30-40% of Gulf refining capacity was damaged or destroyed, with restoration timelines of up to three years. This is a long term global energy shortage and crisis situation, not a temporary fuel price spike and COVID like logistics disruption. We can expect shortages and potentially outright unavailability of fuel first, then food and manufactured goods over the coming months and years. Even with full tanks, NZ has maybe a month or two of diesel physically onshore.
The government is now in Phase 2. Errata: Clearly wishful thinking on my part: The government is now in Phase 1 - voluntary conservation messaging. The triggers for Phase 2 were crossed weeks ago. Councils cannot afford to wait for Phase 3 or 4 to initiate their own actions.
Council’s operational exposure
SDC’s operational profile is fundamentally different from urban councils. Geographic scale and distance are the defining constraints. Every service category involves significantly more diesel per unit of service than an urban equivalent.
Roading - the largest single exposure. SDC manages by far the largest roading network in Southland, predominantly unsealed rural roads requiring regular grading. The grading programme is continuous and diesel-intensive. At reduced fuel availability, the critical question is triage: which roads are essential to food production, livestock movement, school buses, and emergency access, and which can be deferred? This analysis needs to happen now, before it is forced under Phase 3 or 4 conditions. Every road in the district should be categorised as critical, important, or deferrable. Grading resources should be pre-positioned against the critical list.
Rural water schemes. SDC operates rural community water supply schemes across dozens of small communities. These schemes depend on pump stations, treatment, and maintenance access. Most are not part of urban reticulation and have limited redundancy. Chemical supply and spare parts for pump equipment should be audited and stockpiled now. The white paper’s recommendation on 12 months of water treatment chemical stocks applies directly to rural schemes as much as urban plants.
Stewart Island / Rakiura. This community is the district’s most exposed. All fuel, food, and essential supplies arrive by sea or air. A supply disruption that affects mainland New Zealand affects Stewart Island immediately and with no fallback. The fuel and food buffer on the island at any given time is minimal. Council should be mapping what the island’s minimum viable operating requirements are, communicating that clearly to central government, and establishing contingency supply arrangements now.
Community facilities and staff across a vast geography. Service delivery distances in SDC are extraordinary. Every staff visit, every contractor call-out, every materials delivery involves fuel costs that urban councils do not face at equivalent scale. The efficiency case for digital-first service delivery, pre-positioned materials, and reduced non-essential travel is particularly strong for SDC.
Fuel-dependent operations fall into three categories:
Cannot be interrupted. Water supply and treatment at Branxholme is the first priority. Any failure of pump stations, chemical deliveries, or maintenance response capability becomes a public health emergency within days. Wastewater and stormwater management - particularly the Clifton pump stations - falls in the same category, especially heading into winter. These operations need assessed fuel requirements, backup plans, and priority status in any rationing framework. They are not currently quantified in the National Fuel Plan’s critical customer categories.
Can be adapted but not stopped. Solid waste collection can move to fortnightly without significant harm. Kerbside frequency reduction frees meaningful diesel volumes. Roading safety maintenance - pothole repair, drainage, gritting - must continue through winter but major resurfacing and capital works programmes can be deferred or paused.
Should be paused or deferred immediately. Discretionary capital works are significant diesel consumers through heavy machinery and materials transport. In a contracting fuel environment, pausing these frees resources for essential operations and signals to the community that Council is responding seriously. Building inspection services can shift to risk-based prioritisation, as was done during COVID.
What Council doesn’t control but should understand. Invercargill is the regional service hub. Supermarkets and food distributors depend on daily truck deliveries from Christchurch and further afield. If those supply chains fail, the city faces food shortages within days. Council cannot fix this alone, but it can convene the conversation and map what local food supply options exist. The attached white paper addresses this directly.
The agricultural dimension
The SDC district produces a disproportionate share of New Zealand’s food. This is both an asset and a vulnerability.
The asset: Southland has the land, the infrastructure, and the farming knowledge to sustain regional food security through a prolonged crisis. The Boyd and Wilson research cited in the attached white paper identifies Southland as having better food production potential than most NZ regions under low-fuel conditions.
The vulnerability: almost all of that food production is export-oriented and enters processing chains that are not accessible to local residents without going through supermarket supply chains back from Christchurch and beyond. The irony that Southland produces food for the world while its own residents could face shortages is real and needs to be addressed at a planning level now.
