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National Security Starts With Fuel Security

May 27, 2020

Australia must shore up its fuel security and fast track its domestic storage and refining capacity, says the Australian Workers’ Union.

In a submission to the Federal Government, the AWU warns that another global crisis could leave Australia stranded due to its over reliance on imported oil and lack of fuel reserves. The AWU has called on a national plan for fuel security that involves significant upgrades to existing refineries, fuel storage facilities and national stockpiles.

The report highlights that Australia’s fuel stockpile is perilously low and our refining capacity has been significantly diminished in recent years.

“COVID-19 has demonstrated how quickly global supply chains can collapse. We were lucky this time, but next time could prove disastrous to our economy. Who knows where the next disruption will be? It’s time we took this seriously. Next time it might not be masks that we can’t get.

According to the AWU, fuel security is critical to national security – and any nation that cannot fuel itself, cannot feed, medicate or defend itself in a crisis.

“We have just 18 days-worth of fuel to power our cars and move food and critical supplies across the country and less than a month’s worth of crude oil – figures which should worry us all. Our entire economy and our national defence hinges on our fuel security. Only having a few weeks on hand is simply not good enough” said Daniel Walton, National Secretary of the AWU.

“A national oil reserve with increased refining capacity would reduce on reliance on overseas imports as well as creating thousands of new jobs. This could prove pivotal in rebuilding Australia’s post-pandemic recovery.”

The report notes that Australia is a member of the International Energy Agency (IEA) and has an obligation to maintain stocks equivalent to 90 days of our annual net imports.  But, currently, its stockpile sits as low as 28 days. The closure of several refineries over the past 10 years including Port Stanvac in 2009, Clyde in 2013, Kurnell in 2014 and Bulwer in 2015 have also hampered any efforts to increase its stockpile as domestic production has collapsed.

The recent deal announced by Federal Energy Minister Angus Taylor to access the US oil reserve, while welcome, is also not the answer to securing and shoring up Australia’s fuel security – with the report noting that it would take 40 days for oil from the US to reach our shores.

The report says: “It is important the Australian Government develop a policy program that expands our infrastructure capacity to retain enough domestic reserves to comply with IEA guidelines. The collapse in the global price for oil places an additional pressure on Australia’s domestic refining fleet and thus it is more critical than ever for a coordinated policy response. Low prices may also present opportunities for Australia to secure its domestic needs, though it is critical that any storage capacity is retained in Australia’s sovereign territory.”

The AWU has been actively lobbying governments at all levels for investment into and expansion of Australia’s refineries and will continue the charge on this.

Protecting Australia’s existing refineries from closure is of paramount importance with the report noting that the proposed, but now delayed sale of Caltex to Couche-Tard, could lead to the closure of the Caltex Lytton refinery, especially if that sale has no conditions placed upon it by the government.

Any further refinery closures would lead to hundreds of job losses, impact on the already fragile east coast economy and further increase Australia’s reliance on imported oil – a prospect that is completely untenable in the wake of COVID-19.

The AWU says the any sale of an Australian refinery to a foreign bidder must be rejected as a matter of national interest.

You can read the full submission to the Inquiry into Australia’s Oil and Gas Reserves here.

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