Australia's fuel security risk

A new report released by the National Roads and Motorists’ Association (NRMA) has reviewed the transport energy policies of 75 countries and found that Australia is the only country that doesn’t have a ‘Plan B’ to cope with any significant interruption to our fuel imports.

The NRMA has released the report following the meeting of State Energy Ministers in Adelaide late last year. The report highlights that:

• Australia is the only developed oil/fuel importing country in the world that has no mandated industry fuel stockholdings, no government-owned stockholdings or government control over any part of the oil/fuel infrastructure in a world that the International Energy Agency (IEA) says faces a high risk of supply disruption which could have great economic consequences for IEA member countries.
• Australia is the only developed oil importing country that relies completely on commercial market forces for our transport energy security, which is no less perilous than contracting out our Defence Forces or outsourcing our food supply.
• A significant supply disruption to our shipping lanes or trade routes - which could take the form of a natural disaster, accident, commercial failure, act of terror or war - could quickly imperil Australia’s capacity to provide for essential, everyday services and our military forces.
• Australia’s dependency on crude oil and refined fuel imports for transport has grown from around 60% in 2000 to over 90% today and Australia’s oil refining capacity has reduced by 40% over the last 36 months.
• There is a concern about the security of Australia’s fuel supply in the event of disruptions to shipping lanes or our supply chain while Australia is critically exposed to any significant disruption in the supply of transport fuels.

NRMA Director Graham Blight said Australia needed to take urgent steps to secure Australia’s transport energy future.

“The then Defence Minister recently warned about growing security fears in the South China Sea, with any breakdown in security having catastrophic effects on the free flow of goods and services through the region,” Blight said.

“As the federal government breaks over summer, it’s the ideal time for politicians to have a rethink about our energy security and develop fresh policies to ensure Australia’s sustainability in the unlikely event of a disruption to our liquid fuel supply.

“We do not want to worry people with our report, but facts are facts - Australia’s dependency on imported fuel and oil for transport is approaching 100%.

“According to a government agency report, we had only 12 days of diesel fuel stocks in the country in mid-2014. This level would likely be in reality much less with panic buying in the event of an emergency.

“Other countries have addressed their transport fuel security future - there’s no reason why we can’t address ours.

“Oil companies have no responsibility to deal with fuel security. Their only responsibility is to their shareholders, to make money. We have the capacity and the technology to produce up to 30% of our transport/mobility fuels if our government had effective policies to develop and support local alternative fuel industries.

“For example, the fastest growing liquid fuel category in the world is bio-fuels, yet Australia is not participating in this growth.

“The Australian Government must develop a policy that ensures we have domestic supplies of fuel in the event our fuel imports are stopped or interrupted.

“The government cannot today assure the public that we will have fuel available to keep our businesses, farming, defence and social society operating if imported fuel supplies stop.

“They have a responsibility to do so.”

The NRMA’s Benchmarking Australia’s Transport Energy Policies report was prepared by Air Vice-Marshal John Blackburn AO (Ret’d) and can be downloaded here.