John Madigan (Victoria, Democratic Labor Party) Share this | Hansard source

I move:

That the Senate—

recognises that it is in Australia’s national interest to maintain liquid fuel refining capability.

Three small words: liquid fuel security. They might be unfamiliar to many, but liquid fuel security underpins the Australian way of life. It is essential to drive our children to school. It is essential so we can shop for fruit and vegetables and it is necessary to guarantee travel to anywhere for any reason.

Liquid fuel security underpins our industry. Liquid fuel security underpins our farming sector. Liquid fuel security underpins our manufacturers and our food processors. What is more, liquid fuel security is the linchpin of what makes Australia secure. Our army, our air force, our navy and our various other defence and national security organisations must have security of liquid fuel. Retired Air Vice-Marshal John Blackburn AO said recently: 'Without fuel we don't survive.'

This discussion today is not about division. It is not about political point-scoring. It is about bringing this issue to the forefront of public debate. It is about unifying all in this place to, firstly, recognise the importance of liquid fuel security, and then to come up with a plan.

We must have a plan. We have reached a crossroad. By the end of next year, 90 per cent of our transport fuel, whether refined or crude, will be imported. In the year 2000—just 14 years ago—that figure was closer to 60 per cent. By no later than 2030 that figure is anticipated to be 100 per cent. But these are projections, and things can change with a plan.

This morning I was looking at the end-of-month stock holdings of various fuels as reported by the government. As of June this year we had 30 days worth of LPG in storage, 19 days of petrol, 17 days of aviation fuel and 12 days of diesel. This highlights two problems: the first is our dependence on imported fuel; and the second is our poor preparedness and capability to respond to any crisis.

These two crucial issues call for a national liquid fuel security plan. It might seem as if I am overemphasising the importance this issue has for Australia, but this is not the case. The International Energy Agency says on this topic that it requires member nations to have 90 days of net import oil holdings. This includes oils with which you could not run a car, truck or plane on. It includes things like bitumen, lubricating oils, heating oils et cetera. Even including these oils—oils which do not all assure transport energy security—latest figures suggest Australia only has 52 days of reserves. That is below the 71 days recorded in previous reports. A high percentage of these fuels are imported from overseas. A high percentage are also still at sea, not even on our shore. I and many Australians believe a risk assessment must be conducted. To do this, we would need to assess the whole supply chain all the way back to the Middle East.

While Singapore is an oil-refining hub, we cannot presume it is rock solid. As senators would be aware, events in the ASEAN sphere are quite dynamic. Small regional issues can suddenly have huge implications for our nation. When I talk about the risks associated with importing fuel from Singapore, I am not talking about 1960s-style gunboat diplomacy with its associated blockades. If the disruption was a targeted one, as opposed to a consequence of regional instability, many nations could simply put pressure on the owners of the shipping companies or even the nations who have provided the vessel with a flag. Nations receiving foreign aid, for instance, could be used as leverage.

On the matter of supply lines, Dr Vlado Vivoda of Griffith University warned:

Our supplies are essentially subject to the security of supply lines that bring petroleum products from international markets, particularly from Singapore, which we are becoming increasingly reliant on.

The second issue which any plan would have to focus on is our preparedness and capability to respond to any crisis which disrupts our supply chain. By no means do I purport to have the answers, but I have plenty of questions.

In the year 2000, Australia had seven refineries. Coming into 2016, Australia will have only four. By modern standards, these refineries are admittedly quite small but nonetheless are doing a great job. Caltex, Mobil, BP and Vitol—the new owner of the Shell refinery in Geelong—are the four owners. These refineries alone have served us well. However, in the event of a crisis, would their capabilities be sufficient? Will the storage of liquid fuel be sufficient? Based on the current figures—and depending on the nature of the crisis—absolutely not. Considering Australia has 52 days of net import oil holdings, one might consider that this is the norm by world standards. But the International Energy Agency information for May 2013 indicates that Korea has 240 days, the UK has 220 days, the US has 209 days and even New Zealand has 103 days, almost double what we currently have.

This is a crucial issue. Next week I will call for an inquiry. This is an issue I want the government, the opposition, the crossbench and all stakeholders—all Australians—to recognise and address. I will use Air Vice Marshall John Blackburn AO's words to sum up my contribution to this debate on liquid fuel security. He said: 'We alone amongst all developed oil-importing countries rely completely on commercial market forces for our transport energy security. This is no less perilous than contracting out our Defence Forces or outsourcing our food supply.'