Fuel security vital for our island nation

Published on Wed 16 June 2021 10:18am

At the moment, people go to the supermarket and the shelves are stocked and they go to the petrol station and they fill up their cars. Or if they’re fortunate enough to be able to travel from one part of Australia to the other, they go to the airport without really thinking that if there was to be an interruption to our fuel supply, that all of that would grind to a terrible halt in very, very, very quick time. And it would affect everything – the economic and social impacts of that would be hard to anticipate. And the risks of that occurring are not small.

Thank you Deputy Speaker. And I’m glad to speak on the government’s bill, and particularly to support the second reading amendment that’s been moved by the Shadow Minister. There’s no doubt that fuel security is a critical issue. In fact, it’s what I describe as a serious security issue – we do have in public debate, and in the parliament, and from a government, a lot of noise, about security issues from time to time that, frankly, I think are much lower down the scale or down the totem pole when it comes to meaningful security, than fuel security. And it’s such a shame that we don’t focus on areas like this more often. If we’ve learned anything through the last year and a half it is that it’s areas like energy self-sufficiency, energy resilience, health resilience, climate resilience, those are really the kinds of serious risks to our economic, social and health well-being that we need to think about a lot more than we do. And that the sort of the beating of the drums in some other areas, I think are disproportionate to the risks that something like fuel security presents to us.

Most Australians would have little sense of the fragile position that we are in when it comes to fuel security. And it’s easy enough to give some examples of the circumstances that we’re dealing with. I mean the bottom line is that, in the data from 2019, consumption cover in Australia was only equivalent to 18 days of petrol, 22 days of diesel, and 23 days of jet fuel. So, it’s somewhere between two and three weeks of coverage.

At the moment, people go to the supermarket and the shelves are stocked and they go to the petrol station and they fill up their cars. Or if they’re fortunate enough to be able to travel from one part of Australia to the other, they go to the airport without really thinking that if there was to be an interruption to our fuel supply, that all of that would grind to a terrible halt in very, very, very quick time. And it would affect everything – the economic and social impacts of that would be hard to anticipate. And the risks of that occurring are not small.

We are an island nation. We are a significant fuel importer, we were entirely reliant, not entirely, but we are predominantly reliant on fuel imports. And if there was to be some interruption of supply, because of events in the Middle East, or because of events in the South China Sea, we would find ourselves running out of fuel very, very quickly. And fuel is essential to everything. So, the risk of that kind of ‘Black Swan’ event is not is not high, but the impacts of such an event are massive. And the fact that we have done nothing to really address that vulnerability and that fragility is hard to understand.

We fell out of compliance with the IEA [International Energy Agency] in 2012. Now, after the oil shocks that occurred in the 1970s, sensible countries joined together and said ‘Let’s avoid that happening. Let’s make some shared commitments to liquid fuel resilience’ and the kind of the easiest measure of which is 90 days of courage.

Australia fell out of compliance in 2012. And we are now somewhere 55, 56 days out of the 90 days that we should have. There are no other countries that are currently not compliant. I think in that period of time between 2012 and now there have been a couple of nations that have fallen out of compliance by a few days for a few days. I think Luxembourg is one of them, literally going from 90 days to 88 days for a week or something. We’ve been mired down in in the 50s for a long time, and we’ve not improved that position. To the extent that we’ve gone from the low 50s to the mid-50s, it’s because the government has settled arrangements with other countries to spend millions of dollars purchasing oil tickets, which essentially mean that we can make a call on oil reserves in other countries. That’s not really to deal with an oil crisis or liquid fuel crisis in this country – that will just release supply into the market that would in a sense, meet our obligations under the IEA. But nothing significantly has occurred to address that problem and even though these bills put in place some measures that are that are helpful, they do come very late.

I mean, the measure around oil refined refineries. It wasn’t that long ago that Australia had seven world refineries. It wasn’t that long ago, literally 18 months ago, we had four refineries. Now we have two refineries. So, the government has decided to come along and apply $2 billion, 2,000 million dollars of taxpayers’ funds, to underwrite the last two refineries.

Unfortunately, the refinery in Western Australia, the largest, has gone under. It’s also salient as we as we have this debate at that kind of national level to remember that, unlike most other countries, I mean, Australia is a continental landmass with capital cities, obviously, with six states and the two territories and capital cities distributed across a huge area. And so the position that Western Australia now finds itself in, we might talk about 55 days of liquid fuel coverage for the nation as a whole. It would be interesting to see what that breakdown is state by state, because I tell you what, if there comes a crisis, what happens in Western Australia, or in other parts, more distributed parts of the country that have a liquid fuel crisis? They’re going to need to get liquid fuel from other parts of Australia. How are they going to get that?

The only way to really move it is by ship. Australia doesn’t have a single fuel tanker. I mean, you think of all of the kinds of security that we should be focused on in this country, and the way that they’ve been either allowed to deteriorate or in the case of shipping, actively run down. The Coalition – in its current guise and in the government before that, the Howard government – took an ideological dislike to maritime workers and to Australian shipping because of its working foundation, which is the Maritime Union of Australia and the labour movement. And as a result, we’ve now got about 10 flagged ships and we don’t have a fuel tanker.

We’re a continental landmass. We’re an island nation that is entirely reliant on fuel being shipped here. If there was a crisis that put that in jeopardy, we don’t even have the vessel that could transport the fuel to this nation. And we’ve seen through COVID, I mean, the government went and did deals in relation to vaccines that were contractual arrangements. A lot of confidence was put in those arrangements, but when there was a need for vaccines that we supposedly had a contractual call on from Europe, did they actually turn up here? No, they didn’t, because those countries held on to the vaccine.

