Mike Kelly (Eden-Monaro, Australian Labor Party) Share this | Hansard source

I'm very grateful for this opportunity to speak on the Petroleum and Other Fuels Reporting Bill 2017 because it brings together a lot of issues that I have been concerned about for many years, going back to my time in Defence. It touches on a nexus of not only energy security but energy security as it relates to national security, as well as, obviously, the challenges of renewable energy and the health dimensions of that. I am grateful for the scene that has been set for me by the comments of the member of Wakefield on the details of the trade issues and the trade lane and sea lane issues that are associated with national security and, of course, the reference to the policy framework aspect of this, which is related.

This bill talks about the issue of meeting our obligations under article 2 of the Agreement on an International Energy Program. The requirement there is that, as a member of the International Energy Agency, Australia is obliged to have its holding of oil stocks equivalent to 90 days of the previous year's average daily net oil imports. We haven't been in compliance with that requirement for a long time, and it is deeply concerning in relation to our national security issues. We have seen the instability that can occur in our region in relation to those sea lanes. We have seen the instability, as referred to in the Middle East, and what impact restraint, constraint or interruption of supplies can have on the international market, as well as the exposure that that creates for us in our economy. Also, we have the situation, as has been mentioned, of the collapse of our refining capability and our dependence on almost all of our oil coming through those sea lanes these days, and this includes some of the special oils and lubricants that are related to our Australian Defence Force's capabilities, particularly things like the F-44 special fuel required by the Australian Navy, which has come under threat in recent years as well. What this points to is the need for us to seriously examine where we sit in the generation capacity of our own fuel needs domestically.

I have also in my previous life been a member of a strategy group with the carriage of, and responsibility for, the Middle East desk, where I did study, for example, the passage of the oil wealth from particularly wealthy individuals in the Middle East into our region to fund things like radical madrasahs and terrorist groups. One of the great objectives of getting ourselves off oil, getting the world off oil, is to eliminate that source of threat to world security. This has been highlighted in the great work done by the NRMA and, in particular, Air Force Air Vice Marshal John Blackburn. They have probably been in briefings with members of the government, as they have been with the opposition over the last few years. They have highlighted all the threats and all the vulnerabilities that we have in relation to this problem of our own fuel generation. We have seen the bit being taken between the teeth by the US, for example. The Pentagon have made great strides in moving towards biofuel. They have talked in terms of the great green fleet and their biofuel concept there.

When I was the Minister for Defence Materiel I was very concerned to ensure that we weren't being left behind in that space. There were great opportunities for Australian companies in helping us fill that hole. Of course, going back to Labor's Clean Energy Future Package policy framework, that was also enabling the possibility of some technologies and companies to work in this space. As Minister for Defence Materiel I was particularly interested in one company called Algae.Tec, which was operating a facility down in Nowra. I took a number of logistics personnel down to meet them and look at this technology. I had first seen this in action in Israel, based on a pond technology taking algae and turning it into a biodiesel fuel. Algae.Tec had made this into a much more efficient process using shipping containers. The way it works is that these containers harvest carbon emissions. They work best when you strap them to coal-fired power stations. You can suck effectively 100 per cent of the carbon dioxide emissions from the coal-fired power station, including the large-scale types of power stations that we have operating, for example, in New South Wales. It greatly accelerates the growth of the algae. This product then created a biodiesel fuel that was a straight drop-in fuel that could have been put into diesel engines without any blending or conversion required. This offered great potential. At the time Algae.Tec, with Labor's Clean Energy Future Package policy framework in place, were able to do a deal with Mac Gen for beginning a pilot project with the Bayswater power station to prove this technology.

Unfortunately, of course, all of that has come to naught because of the dismantling of the Clean Energy Future Package, and also in the context of low fuel prices. But that is the sort of technology that we need to be exploring. We should be looking at the example of our like nations around the world, who are really taking this bit between the teeth on moving on from these outmoded fossil fuels, in the context also of our climate change challenge. In Australia the burning of petroleum products for transport is responsible for about 14 to 17 per cent of our total greenhouse gas emissions. More than that, it also creates a massive health liability. I have seen reports in Australia that fossil fuels possibly add about $6 billion worth of cost to our health bills, and also potentially 3,000 deaths a year are consequent of fossil fuel pollution.

Obviously we need to move off this. In recent times we've seen that the Swedish government established a commission on oil independence back in 2005 to achieve the goal of an oil-free society and substantially achieve that goal by 2020. They're well on the way to achieving that. Since then, of course, we've also had the even more conclusive objective set by France that will outlaw the sale of all petrol and diesel vehicles by 2040 in an announcement that was made by their environment minister, Nicolas Hulot, just recently. They will also ban any new project that uses petrol, gas or coal, as well as shale oil, by that date.

