Australia is producing less and importing more fuel than before. Australia is obligated to keep a 90 day stockpile of oil by agreements and pure common sense, yet this country hasn’t met this threshold in over 12 years.
Minister McAllister, in a breath of clarity, faces reality and admits that hydrocarbon fuels such as petrol, diesel and jet fuel are essential in our modern economy today, despite the net-zero push. In reserves we have around 38 days or 5 weeks of petrol, 31 days or 4 weeks of diesel and 24 days 3 weeks of jet fuel. Yet Australia’s 90 days of strategic crude oil reserves, which were kept in the United States, are said to have been ‘sold’. Almost all of Australia’s liquid fuel is imported and we are extremely vulnerable to a blockade. Imagine if imports ceased.
We are no longer self-sufficient in fuels, which we should be given what’s under our soil. Imagine if there were no more imports and we had only 4 weeks of fuel left. We should be exploring for and producing more oil instead of relying on China to burn our coal and use up rare minerals like cobalt and copper, to manufacture expensive, unreliable and short-lived “renewables”.
Transcript
Senator ROBERTS: Thank you again for being here today. I refer to a media release from the Department of Climate Change, Energy, the Environment and Water. It is entitled ‘Australia’s fuel reserves boosted to strengthen resilience and supply’. Can you please tell me how many days in fuel stocks—
Senator McAllister: Senator Roberts, I am so sorry. Would you mind giving us the date? That will help officials track down the document that you are referring to.
Senator ROBERTS: It is 14 November 2022.
Senator McAllister: Thank you.
Senator ROBERTS: Can you please tell me how many days in fuel stocks Australia currently has of petrol, diesel and jet fuel?
Ms Svarcas: Under the minimum stockholding obligation, our industries are required to have 24 days of petrol and jet fuel and 20 days of diesel. As at 16 January—I will convert that to megalitres for you—we had 1,699 megalitres, so more than the required 24 days of petrol. We had 2,780 megalitres of diesel, which is more than the required levels under the MSO. For jet fuel, we had 547 megalitres, which again is above the MSO.
Senator ROBERTS: Thank you. Are those dates of fuel reserves in Australia? Are the reserves in Australia?
Ms Svarcas: They are either in Australia or in Australian waters. Yes, they are in Australia.
Senator ROBERTS: So that count is water stocks or reserves held overseas?
Ms Svarcas: Not reserves held overseas, Senator. They are reserves held in Australia or in Australian waters.
Senator ROBERTS: So it is in Australia and in—
Ms Svarcas: And in—
Senator ROBERTS: How many in Australia?
Ms Svarcas: I’m not sure if my colleague has a breakdown of what is in the country.
Senator ROBERTS: Physically on Australian shores right now.
Mr Cano: The stockholding obligation enables the entities to count stocks that are being held within Australia’s exclusive economic zone, and that’s taken as part of the total number. So they are in Australian waters on their way to shore.
Senator ROBERTS: So the waterborne reserves are inside our economic zone?
Ms Svarcas: Correct.
Senator ROBERTS: We’re obligated to keep 30 days—that’s three months of fuel reserves—by international agreements—correct? And plain common sense says we should be doing that. How many days does the 1,699 megalitres of petrol represent?
Mr Duggan: Are you referring there to the International Energy Agency’s oil stockholding requirement, which I think may be different to the international—
Senator ROBERTS: Could you explain the difference?
Mr Duggan: Yes. With respect to oil, there is a 30-day minimum stockholding requirement through the International Energy Agency, but I’d just distinguish. In fact, three months, or 90 days, of net imports is the requirement. I’d just distinguish that, though, from what Ms Svarcas and Mr Cano just gave evidence of, which is the minimum stockholding obligation domestically imposed by the government to ensure fuel security.
Senator ROBERTS: What is the difference between the international agreement for 90 days or three months and our own, hopefully, commonsense based requirements?
Mr Duggan: Crude oil is 90 days—international energy oil—
Senator ROBERTS: And some of that is stored overseas?
Mr Duggan: Yes, it’s held in the US Strategic Petroleum Reserve.
Senator ROBERTS: How is that a reserve for us onshore here? If China or anyone else puts a blockade on us, that’s gone.
