Rex Patrick (SA, Independent) Share this | Hansard source

I stand to speak on the Fuel Security Bill 2021. I indicate up-front that I'll be supporting the bill but I, like Senator Ayres, share concerns about the way in which we got to this point. I'll go back to 2000, when we imported 60 per cent of our liquid fuels. By 2013 the demand had grown and basically we'd seen our production drop—substantially reduce—and had moved to 90 per cent importation of our liquid fuels. That's the state that we're in. Back in 2012 we had seven refineries. By 2015 that had dropped down to four.

That was at about the same time that the Senate started looking at things in relation to fuel security. I refer back to the Rural and Regional Affairs and Transport References Committee's inquiry into Australia's transport energy resilience and sustainability. The alarm bells were ringing back then. We could see what was happening. We were importing most of our fuel, and we saw our number of refineries decrease substantially, to where we had only four. And it was at that time that we started looking at the numbers of days of fuel that we had available in stock, here in this country. The government will try to claim that they're meeting some of their international obligations—the 90-day obligation—by saying, 'We've got fuel in ships, on the way.' But that's not allowed to be counted—and sensibly not allowed to be counted—because it's not on hand, not fuel that you have available. Many things could happen that could disrupt that fuel in making it to Australia. So, properly, we should not count that.

That was the situation. We've seen some other reviews. We've had joint parliamentary and House committee reviews into fuel security. One of the recommendations that came from those committees was that there ought to be a liquid fuel security review, which has occurred and it sat on the minister's desk for two years. For two years it sat there. I looked at my notes over the last week or so and I did actually FOI that document, but the claim was that it's a cabinet document. I'm now seriously starting to doubt that claim—that a document sitting on the minister's desk for two years is destined for cabinet. What sort of responsiveness are we getting from the government to all of this?

Perhaps another sign of where we had some difficulties was back in 2018. There was a great international military event, the Pitch Black exercise. It ran over three weeks, from July through August 2018. We had 16 different air forces there. We had 140 aircraft. Our military were conducting exercises, preparing for defence-of-Australia type activities, working with other air forces, working with our allies. And what happens? We run out of fuel. We ran out of fuel because a ship that was supposed to be coming from Singapore didn't turn up. So we had to end the exercise early. Now, if that wasn't a signal that there was a problem, then I don't know what sort of signal you can expect.

Maybe a pandemic helps you realise that supply lines can be interrupted. Supply lines can be interrupted even by way of border closures. We were just hearing of the refinery shutting down in Kwinana—Western Australia's supply. You'll also recall, during the pandemic, that Minister Taylor announced that he'd bought into reserves in the United States. I asked some questions about this strategic oil that we'd purchased. In answers that I got from Minister Taylor, he revealed the arrangements. He said the arrangements between the Australian and United States governments were not legally binding, not treaty-level agreements; instead, they were a lesser government-to-government arrangement.

Both governments had agreed the text of the arrangements, but that remains secret. We have not seen what that agreement is. The Australian government won't be tabling the text of the arrangement in the parliament, I was advised, and there will be no review by the Joint Standing Committee on Treaties. We went off and purchased $94 million worth of fuel to stick in tanks in Louisiana. So our strategic reserves sit 14,000 kilometres away. Seriously? Is this a government that doesn't appreciate what happens in time of conflict? We've already heard Senator Ayres telling us that we don't have ships with an Australian flag on them. So we can't really control what happens, as we might do in wartime or a time of conflict, to get that fuel that is in Louisiana back to Australia. Sure, we got it cheap. We all remember the negative price of fuel, I think, that occurred throughout the pandemic. But it doesn't help us in having fuel here in this country.

