A report by the NRMA has cast doubt on Australia’s future fuel security and tries to offer some solutions to improve our fuel supply chain to mitigate potential problems. The report, called ‘Australia’s Liquid Fuel Security’, was commissioned by the NRMA and written by Air Vice-Marshal John Blackburn AO. It follows an initial report, published a year ago which highlighted our declining fuel stocks.
This new report examines just how bad fuel supply could get under certain scenarios. What the fuel industry has done and what it could do are also looked at. The report also outlines a plan to improve the fuel security situation.
In the year 2000, Australia depended on 60 per cent fuel imports. Today, the percentage is up to 90 and growing. Blackburn says the country needs a plan to stop the number reaching 100. Refinery closure is on the agenda in some cities in Australia and political instability in the Middle East has increased. At the same time, Australia’s stock of fuel has declined.
Blackburn suggests a confrontation in the Asia Pacific region could severely constrain our fuel supplies. There is no viable contingency plan in place to ensure adequate supplies for economic activity and the armed forces.
“We should expect clear assurances from our Government that we have sufficient Australian-controlled sources of fuel to support essential needs in the event of overseas supply interruptions,” said Blackburn in the report. “Given the lack of publicly-owned fuel stocks, the lack of reporting on industry stocks and the very limited public analysis of supply chain risks, it is difficult to see how our new Government could currently provide us with that assurance. Past Governments do not appear to have had a Plan B.
“The good news is that we can do something to improve our fuel security. We do not need to accept our current trajectory, nor do we need to aspire to return to our position of 15 years ago. Instead, we should recognise that the world is changing and balance economic reality with our security needs.”
At the same time as the security of our liquid fuels is being questioned, the progress in developing a homegrown alternative, namely liquefied natural gas, has had a major set back. Shell’s decision last week to abandon plans to set up a string of LNG refuelling facilities along the Hume Highway stymies any attempt to promote this Australian resource as a transport fuel.