David Gillespie (Lyne, National Party) Share this | Hansard source

I rise to speak in favour of the Fuel Security Bill 2021 along with the Fuel Security (Consequential and Transitional Provisions) Bill 2021. Our nation runs on diesel and petrol, and our airline industry relies on jet fuel. It's a fact of life that 90 per cent of our transport fuel is liquid fuel. Our nation also uses plastics in everyday life, and gas and liquid fuels are part of their formation. Liquid energy security, therefore, is a critical issue for the nation. We've had five refineries close and we have two left: Ampol in Queensland and Viva in Geelong. The COVID crisis has exposed the vulnerability of our supply chains in so many areas, none more prescient and relevant than our liquid fuel supply chain.

This bill incentivises our two remaining refineries to upgrade their refinery capability, to make both pure and cleaner fuels, diesel, petrol and jet fuel, particularly in regard to the amount of sulphur in them. The bill creates a fuel security services payment that has a collar and a cap, a top and a bottom limit, which is variable, to support production when production is at a loss-making amount, as in financial loss making. The collar is at $10.20 per barrel and has a cap of up to 1.8 cents per litre when it's $7.30 per barrel. So they are only getting the assistance when they are making a loss, not when they are already making a profit.

The amount of petrol used annually in Australia is considerable. It's about the same as diesel. It's 16,170 megalitres for petrol and 16,211 megalitres for diesel. A megalitre is a million litres. Long term, we really do need to address our fuel security. As you know, we have relied on a lot of our crude oil from the Bass Strait. That is receding as a source of oil production and gas. That's why we are looking at exploring elsewhere, around the country, on land and at sea. People will only realise how critical that is if we have another disruptive episode in the supply chain.

As we are an island, we rely on trade going around the world in an uninterrupted fashion. You saw what happened to international trade when the container tanker blocked the Suez Canal in Egypt. It was really quite frightening. You can imagine everyone saying we will create so many thousands of jobs in the upgrades of these refineries and maintain employment in them. But, really, if there's no liquid fuel in Australia, could you imagine? Food transport, all industrial transport and the whole trucking industry are dependent on diesel as are everyday tradesmen and commuters, school children. Agriculture would cease to function if we didn't have liquid fuel security. It's more than just 750 jobs in the refineries themselves and over 1,000 people in improving their capabilities; it's millions of Australians who rely on liquid fuel.

The second measure in these bills, besides the fuel security services payment, is the minimum stockholding requirement, which mandates the minimum level of major transport fuel stocks that the fuel companies must keep onshore. This requirement commences on 1 July 2022 and is set at the pre-COVID-19 average consumption levels. But by 2024 that will have to rise to a 40 per cent increase in diesel holdings. We have energy sources in coal and gas, solar and wind, but liquid fuels deliver 50 per cent of our energy use. There is no way that our existing power stations, wind turbines, solar panels or hydroelectricity or pumped electricity would be able to replace all that liquid fuel energy with electrical energy. We would be building many, many more power stations; hence its great importance.

We on this side have also supported development of future fuels with the hydrogen project. We have supported biofuels by giving them a lower tax rate. Bioethanol has a lower excise at 14 cents a litre compared to that on diesel and petrol, and biodiesel also gets a discount. There are consequential amendments to several other bills that will allow the Australian tax office, the consumer competition commission and the department of energy to check on the implementation and the integrity of the minimum stockholding obligation, and the fuel security services payment. There are changes to the Competition and Consumer Act, the Tax Administration Act, the Fuel Quality Standards Act, and obviously these consequential changes are equally important.

But it's interesting, almost scary actually, how thin the margins are that we have operated our liquid fuel security on for so long. This bill is so timely and so important. It's one of the most strategically important bills that will pass through this parliament, and I highly commend it to members to all get behind and support it. I don't think we will have any objections from either the opposition or the crossbench. But to put things in perspective—that just-in-time philosophy—recently the Northern Territory fuel supply dried up because a boat was delayed. Several years ago a major trucking company advised me that Melbourne and Victoria almost ran out of diesel because one or two tankers got diverted elsewhere. So we can't rely on that any more.

The massive increase in stockholding is really important, and it will make it much safer and more secure for Australia to operate with 90 days of oil and diesel in reserve, onshore. I don't think having it all allocated on a floating tanker or in Europe or America is enough. We need to have it onshore, available for everyone, because we're living in a very uncertain world, and the coming decades—

Debate interrupted.

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