7 April 2022 Stock & Land

THE events of the past two years have shone a bright light on Australia’s vulnerability.

The COVID-19 pandemic and Russia’s invasion of Ukraine have exposed dangerous dependencies in our economy.

Once hypothetical weaknesses have become all too real as stressed supply chains continue to adversely impact Australian businesses and consumers.

This is particularly true when it comes to Australia’s fuel security. Steady access to quality fuel is essential for Australia.

The transport sector – the backbone of so much of our economy – sources 98 per cent of its energy from liquid fuels.

Given it is a prerequisite for our economy to function, the Australian government must ensure that we have secure access to quality fuel.

Yet our supply of fuel continues to be largely left vulnerable to disruption in global supply chains.

The last National Energy Security Assessment was conducted in 2011, meaning the Coalition has not conducted an assessment since it was elected almost a decade ago.

In that time, our fuel security has diminished. By 2018 we were importing over 90pc of our liquid fuels.

All of this imported fuel and oil comes to Australia on foreign-owned or controlled ships.

With only two operational refineries left in Australia, we are exposed to supply chain disruption. Approximately 60pc of Europe’s energy is provided by gas from Russia.

It took Russia invading Ukraine for Germany to cancel the Nord Stream 2 gas pipeline project with Russia, which would have further concentrated Europe’s energy reliance on an antagonistic state.

 Europe is now moving rapidly to address this issue, with the European Union pledging to cut its gas dependency on Russia by two thirds this year, and cutting it entirely by 2030.

With China rapidly expanding its own oil refining capacity and naval presence along vital sea routes connecting Australia to suppliers, we should learn the lessons from Europe before we are forced to learn from firsthand experience.

In 2020, the Morrison government announced it would build a stockpile of crude oil that could be tapped in the event of a major disruption.

But this stockpile is being stored in the US, meaning we could have difficulty accessing it if sea lanes are closed – and we still do not have enough fuel on Australian soil to meet the International Energy Agency 90-day stockpiling commitment.

Recent events show that we need to get serious about our sovereign capability to refine fuel and store it here.