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Morrison Government continues to run up empty excuses for fuel security fail

January 14, 2019 12:35 PM

The Morrison Government has offered a series of empty excuses for Australia’s fuel security fail, trying to paper over the cracks of their deliberate inaction on the same day a product tanker caught fire and exploded in Hong Kong, exposing the precarious nature of the international trade.

Australia has been non-compliant with the International Energy Agency’s 90-day fuel stockholding obligation since March 2012 and the Federal Government has since ignored several key reports, with new figures showing Australia now has just 22 days of petrol and 17 days of diesel on hand.

“The Abbott/Turnbull/Morrison Government has been in power for more than five years and done absolutely nothing to address fuel security yet senior ministers blame everyone but themselves for their epic failure,” MUA National Secretary Paddy Crumlin said.

The IEA mandates countries hold a stock in reserve “equivalent to 90 days of net imports” and Australia is the only developed oil-importing country without government-controlled stocks of crude oil or refined petroleum products.

“Australia is in a much worse position than when the Coalition came to power in 2013. There are now zero Australian-crewed tankers supplying fuel to our nation and just four refineries. This means we now import well over 90 per cent of our fuel and that will be 100 per cent before we know it unless government policy changes the direction of the industry,” Crumlin said.

Early last year, the federal government announced a review of Australia’s liquid fuel security, since delayed, so it could plan to return to IEA standards compliance by 2026 amid concerns over potential flashpoints in the Middle East, South China Sea and Korean Peninsula.

Rather than tackle the issue directly, Resources Minister Matt Canavan told The Australian newspaper this week a reservation would be “costly” saying the best potential was in places like the Great Australian Bight and the Beetaloo Basin and attacking state bans on gas fracking.

Energy Minister Angus Taylor blamed others for the closure of the Kurnell and Clyde refineries in Sydney and said nothing about adding refining or shipping capacity should development occur at the contentious sites in the Great Australian Bight and the Beetaloo Basin.

Taylor told industry publication Daily Cargo News that additional fuel can be acquired to meet surge requirements and that Defence also has 40 international arrangements with partner countries to acquire fuel, reducing the potential impact of market forces in a time of crisis.

The industry argues it has 56 days of import coverage via just in time delivery out of mega refineries in Asia yet the Vietnamese product tanker Aulac Fortune exploded and caught fire off Lamma Island, Hong Kong on Tuesday morning, killing at least one crewmember and injuring four.

“The incident off Hong Kong shows the precarious nature of the industry. A similar fire at one of the mega-refineries in Singapore could bring Australia to its knees – not only due to lost production but also the fact that vessels on the spot market would most likely shoot through to the highest bidder and we would have a price war on our hands,” Crumlin said.

“The Morrison Government’s response shows it is floundering on fuel security. Senior ministers are trying to deflect their inaction to the need for more domestic production and fracking on projects without any approvals.

“Australians would expect our Government to have a better plan and this would involve more refining here and Australian-crewed ships to carry it around the coast.

“The military criticism has also got the Government rattled - 40 international agreements with partner countries to acquire fuel doesn’t change the fact that fuel still has to get here on tankers.

“This isn’t only a matter of fuel security but also national security. Unlike Australian seafarers, foreign crews have no background checks yet they are carrying petroleum products, ammonium nitrate and LNG around the Australian coast.”

Crumlin recommended some holiday reading for the Morrison Government: the MUA’s report titled ‘Australia’s Fuel Security – Running on Empty’ in December last year, written by shipping expert John Francis.