Last week, Federal Energy Minister Josh Frydenberg announced a review into our liquid security.
This comes in the wake of the Syria strikes.
The international Energy Agency expects countries to keep a 90-day supply — Australia has just under 50 days.
With Fairfax media reporting that we have only a 22-day supply of crude oil, 59 days worth of LPG, 20 days of petrol, 19 days of aviation fuel and 21 days of diesel.
Australia has lost its fuel refining industry, with many shutting down in 2003 and 2011. Australia is no longer able to refine fuel from crude oil.
Currently, we depend on imports for most of our fuel needs. Over 90% of all our transport fuels are being imported by regional refineries and oil flows from the Middle East.
According to experts this seems unlikely to change, with no plan B in the event of a fuel supply interruption.
In a statement, Frydenberd states that:
‘Australia’s liquid fuel supply increasingly depends on overseas sources and relies son markets forces to maintain reliability and affordability.’
Here’s the problem, we can’t store crude oil and just refine it when needed. We have to purchase and store refined products. Refined products are inherently less stable, and more expensive to store.
Liberal senator Jim Molan says it’s now time to ‘see action’, after sticking to a business as usual approach that clearly isn’t working.
‘The way that we seem to get around this is that we buy credits overseas which ignores the entire problem.’
Australia’s imports continue to outweigh exports
And we have seen this before — in the loss of Australia’s car manufacturing.
It’s all part of the same trend! Another Australian industry dying and going overseas because of this, business as usual no action approach.
It is a policy failure to allow that to happen.
And now in a statement from Molan, the cars we import are ironically at risk of becoming un-runnable.
‘It would be difficult to keep Australian vehicles going should there be conflict in the Middle East, Korea, or elsewhere in our neighbourhood’ he said.
While Australia has committed to have certain fuel reserves, we don’t have anybody in place to see that it happens. No agency, public or private.
It’s another policy failure. Failure to plan, or even think about it.
According to the Director of the Centre for Energy and Natural Resources Law at Deakin University, Samantha Hepburn:
‘Australia is the only import-dependent country in the IEA that has not imposed any stockholding obligation and which has no current bilateral obligation to stockpile in another country.
‘This makes us highly vulnerable to international disruptions.
‘These might include political instability and air strikes in OPEC countries, or transit difficulties in established routes such as the Straits of Hormuz and the Strait of Malacca — the latter a known target for offshore terrorism.’
Frankly, it’s time Australians saw action. Especially when it comes to keeping Aussie industries viable for generations to come.
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