The issue there, of course, was that in Sweden they had concerns about dependence on oil from Russia, so they had similar security issues, but this health issue was also extremely significant. The French, in the meantime, are offering financial incentives to scrap their polluting vehicles for clean alternatives, and the government will offer each French person a bonus to replace their diesel car dating before 1997, or petrol car from before 2001, and buy a new or second-hand vehicle. We also saw at the same time the announcement by Volvo that they planned to build only electric and hybrid vehicles starting in 2019. This is something that Labor have obviously been pointing to in the brilliant climate change action plan that the shadow minister at the table here had the main carriage of, and in relation to its full court press on our emissions battle by factoring emissions from vehicles into that.

It's not only France that's taken this bit in their mouths; it's also Germany, who want to do away with 100 per cent of their combustion powered vehicles by 2030, and India has committed to do the same by that same date. The Netherlands and Norway also intend to achieve the same result by 2025. Adding to that move towards this situation, we've also seen the UK commit to banning all new petrol and diesel cars and vans from 2040 onwards, amid fears that rising levels of nitrogen oxide pose a major risk to public health. Of course, in all of these countries, in their major cities, this is becoming almost intolerable. I was in New Delhi in January this year, and if you have experienced the pollution in New Delhi, you can appreciate what an emergency situation many of these major cities are in, just from a public health point of view. The UK felt this was extremely necessary to avoid the impact of poor air quality on people's health. The ministers believed it posed the largest environmental risk to public health in the UK, costing up to 2.7 billion pounds in lost productivity in one recent year. They also stated that poor air quality was the biggest environmental risk in terms of casualties, and their estimate in that respect was that the high level of air pollution could be responsible for 40,000 premature deaths a year in the UK. In fact, the Mayor of London, Sadiq Khan, was obviously in the middle of this problem and called for tougher measures to tackle air pollution, which kills 9,000 people a year in the capital, they believe.

What we're seeing here is a perfect storm. It brings together our national security issues, our health issues and our climate change and renewable energy issues. What we need to do is look at putting back in place the sort of policy framework that existed under the Clean Energy Future package and that is detailed in the Climate Change Action Plan that we currently have on the table, and work with the government to really tackle this issue as a matter of urgency.

It really frustrates me to hear members on the other side say that renewable energy is a threat to health and that renewable energy will kill people when we see statistics like this—statistics that have been assessed in our own environment—and we understand what the public-health risk is. As a result of that, an extra incentive exists to move to clean and renewable energy. If we're particularly worried about the effect on people of the cost of electricity, all of those matters were detailed very clearly in the Finkel review, of which I read all 212 pages. It's very clear that some members of the government haven't read any of it, because it really bells the cat on the policy uncertainty that's been created by not determining the actual framework relating to emissions, and it urgently suggests that the government move on and make a decision on that quickly.

I've referred to the fact that the Finkel review contains a time line for its recommendations. Some recommendations are meant to be fulfilled within 12 months or 18 months et cetera, but at the zero-month mark—which, in effect, are decisions that need to be made immediately—first and foremost, is the Clean Energy Target decision. It's not a question of when that's phased in; it's a question of making a policy decision so the renewable energy investment flows. Without that framework, we won't see companies like Algae.Tec being able to push forward with those sorts of operations. That operation will help build our own domestic capacity in a biofuel that will emit only about 26 per cent of the emissions of normal fuel. And we need those sorts of biofuels, because electric vehicles can't be the answer to, say, fishing fleets, necessarily, or large plant and long haulers and the like, at least at this stage. There will be a niche that biofuels will need to fill in that space, and we won't get that without creating a policy framework that stimulates it. When a local company like Algae.Tec comes up with solutions, that should also provide a gentler glide path for the coal industry, because, if it can completely absorb all the emissions of a coal-fired power plant, it gives us a longer period of time to glide out of those plants. And, at the same time, they are able to have a by-product for the benefit of their own business.

We know that Finkel has also locked in the issue of requiring warning periods for the closure of those facilities, to give us time to plan. That could be achieved more effectively if the emissions from those coal-fired power plants could be offset or eliminated entirely. From the point of view of dealing with not only a significant contribution to our carbon emissions—as I mentioned, 14 to 17 per cent—but the massive health issues that are posed by the fossil fuel industry, the issues and needs of our own Defence Force, the vulnerabilities of trade routes in the region and the instability of the politics and the confrontations across the Middle East and in our own region, it is in our national interest to get on and do this, to sort it out quickly. I urge the government to sit down with us and come to a bipartisan agreement that will enable that to happen.

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