Council should facilitate engagement between representatives from all sectors, and community representatives to explore whether local supply channels can be established for basic staples: direct-from-farm milk, mince, and vegetables for local distribution without requiring the full export processing chain. This does not require Council to manage a food system. It requires Council to convene the conversation and remove regulatory barriers where they exist.
The white paper also addresses the question of strategic livestock management - the case for planned, compensated destocking rather than chaotic forced culling - and the potential for community food production infrastructure (seed supply, greenhouse structures, arable coordination) that Southland is well-positioned to lead. These are district-level questions as much as individual farm decisions.
Financial exposure
This section addresses a risk that most councils have not yet modelled.
Council’s debt is primarily LGFA-financed. LGFA covenants assume rates revenue stability, ongoing insurance coverage, and asset values. All three are at risk in a prolonged fuel crisis. If ratepayer incomes fall, rates arrears rise. If insurance markets tighten under catastrophic infrastructure losses globally, premiums spike or cover narrows. If property values contract, the rating base shrinks. Capital programmes committed under different assumptions may become undeliverable mid-stream.
The Local Government (Rating) Act 2002 (sections 85-91) gives Council explicit powers to remit, postpone, or defer rates. Most remission policies are written for individual hardship cases. Council should develop a systemic rates relief framework now, before it is needed under pressure. The framework should include the option for community service contributions in lieu of rates - not as standard practice, but as a policy option ready to activate.
Council should also engage LGFA proactively with a realistic financial stress scenario. Those that do so before a credit review is forced on them are in a materially better position.
Finally, the attached white paper includes a section on alternative economic exchange arrangements - including the historical precedent of council-backed demurrage scrip, which has been used successfully to maintain local economic activity during financial crises. This is contingency thinking, not immediate action. But it deserves consideration and preparation at a governance level. By creating scrip currency and accepting it for rates payments, councils can create a medium of exchange that allows farm produce to be paid for outside of a primary financial system, which will probably be a system in crisis.
Requests
I ask that this letter and the attached white paper be tabled at the next full Council meeting and that a written response be provided within 30 days indicating Council’s position on the following:
Operational triage: Whether Council has categorised its roading network by criticality under a fuel rationing scenario, with diesel volume estimates for minimum viable maintenance of critical routes.
Rural water and Stewart Island: Whether Council has audited water treatment chemical and spare parts stocks across rural schemes, and whether Council has communicated Stewart Island’s minimum fuel and food requirements to central government.
Agricultural community engagement: Whether Council will convene a working group with commercial sector representatives, and community representatives to explore local food supply channels and coordinate district-level food security planning.
Financial preparedness: Whether Council will develop a systemic rates relief framework and review LGFA covenant obligations under insurance and asset value stress scenarios.
Energy policy advocacy: Whether Council will formally advocate to central government for a quantified essential-use fuel allocation framework and investigation of Tradable Energy Quotas as a fair rationing mechanism.
Community board activation: Whether Council will direct community boards to begin contingency planning for prolonged fuel shortage, with specific attention to local food production capacity, community water storage, and mutual aid networks in each area.
I am available to present to Council or its staff at any time and would welcome the opportunity.
Specifically I am requesting a public speaking slot at the next full council meeting to present / discuss this letter.
The situation is moving faster than official timelines suggest, and I believe we cannot easily overstate the magnitude of the impact these unfolding events are going to have on our community. Let’s take positive steps to ensure things are better than they otherwise will be!
Ngā mihi,
Nathan Surendran
Principal Consultant, Schema Consulting Ltd
Chairperson, Wise Response Society
Convenor, Electrify Southland
nathan@schema.nz | 021 209 6286
Attachments:
No Fuel, Still Fed: A Regional Food and Water Security Framework for the 2026 Energy Crisis (Schema Consulting Ltd, April 2026)
Hi Nathan, do you know of anyone who has adapted your letter and is using it to submit to local govt councils in metro Melbourne here in Australia? If so I would like to get in touch with them. Also, do you recall we were in a Slack group a few years back with Joseph Mertz? - and met on a call with Shaun too. You are doing great work and it has inspired me to want to put something together for my local area. I bet you see that all the years of preparation can only be put into practice now when a crisis of this level appears and then things that were dismissed or mocked might now be on the table? Or the expression, when the water is at our feet, there is not much we can do, but when it is up to our waist we can swim. something like that ;-)
Hi. When did nz govt go to phase2?
27march they said phase1.
😊