Labor has pledged to establish a national fuel reserve to address Australia’s depleted emergency stocks seven years after the country became a net importer of oil.
Bill Shorten says a Labor government would undertake a “detailed consultation process around the design of a government-owned national fuel reserve” to boost emergency reserves.
The International Energy Agency says countries should have 90 days’ worth of supply to withstand any disruption to the fuel supply chain.
But Australia dipped below that minimum in 2012, when the Sydney Kurnell refinery closed in the wake of the shutdown of the Clyde refinery a year previously. The closure of the Bulwer Island refinery in Queensland in 2014 completed the trifecta and saw Australia’s refinery capacity almost halve in just three years.
The Department of Environment and Energy’s latest report on fuel stocks, released in December, shows that on current consumption levels, Australia had 23 days of jet fuel supply, 22 days of diesel and 18 days of automobile fuel in reserve.
The department did not count “on water” barrels – fuel stock which is on its way to Australia – as part of the reserve, given supply issues which could arise in the event of conflict.
Shorten said not enough had been done to address warnings about Australia’s lack of fuel stocks.
“…If the fuel stopped coming, within 20 days, we would just grind to a halt – this is an important issue, not just for our economic independence, but fuel security is important for our national security,” he said in Perth.
“We want to, in the next 10 years, start building tank farms to make sure that we increase our reserves … We also want to start researching alternative fuels so we become less dependent on oil coming from other parts of the world.”
The resources minister, Matt Canavan, claimed the plan sounded “like a thought bubble” which lacked costings and questioned whether Labor planned to place a levy on petrol prices to pay for the new operation.
But Shorten said the cost of doing nothing would be far higher. “The reality is, we became a net importer of oil in 2012 and nothing has happened,” he said.
“If you want to start creating long-term fuel security for this nation, it has to start now. You are not going to remedy the problem overnight – it has taken us years to get to the position we are in. And what I am proposing to do is to start tackling the issue. I am putting fuel security as a national issue, a national political issue. It is not a partisan issue.
“… What Labor is doing is putting forward a proposition that says we should have a fuel security corporation and if the government says it costs too much, all I say to the government is this, ‘wait until we run out of fuel, that will cost a lot’.”
The loss of Australia’s refineries earlier in this decade has also led to a loss of storage tanks and now sees Australia export three-quarters of its crude oil production, with a 2013 report prepared for motoring body NRMA predicting the nation could be 100% reliant on imported fuel stock by 2030.
The government launched its own investigation into the nation’s fuel security under Malcolm Turnbull last year.
The energy minister said the outcome of that review would be released “in the coming weeks”.