And I’ll tell you what, if there was an international oil crisis, do you think other countries are going to be in a big hurry to send liquid fuel reserves here? Do you think they’re going to be in a big hurry to free up their own Merchant Marine to transport scarce fuel to Australia? You can imagine how that conversation is going to go. So, this government’s known for some time about the scale of the problem.

We are extraordinarily vulnerable in Australia. There is no other country that’s in the same kind of parlous situation that we are in. We are an island nation. We now have only two refineries. The problem with that is that refined fuel has a shorter shelf life so our ability to bring in crude, hold it and refine it as we sort of need is now decreased. We have the third highest per capita ownership of personal motor vehicles in the world; we have done an abysmal job, an appalling job of shifting towards electric vehicles which the rest of the world is doing. We have 1/7 the uptake of electric vehicles as countries, car loving countries like Canada and the United States. Our mining and agricultural sectors are 90% reliant on diesel fuels.

So you think about the Australian economy – and you’ll hear from those opposite how we are dependent upon and we benefit from mining and resources and from agriculture, which is undoubtedly true – they are 90% reliant on diesel fuel.

So, if we had a shock, we’ve got about three weeks-worth of diesel cover, if there was a shock that prevented diesel coming to Australia, can you imagine what would happen to those industries?

Our transport is 99% reliant on liquid fuels, partly because we’ve made virtually zero progress in terms of the energy resilience that you get by moving towards the electrification of transport, and all those other countries aren’t doing that for fun. They’re not doing that because it’s a woke manoeuvre or whatever it would be criticised as being by those opposite, they’re doing it because it’s smart, because it improves your security.

One of the leaders of energy self-sufficiency in the United States is US Defence. Why are they doing that? Because they know how risky it is to be so reliant on liquid fuels, so they actually have within Defence, within the various different parts – Marine, Army Navy – they actually have a part of their budget that goes to new energy innovation, because they know that they want Defence, as well as every other critical part of their nation’s operations, to be free from the vulnerability that comes with massive reliance on liquid fuels.

But what’s Australia doing? I mean, we have campaigns from those opposite, when we talk about making a modest change towards greater electrification, they decide to run a scare campaign about people not having their utes anymore. I mean, it is just ridiculous. It makes us incredibly vulnerable to future shocks and to ‘Black Swan’ events in a way that no other country on earth is. And if it happens, I’ll be really fascinated to see how those opposite reflect on what they haven’t done in the eight years that they’ve been in government.

Our Defence department does have an energy related strategy, I think it’s called the Defence Estate Energy Strategy. The last one ran from 2015 to 2019. We don’t have another one. So that strategy – look it up, get the PDF, it’s not a very impressive piece of work, because it doesn’t have many commitments to using Defence as a way of pioneering energy innovation, but it existed, it at least identified a couple of things. It covered the period 2015 to 2019. I’ve been looking, as someone who has an interest in in liquid fuel security, for the next version of that, presumably the 2020 to 2024 version. It doesn’t exist, it doesn’t exist.

The US Navy has a project that’s looking to make the Navy shift towards things like hydrogen, we actually piggyback off that. So, we have been a participant in that US-led project. I think that the Australian Army put a little bit of money into some off-grid energy sources that it could use in certain circumstances. That’s about the scale of it, virtually nothing in transport. Why is that? Why is the US doing it? We’re not because it’s too woke. Imagine if Defence, God forbid, imagine if Defence was looking at energy resilience, that will be too woke, you know, Defence would have gone green, probably get the minister up here, telling them that in addition to having certain kinds of morning teas, they have to abandon any efforts to make Australia’s security in a better, appropriate 21st century shape by investing in energy resilience, self-sufficiency, and a shift away from liquid fuels.

What the government is doing now is very little and very late. It received the Interim Report of the liquid fuel security review in May 2019, or the interim one was issued in May 2019.

It received some further submissions, it closed, as I understand, it was provided to the Minister towards the end of that year, we still haven’t seen that. It just follows the pattern with this government that it doesn’t want to listen. It doesn’t want to focus on the real issues. It wants to play political games. It wants to spend $55 million updating Christmas Island, it wants to spend $6 million $7 million keeping one Sri Lankan family on Christmas Island. ‘These are the security issues, right? Like our security is at risk Australia, we’ve got this Sri Lankan family that we need to spend more than $60 million keeping incarcerated until their youngest daughter is gravely ill. That’s how we’re going to be strong and secure in this country. That’s what we’re going to do. That’s brilliant.’

Meanwhile, we’ve been out of compliance with our IEA for eight years, we are the most liquid fuel vulnerable nation on Earth. And this government has done nothing, nothing about it until – what finally prompts them, it’s a bit like it’s the sort of fuel security equivalent of that poor little girl. We go from four refineries to two refineries, and ‘Oh, we better do something. You know what we’re going to do – $2 billion from the taxpayers’ purse to keep those other remaining commercial refineries going.’

Investment in electrification, investment in storage, shipping, Australian shipping, doing something about Australian shipping, making sure that we actually have, as an island continent, the ability to get things to and from here, don’t worry about that. Don’t worry about that. Beat the drums of war. Talk about China. Lock up young families until they’re almost dead. That’s how we’ll deal with security under this government while these serious issues get ignored.

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