Mr Duggan: Senator, I’m just trying to make sure you don’t conflate what are two different frameworks here. The one that Ms Svarcas and Mr Cano were referring to is a domestic fuel minimum stockholding obligation. That applies to petrol, diesel, jet fuel—
Senator ROBERTS: That was in the release from your department on 14 November 2023?
Mr Duggan: That’s correct. And then the International Energy Agency’s 90-days-of-net-imports requirement is around crude oil, and that’s obviously a separate—
Senator ROBERTS: How many days of crude oil are in Australia or within our economic zone on a boat right now?
Mr Duggan: The last reporting was in November, and we reported 50 days of holdings.
Senator ROBERTS: In Australia?
Mr Duggan: No, because as part of that we are able to count the Australian holdings and the US Strategic Petroleum Reserve.
Senator ROBERTS: For someone sitting at home watching this who’s concerned about our oil security in a blockade by a foreign country, what sort of security have we got? Fifty days?
Ms Svarcas: I might just clarify the evidence, Senator.
Senator ROBERTS: Whose evidence? Yours or Mr Duggan’s?
Ms Svarcas: Mr Duggan’s evidence. We don’t currently have any stocks in the US stock reserve. That’s been sold. The IEA days that Mr Duggan has referred to—so the international obligation days—
Senator ROBERTS: The 90 days?
Ms Svarcas: The 90 days. We currently have 55 days of stock in there. I might just explain why it’s 55 days and why we haven’t met the 90 days. The way that’s calculated is on total eligible stocks divided by the net imports. Because Australia has been importing more fuel, it brings down the calculation of IEA days—the 90 days—which is why we’re tracking for 2023.
Senator ROBERTS: Could you explain that again?
Ms Svarcas: IEA days, the 90-day international obligation, are the total eligible stocks divided by daily net imports in the previous calendar year.
Senator ROBERTS: Daily net imports, not daily usage?
Ms Svarcas: Correct. This is why they’re two different calculations. The IEA days are about imports. Because Australia is producing less fuel and importing more, it means, just by basic mathematics, that the IEA day count will start coming off. But that does not mean in any way that we are fuel insecure, because the government has made a number of interventions—measures to ensure our fuel security—including through, as I described, the minimum stockholding obligation that means that our importers and producers must hold a certain amount of stock in Australia. So in fact we are more fuel secure now, despite the IEA days not being the 90 days.
Senator ROBERTS: So we’ve basically got three weeks or four weeks of processed fuels: diesel, petrol and jet fuel? Either on our ground or on ships near our coast?
Ms Svarcas: In our waters.
Senator ROBERTS: That’s all?
Mr Duggan: It’s 38 days of petrol, 24 days of jet fuel and 31 days of diesel.
Mr Fredericks: Senator, can we take something on notice which might help you? I’m pretty confident those numbers are reasonably higher than they have been in the past. I don’t have it here; it’s just a recollection I have. So to give you the full picture—
Senator ROBERTS: You’re saying these numbers are higher than what we’ve had in the past?
Mr Fredericks: Yes. But I’d like to test that, and I’d like to come back to you on notice with that.
Senator ROBERTS: Okay. Minister, has the government done any work to determine what a reasonable and safe level of jet fuel stocks, diesel stocks and petrol stocks is? The country runs on hydrocarbon fuel. Like it or not, that’s a fact—transport, food, agriculture production.
Senator McAllister: You’re right that it’s extremely important. It has been an area of work for the government, and the secretary can talk you through the details.
Mr Fredericks: Yes, I was going to say, Senator, just to be clear, that back in, I think, the middle of last year, 2023, the government set what it regarded as the appropriate minimum stockholding obligations.
Senator ROBERTS: The current government in 2022?
Mr Fredericks: Correct, and my team can correct me if I’m getting this wrong. To answer the question you have posed, it made a judgement about what the appropriate minimum stockholding obligations for those three fuels were. To give you an example, the minimum stockholding obligation for petrol is 24 days. I understand it increases at some stage to 27, but at the moment the country holds 38. So petrol is one where the judgement—and the answer to your question, ‘What’s the minimum required?’—is 24, and current holdings are 38. So that’s a pretty good picture—
Senator ROBERTS: All the figures I’ve just been given are above the requirements?
