BP have announced a plan to halt refining operations at the Bulwer Island refinery in Brisbane by mid-2015. Andy Holmes, President of BP Australasia, was quoted as saying the growth of very large refineries in the Asia-Pacific region is driving structural change within the fuels supply chain in Australia and putting commercial pressure on smaller scale plants.
“It’s against this background that we have concluded that the best option for strengthening BP’s long-term supply position in the east coast retail and commercial fuels markets is to purchase product from other refineries,” said Holmes. “And while more of our transport fuel demand will be met by imports in future, ample supplies are available to maintain Australia’s energy security.”
Agreements are in place to replace some of the production by importing Jet fuel and a deal with Caltex to supply diesel from the Lytton refinery in Brisbane. Of the 380 people currently employed at the refinery only 25 are expected to retain their jobs to service the storage facilities which will be retained.
The closure has put Australia’a fuel security under further scrutiny despite claims by BP it is not being compromised. NRMA Motoring & Services Director Graham Blight came out after the announcement and said Australia was in a much safer position in 2012 when seven refineries operated and the country’s dependence on imported liquid fuel was much less.
“Australia will have just four refineries by mid-2015 and we will likely be very close to total reliance on imports by the time Bulwer Island closes,” said Blight. “These closures are crushing our refining capacity which has dropped an astounding 42 percent over the past two years. If the Geelong refinery closes, Australia’s refining capacity will have dropped by 54 percent.”
“We would no longer have any liquid fuel supplies that could be considered secure and we would lose the option to resurrect some or all of our local liquid fuel supply as part of a solution to an interruption to our international fuel supply chains. BP cannot state that there isn’t an increased risk to Australia’s fuel security when there hasn’t been a comprehensive analysis undertaken by the Australian Government.”
Alongside the concern, on our part as Australians, about jobs disappearing offshore, is the possibility of disruption to the terminal in Singapore. With stocks reduced dramatically in recent years the ability for Australian transport to continue to function in the event of a serious accident in Singapore for more than a couple of week is limited.