FUEL INSECURITY

MUA CAMPAIGN TO SECURE AUSTRALIA’S FUEL SUPPLIES

With the third anniversary of the axing of the Alexandra Spirit crew approaching in July the MUA is ramping up our fuel security campaign.

The National Energy Security Assessment recently announced by the Government confirms what the MUA has been saying for years. Declining domestic production, diminishing refining capacity and concerns over potential flashpoints in the Middle East and South China Sea all put Australia at risk.

The Turnbull government is sitting on its hands over fuel security with our nation having been non-compliant with the International Energy Agency’s 90-day fuel stockholding obligation since March 2012.

MUA assistant national secretary, Ian Bray said that while the government is running the line that the last National Energy Security Assessment was in 2011, the truth is several inquiries and reports have touched on the important issue of fuel security.

“The Senate has held inquiries into both fuel security and flag-of-convenience shipping, while the Energy White Paper and Defence White Paper also investigated our increasing reliance on foreign fuel,” Bray said.

“Unlike the Abbott/Turnbull government, the MUA has continually led the debate on fuel security in recent years but this has fallen on deaf ears with the number of Australian-crewed tankers now down to zero.

“There are now no Australian-crewed tankers supplying fuel to our nation, down from 12 in 2000. At the same time, the number of refineries has halved to four. This means we now import more than 90 per cent of our fuel and that number is rising.”

Engineers Australia told the Senate fuel security inquiry in 2015 that Australia’s total stockholding of oil and liquid fuel comprised two weeks of supply at sea, five to 12 days’ supply at refineries, 10 days of refined stock at terminals and three days at service stations. The NRMA’s figures indicated that Australia only retained enough fuel in stockholdings to continue delivery of chilled and frozen goods for seven days, dry goods for nine days, hospital pharmacy supplies for three days, retail pharmacy for seven days, and petrol stations for three days.

“All of these doomsday scenarios have been heard before yet the Government expects us to believe the trigger for an emergency has only just occurred – they are playing us for mugs,” Bray said.

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

“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.”

With the nation facing heightened concerns over fuel security, the MUA has reminded the Australian community that the cost of hiring Aussie seafarers to move fuel around our coast averages out to less than one cent per litre at the bowser.

“It is also true that unlike the United States, in a time of national emergency, the Australian Government has no means to use an act of parliament to second ships to a merchant navy. There is also the added problem that there are very few Australianflagged and crewed ships.” n

IT’S A FACT! IT’S A FACT!

Recently the ABC/RMIT Fact Check Unit investigated fuel security, specifically checking ‘Does Australia have three weeks of petrol in reserve?’

Their verdict: Checks Out ✔

The Department of the Environment and Energy released statistics showing the end-of-month stocks of fuel products in Australia. That publication gave 21 days of petrol stocks, 16 days of diesel and 19 days of aviation fuel.

AUSTRALIA’S SOURCES OF FUEL

Production, imports and exports of fuel and oil and are separated into two main categories: unprocessed crude oil, and refined petroleum products.

Crude oil is the unprocessed liquid oil extracted from underground, while petroleum products are the finished, ready-for-use fuels that are the result of crude oil being refined.

An August 2017 report from the Department of the Environment and Energy shows that while Australia produces its own crude oil, around 75 per cent of local production is exported and refined overseas.

The report noted most of Australia’s oil production occurred off the northwest coast - closer to Asian refineries than Australian refineries on the east coast.

“In addition, domestically produced grades of crude oil are generally not as well suited for use by local refineries as those sourced from other countries,” the report said.

As such, Australian fuel consumption is heavily reliant on imports, with 75 per cent of crude oil and 55 per cent of refined petroleum sourced overseas, according to the department.

The department’s monthly production statistics show that much of these imports come via the Asia-Pacific region.

In 2016-17, South Korea supplied 27 per cent of Australia’s refined product imports by volume, closely followed by Singapore with 26 per cent. Japan supplied 14 per cent, Malaysia 10 per cent and China 8 per cent.

Crude oil is sourced from a more diverse range of countries with Malaysia the largest supplier at 33 per cent of imports followed by the United Arab Emirates at 16 per cent.

Indonesia, Gabon and New Zealand were the next three biggest sources, each supplying less than 10 per cent of Australia’s crude oil imports in 2016-17.

While the exact origin of the crude oil arriving in Australia as refined products is difficult to determine, almost a third of global crude oil production in 2017 was in Persian Gulf nations, according to the US Energy Information Administration. Conflict in or near to any of these places, including the Korean Peninsula, the South China Sea or the Middle East, has the potential to affect Australia’s fuel supply. n