The $211 million commitment from the Federal Government to fund increased domestic fuel storage and support Australian oil refineries is a welcome step to improving fuel security. However, industry says genuine energy security requires action on how fuel is transported to Australia and around the coast.
“The COVID-19 heath crisis has highlighted the vulnerability of Australia’s supply chains and demonstrated how quickly a pandemic, military conflict, natural disaster, or economic shock could impact the supply of essential goods,” Paddy Crumlin, MUA National Secretary and International Transport Workers’ Federation President, said.
“Clear gaps in Australia’s sovereign self-sufficiency have been exposed, placing a clear obligation on the Federal Government to close these gaps and reinforce the cabotage system that governs shipping around our coast, along with biosecurity, immigration, and related border controls.”
Crumlin said the pandemic reinforced how absolutely essential shipping is, not only to fuel security but also to maintaining other domestic supply chains that provide essential deliveries.
“Australia’s complete reliance on foreign owned and operated tankers has left the nation extremely vulnerable, with no guarantee these vessels would continue to supply Australia during a major crisis,” he said.
“While recent shortages of household items were inconvenient, a crisis that cut fuel supplies would force the entire economy to grind to a halt.”
The government’s plan seeks to deliver an additional 780ML of onshore diesel storage, along with minimum stockholding obligation for key transport fuels, however the policy will still see Australia fall well short of the International Energy Agency’s 90-day fuel stockholding obligation.
The Maritime Union of Australia said the announcement also failed to address the nation’s complete reliance on foreign owned, operated and crewed tankers to transport oil and petroleum products to Australia and around the coast.
The MUA met with Energy Minister Angus Taylor in July to outline this weakness in Australia’s fuel security.
“The Federal Government clearly understands that improving fuel security requires the strengthening of domestic refining capacity and a substantial increase to domestic storage, but the issue of how fuel products are transported to our island nation remains unresolved,” Paddy said.
A new report by BIS Oxford Economics, commissioned by the Australasian Refineries Operatives Committee and backed by the AWU, has laid out a roadmap for State and Federal Governments that could boost Australia’s fuel refining capacity and its dangerously low fuel stockpile.
The report says Australia must urgently increase its fuel security capacity by at least 4,000 million litres by building new storage facilities at a cost of $2.7 billion. It would not only reduce reliance on overseas imports, it would create thousands of new jobs.
“If a global crisis disrupted shipping routes, Australia would run out of oil in just over three weeks. Our cars would run dry and food supply chains would come crashing to a halt. It wouldn’t be just toilet rolls running out in our supermarkets and we would see pandemonium on our streets,” said AWU National Secretary Daniel Walton.