Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

I do disagree with the amendments and support the motion as put forward by the minister. There is a lot of excitement and discussion around Australia at the moment—certainly where I come from—about hydrogen, about the possibilities of a hydrogen production platform, about electric cars. As the shadow minister was speaking about comparative investments, I note that $1.2 billion was committed by the federal government to encourage the uptake of alternative technologies to power vehicles, including electricity. I must also point out that he somehow managed to bring in the Sri Lankan family and Christmas Island into that comparative spending effect and noted that $6 million had been spent keeping this family on Christmas Island. I would point out to him that $6 billion was spent fishing people out of the water. I think it bears to keep that in mind.

One of the things that we hope to do in Australia is transfer our energy consumption towards lower emissions and we are doing very well on that pathway. Oil, petrol, fuel and distillate are set to play a very important role in Australia for a long time to come. There is nobody who is sensibly suggesting that we will be able to phase out the use of these products in the short term, but we will be able to reduce our reliance on them.

Oil production in Australia peaked around the year 2000. At that time, it was supplying 90 per cent of our local consumption. That was a pretty good time, for those of us who remember the great adverts coming from BHP, from the Bass Strait and how Bass Strait oil was powering Australia, as it were. That's tailed off considerably now. We are on the dregs of Bass Strait, and production today meets less than 25 per cent of our requirements. Even with that, the oils that we do produce aren't really the right oils to supply our local market. There was a time when we had 11 oil refineries in Australia, and we are now heading for two.

Along with that oil refining capacity comes the storage. I'm from South Australia and well remember the tanks that sat at Port Stanvac. Those facilities are gone, so that ability to store diesel and store petrol in a refined form has largely disappeared. Of course, the problem with diesel and petrol is that they have a shelf life. For a refinery it's ideal: you feed oil in, you keep storage on site, it keeps feeding out and it meets the use-by dates. If you're just going to use these sites for storage, you are engendering a higher cost, because you have to turn the fuel over on a regular basis for no good reason apart from the fact that it's got too old in the drum.

With that refining capacity going, the storage capacity has gone as well. The refining capacity, too, allows us to access a source of fuel that doesn't have a use-by date. It's called oil. Of course, the best place to store oil is whence it came: the ground. Australia now has limited supplies of its own oil. There are good prospects around Australia for exploration for new oil. One of them, of course, that's had a lot of interest is in the Great Australian Bight, which lies off my electorate of Grey, and at this stage the commercial interest in it has evaporated. There are other basins, though, and I think it's important that as a nation we understand just how important this fuel security issue is. If our supply lines are interrupted, we will grind to a halt in a very short time. We know that we have mandated to hold 90 days supply either on site—that is, in Australia—or in the pipeline, but that's becoming increasingly difficult with this loss of storage capacity that I have been referring to.

So it's good to see that the government is making moves to address this issue. Primarily we are offering a subsidy to the two refineries that will remain on the condition that they remain until at least 2027. It's an interesting subsidy in that it's basically covering off on a cost basis so that, if their revenues fall short of making a profit, the taxpayer will move in to make sure the doors stay open. But it is constructed in a way that the companies will not profiteer from the taxpayer subsidy. When they go into the black, there's nothing coming from the taxpayer. I think that's a smart way to structure that subsidy. It means the incentive remains in place for that particular facility to be efficient and make a profit. That will give us some more breathing space, and we've also mandated lifting the reserves the importers and producers of distillate and motor spirits in Australia are to hold by 40 per cent, which will go some of the way to, once again, backfilling that 90-day holding capacity.

But make no mistake: 90 days is not the magic mark. Nothing could be better for Australia than to actually have internal security. We have internal security when it comes to gas, when it comes to coal, when it comes to wind and solar energy. All those things are achievable. But we know, and all the hardheads know, that we will be very reliant on oil for some time to come for our transport, construction and mining fleets. Farmers, I think, are quite some distance from being able to put hydrogen cells in their tractors. Maybe it will come quicker than a lot of us anticipate, but, at this stage, it's diesel. If you want to dig up iron ore—or, in my case, copper—or mineral sands out at Jacinth-Ambrosia, out from Ceduna, or whatever else it may be, it is diesel. There is no substitute for it. It is important we keep that supply line open and well oiled, for want of a better word, so people can access what they need when they need it.

I think this is good legislation. I think it addresses the issue of today. On the broader issue of how Australia transitions to new fuels, to lower-emission fuels, we need to be absolutely honest and realistic about our chances of achieving that in the short-term. For those who say, 'Well, we won't build any more gas-fired power stations; we won't build any more coal-fired power stations; we won't use any more fossil fuel,' that is a recipe for disaster. In the electricity field, without gas it will become increasingly impossible to build new renewable generation capacity. I made a speech about this last night in the Federation Chamber. You cannot keep building renewable energy unless you can backfill the gap for when the renewable energy is not generating.

Gas is the most viable option at this stage. Of course, we're into pumped hydro and nothing is greater than Snowy Hydro 2.0—I'm never sure why they put a zero on the end of that. Let's say Snowy Hydro 2. These are good investments, as is the new transmission line from South Australia through to New South Wales, but you can't do it all on your own. You can't rely on one technology. There is no silver bullet. We are working on a number of fronts—on all fronts, it could even be said—but in the meantime we have to make sure that we mind the shop and that the distillate and petrol supply, the motor spirit supply, to Australian industries and families remains constant. These two pieces of legislation do exactly that.

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