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Lost opportunities mounting as uncertainty over Darwin port lease continues
It seems we’ll be waiting until at least sometime in the first quarter of 2022 for the Government to decide on the future of the Port of Darwin lease. In the meantime, the lost opportunities resulting from the lack of a coherent strategy for Australia’s most important northern port are starting to stack up. These opportunities don’t relate to overly simplistic debates about symbolism or passive intelligence collection; rather, they’re tied to fundamental challenges like national resilience and preparedness. Some recent US and Australian Government announcements on liquid-fuel storage in Darwin illustrate these costs. Let’s start at the beginning. Despite its vastness and remote geography, northern Australia has only limited capacity for bulk liquid-fuel storage. There’s little surplus capacity in the storage that does exist and it relies on just-in-time supply chains underpinned by dated assumptions. The storage capacity at Darwin’s Vopak Terminal, for example, was built on a 1996 assessment of fuel requirements. For the Australian and US militaries, liquid-fuel supply is a challenge, but jet-fuel security is northern Australia’s Achilles’ heel. The ships supplying jet fuel to the region depart from Singapore and then arrive at Darwin’s port. The fuel is then transferred from the port to the Vopak Terminal, where almost all of northern Australia’s jet fuel is stored. The fuel for RAAB Base Tindal is then transported the 300 kilometres from Darwin to Katherine by trucks owned and operated by private companies. For most of the year, airlines are the biggest consumers of jet fuel in Australia’s north. The Australian Defence Force’s use of 30 million litres annually pales in comparison with the commercial aviation sector’s consumption of 125 million litres. It’s during major military exercises, when consumption rates rise rapidly, that the jet-fuel supply chain in northern Australia gets stretched, even though exercises are planned years in advance. Even in peacetime, jet fuel from Singapore is subject to availability and weather conditions. Despite this vulnerability, there’s no legislated or mandated requirement for a strategic reserve of jet fuel to be held in northern Australia. And it’s hard to find a commercial driver for the development of such reserve capacity without government intervention. So, considering the increased strategic uncertainty and greater US military presence in northern Australia, what’s the plan? In February 2020, the government announced that it was investing an extra $1.1 billion in RAAF Tindal, including An artist’s impression of the planned new United States fuel farm at East Arm. increased fuel storage. That decision Crowley Solutions
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