I do support the aim of this bill. This bill does a couple of things. One of the things it does is put a minimum storage obligation on refineries, on importers and on storage companies, and that's a good thing. Indeed, the government has announced $200 million to assist companies to build up their storage capability, and that's a good thing. I'm not standing here saying we shouldn't do what we're doing; I'm just standing here saying we're not doing enough. We've got, at best, to be generous to the government, about 30 days of fuel. If something happens, we have the Liquid Fuel Emergency Act, which allows the minister to intervene in the market and preserve our fuel for essential services. But anyone who knows anything about this topic will know that those powers are brought on very slowly. Through the normal course of use, we would probably run out of fuel before all of those powers kicked in.

We have a real problem. We have a national resilience problem. I'd like to think that, if supplies were cut, we would have 90 days of fuel like we are required to have so that we could keep our economy running, so that we could move across to various different measures to make sure that our economy ran to the extent that it was possible—certainly to make sure that essential services were available and that our Defence Force didn't run out of fuel. These are important issues. These are the sorts of issues that one would expect the Liberal Party to be good at. They're normally very strong on defence, but they've ignored this. Senator Molan has stood up and said stuff about this, bravely, in the face of his own party's failure to do anything. This is a really important issue.

The other part of the bill is to assist refineries. Remember: there were four refineries when the announcement was made, but two of them have said, 'No, sorry, not interested.' We have to rely on the two ASX refineries. They have said that they're going to stay, but we have to assist them to make sure that they stay on Australian soil. I support us assisting those refineries, but there's an amendment that I'm going to move to this bill. The amendment says that the government needs to provide a plan, which it has to table in 2023—in a couple of years time—that says what happens after 2027 and after 2030, which is the maximum extent to which the refineries can rely on the assistance. I want to know that. I'm not trying to be prescriptive and say, 'You've got to tell us what Senator Patrick wants to hear.' I'm not asking for that. I just want to know what the government's plan is. Does it intend to continue supporting the refineries? If the refineries are going to leave, how are you going to manage stock? They have some elasticity about them, because there's an in-feed to the refinery, and, as long as that's full, we've got fuel coming out the other side that's available for Australians to use.

I want to know how you intend to transition away from fuels that are, potentially, not stocked here in Australia. If we're not prepared to have 90 days of fuel, then we need to make sure that our country is running on things like electricity, hydrogen and ammonia. We need to think about shifting some of our transport from road to rail or from rail to coastal shipping. We need to have a plan. It's a novel concept to have a plan about energy security for this country! I know I've got some support amongst the crossbench—and I'm hoping I'll get Labor's support for this—but I hope the government itself will say: 'You know what? Having a plan is not a bad idea. Having a plan that we can put out in the public domain, where people can contest it and maybe enhance and improve it in some way, would be a good thing.' I'm told the government is not going to support it. The government does not want to have a plan, which is consistent with everything that's happened to date. We've just stumbled along. We didn't wake up when we couldn't properly fuel an Air Force exercise, embarrassingly, and we haven't really learnt from the pandemic.

The measures in this bill are important. They are a step, but in no way could they be considered a comprehensive plan to deal with our fuel security. It is a really important issue. I've looked at the United States strategy papers on how they might tackle a war with China. Do you know what their strategy is? They're going to cut off fuel through the Strait of Malacca and across the Stan countries, the pipelines, and they will probably take out the fuel supplies of China using cruise missiles, possibly launched from submarines. But the point is the US strategy is to starve China of fuel. That's what they intend to do, and the Chinese are very alert to this. They know that's a weakness. They refer to the Strait of Malacca as their Achilles heel. It is a huge problem for them. They're thinking about it. The United States is thinking about it. Yet we look at our own fuel security and we're not prepared to have a robust discussion, a robust debate. We're not prepared to act when the signals have been there, whether it is the 2014 Senate inquiry, the House inquiries or the NRMA funded study that looked at fuel security. With all these things—Exercise Pitch Black, the pandemic—we are skating on thin ice and not reacting properly.

I will be moving an amendment during the committee stage that requires the government to lay out a plan. How sensible is that? How sensible is the idea that we would have a plan about energy security and that we'd put it out into the public domain so industry could see it and the public could see it and we could all talk about it? But I fear the government is not going to support that.