Mr Fredericks: Correct.
Senator ROBERTS: But there’s still only a maximum of around three weeks, four weeks and five weeks, respectively?
CHAIR: Senator Roberts, we’re going to rotate the call. I believe they’ve taken on notice—
Senator ROBERTS: Could I put something on notice?
CHAIR: I was going to say we can come back to you.
Senator ROBERTS: Can I get the derivation of those figures on notice, please?
Mr Fredericks: Yes. We’ll take that on notice.
Senator ROBERTS: The number of days?
Mr Fredericks: Yes.
Senator ROBERTS: Thank you.
Australia is rapidly becoming a basketcase. The fuel situation is symptomatic of government ineptitude and self-serving for the past 40+ years.
When I was a kid we manufactured or grew just about everything. Now we manufacture almost nothing. It all comes from China or some other Asian country. I saw a bag of almond meal in a shop the other day proudly displaying 100% Australian almonds – but the almonds were shipped to Vietnam to be ground and put into the bag and sent back to Australia. Where is the sense in that?
We once had a steel industry. Now our iron ore is sent to China to be made into steel and sent back to Australia. We had an electronics industry – remember Astor and AWA? We had a car industry – all gone.
Australia relies too much on products from overseas. Having our fuel reserves stored in the US does not make sense. It needs to be in Australia and accessible as needed. We have oil and gas in Australia so why are we importing it?
I don’t think things will change until Australians wake up and demand that the government of the day do something for the country rather than for themselves and their virtue-signalling, woke mates and big Pharma. It is a deep pit we have got ourselves into and it will take some time to get out of it.
Senator Roberts we need more people like you in parliament.
I remember those days Mick. My father worked in Port Kembla steel works, We made and drove Holden cars. I remember Australian General Electric and others around Lidcombe in Sydney. All gone now. Having oil stored in the US means the ships transporting it here, a long way, could be sunk.
Hi Malcolm
The whole ‘store stockpiles in the US fiasco’ was surely for money laundering purposes only.
– Is there any proof that Angus Taylor actually stored $93 million of Australian fuel reserves in the US?
– Where did it disappear to? Was it sold? Where’s the invoice or bill of sale?
– Who purchased it?
– What did they sell it for? At a profit or loss?
So many questions need to be answered by the criminal cartel in Canberra.
Cheers
Alan
Hi Malcolm, I am shaw that when covid got going the price of crude crashed dramatically. The then government bought loads to be stockpiled in the States. I guessed that was for Australian use. So now they are saying its been sold off. To whom at what price and why when this was done for Australia’s benefit
Thanks, keep up the good work.
Gary Buckle
Years ago several ex oil industry workers told me that we are sitting on an ocean of oil. They would drill holes, strike oil, cap them and move on.
Trouble is, we don’t own that oil.
My information is that the reserve in the US is fictional and that we have unmeasured fluctuating supplies down to as low as four days for diesel, yet our sole supply is Singapore, which is also the commercial nerve centre for China. The first whiff of war with China and our contract will be cancelled, legally. Australia will be hurtled into the medieval era in days.
The coup was executed by Menzies in 1954 when he signed the Oil Price Parity Agreement, which means we pay international prices for our own oil. But as BP ignores this, and all 10 refineries have been closed down, BP takes our light sweet crude for free and we are taxeded into oblivion for the only ungraded fuel of any OECD nation.
Anyone who thinks this can be resolved politically is bananas.
Liam,
Our proposal put to Senator Roberts is precisely about this.
Vic
As we know: currently we have 4 weeks of diesel reserves in Australia [not to mention other fuel products]
If our fuel supply would be blocked anywhere between the Middle East, Asia and Australia…we have 4 weeks to break up that blockade, otherwise FAMINE will happen.
We have plenty of food, but without diesel, food products could not reach the supermarkets.
After 4 weeks: we are going to die of starvation…[only the farmers will survive ]
The enemy will get our full [almost empty] Continent without bombing or shooting us…
Cutting the fuel supply would destroy us.
We have everything we need in Australia, but if we cannot produce our fuel, then we are doomed.