In the event a war breaks out or our shipping routes are blocked, Australia is screwed with practically all of our local refineries out of business.
At the May Senate Estimates, I asked the Department of Climate Change, Energy, the Environment and Water (DCCEEW) for a detailed breakdown of current fuel stocks, specifically how much is finished liquid fuel versus crude oil. Ms Svarcas indicated she will provide these figures on notice and at the same time, will clarify how crude oil is reported under the Minimum Stockholding Obligation (MSO).
I then inquired about the latest figure for Australia’s crude oil stock relative to the International Energy Agency (IEA) requirement of 90 days. Ms Svarcas confirmed that the current figure is 53 days and includes all fuels and refined products in Australian waters. This stock does not include the Exclusive Economic Zone (EEZ) stock, avoiding double counting between IEA and MSO measures. Ms Svarcas noted that “consumption cover days” are reported monthly on their website and are publicly available. She added that these figures indicate how long the stock will last based on average consumption, giving a clear view of Australia’s fuel supply.
It was a big surprise to discover that Australia had sold its 1.7 million barrels of oil from the US strategic reserve. While it was never a good idea to have a national reserve held on the other side of the world, the secrecy with which the sale was done in response to Ukraine is concerning.
Transcript
Senator ROBERTS: Thank you. Let’s move to fuel security. We covered the minimum stock holding obligations for petrol, diesel and jet fuel at some length last Senate estimates. You gave to me on notice, in SQ24000046, that the refineries may also report crude oil and unfinished stock as liquid fuel. Do you have a breakdown of how much of the reported stock holding is actually finished liquid fuel versus crude oil—not a projected conversion of existing crude into future petrol, diesel or jet fuel, but the actual quantities of the four measures, as it exists now?
Mrs Svarcas: Just so I’m really clear, for the MSO obligation, you’re asking how much of the crude oil do we count as petrol, jet fuel and diesel?
Senator ROBERTS: Yes. Can you also provide to me the actual amount, right now, of crude oil as it is, jet fuel as it is, petrol as it is and diesel as it is, and not projected conversions of crude oil into those things?
Mrs Svarcas: I will have to take on notice the projected for crude oil into those things. The MSO does allow, under the reporting obligations, for an entity to effectively say they’ve got a bucket of crude oil, and they will be converting X amount of it through their normal operations—and how much of that is going to be diesel, how much of that is going to be jet fuel et cetera. I would have to take on notice how much of the crude is crude, if you will, and how much is fuel.
Senator ROBERTS: Thank you. That’d be good. You explained previously how there’s the domestic minimum stockholding obligation for petrol, diesel and jet fuel put in place by the government then there’s the International Energy Agency agreement for 90 days of crude oil. Last estimates, you told me we were at 55 International Energy Agency days of crude oil. What’s the latest figure for that, and is all of that stock in Australia’s exclusive economic zone here?
Mrs Svarcas: The actual figure of that today—the last report was from March 2024—is 53 days and that figure captures all of the things. It might be helpful if I describe what’s captured in that. It’s crude oil as crude oil. It’s diesel, petrol and jet fuel. It also includes other refined products. For example, the oil that you would put into your car is included under the definition provided to us by the IEA. It’s those stocks that are on land in Australia and in our domestic waters. But, importantly, the difference between the IEA days and the MSO calculation is that it does not include the product that’s in our EEZ; it’s just the product that’s in Australian waters or physically in Australia.
Senator ROBERTS: So is there any double counting then?
Mrs Svarcas: No, there’s no double counting. There’s a difference between a vessel that is in Australian waters—how it’s included in the IEA days—and stock that is in the EEZ that is counted in the MSO days. It might also be useful, if you’ll indulge me, to explain the difference between the measures that we have in place so that you can get an idea of what we use it for. As I described, the IEA days are one single calculation of all of the fuel and fuel products as defined by the IEA. We also have our consumption cover days. They’re the days that we report every month publicly, and you’ll find those on our website. They are a measure of how long the stock will last. So they give us a really good indication of what we’ve got every month, and how long, based on average consumption, that will last. That’s all publicly available. Then we also have the MSO, which is slightly different, and the purpose of that measure is to set that minimum stockholding obligation to give us the insurance policy of making sure, from our perspective, how much fuel, liquid fuels and things we should have in Australia should there be a market disruption. So the purpose of each of those reportings is slightly different, which is why what goes into them—what we count and how we count them—is also slightly different, because they have different purposes.
Senator ROBERTS: I look forward to the numbers that you’re going to give me. Our strategic reserve—
CHAIR: If you’ve finished that line of questioning, we will need to rotate.
Senator ROBERTS: I’ve just one more question on strategic reserve. You told me at last Senate estimates that Australia has sold all of the oil reserves in the United States’ strategic reserve?
Mrs Svarcas: That is correct.
Senator ROBERTS: That was 1.7 million barrels—nearly two years ago—in June 2022. That hasn’t been reported anywhere, as I understand it.
Mrs Svarcas: No, I believe it was publicly reported. I’ll be happy to table that report.
Senator ROBERTS: Did anyone at the department announce that the 1.7 million barrels had been sold?
Mrs Svarcas: Like I said, I believe it was. I’m happy to be corrected if my evidence is wrong but I do believe it was made public at the time.
Senator ROBERTS: Thank you.
Yes, important information and whoever let it get to this state must be held accountable
I always thought was a risk to store our oil reserves with the USA. Then when Slow Joe started selling off their reserves to China, my thought was “There goes our oil reserves. But did we get paid for them?”
Who in their right mind would sell off our stocks of fuel. Only 53 days in reserve is ridiculous. Common sense should tell you this is far too short of supply required to keep Australia moving.in a catastrophe.