Monday, 21 June 2021
Fuel Security Bill 2021, Fuel Security (Consequential and Transitional Provisions) Bill 2021; Second Reading
The Fuel Security Bill is indeed welcome, but it is this government's failures, unfortunately, that have made this legislation before the parliament necessary. Our nation needs a secure fuel supply. We need fuel in order to move around our country from A to B. We need it to fly around our regions, particularly in a big state like WA, which is my home state. We need to be able to get to our workplace here in Canberra. Our nation needs it to move its goods and people from A to B—everything we use: groceries, construction supplies and medical equipment. It is a critical good for our nation on which our access to everything else depends.
We know from the last 18 months that we can't take our ability to get things from A to B for granted and, indeed, our fuel supply. Only now is this government taking any action on fuel security. Our country is now close to 100 per cent dependent on international supply chains, and we're seeing job losses across refineries around our country as refineries have closed down. This has been the case in my own home state of Western Australia. But we have seen these warning clouds on the horizon for a long time. They have been brewing for years.
Under this government, we have seen many a broken promise on fuel security and jobs security for Australia's fuel workers. A Senate inquiry back in 2015—that's right, six years ago—recommended the Australian government undertake a comprehensive review of Australia's fuel security problem. The government didn't even start this review or announce it until 2018, with a due date of late 2019. As with everything else with this government, fuel security and the job security of thousands of refinery workers only gets a call-up when there is a bad front page.
The interim report on liquid fuel security was delivered to the government more than two years ago, in April 2019. The government has not released the final report, which was due in late 2019. The government has delayed and neglected the basics that we need to keep this country running. The government chose not to act then, not even to deliver the final report so that we in this nation could see what was really going on.
Thanks to that failure to act, our country has been left almost entirely reliant on global supply chains for one of our most critical domestic inputs. The interim report identified a number of things that could have been done a couple of years ago. It identified serious noncompliance with the International Energy Agency obligations for domestic fuel stocks. Our requirement is to have 90 days of fuel to help protect against global and domestic oil shocks. We weren't compliant then, and we aren't compliant now. What will happen in our country if the stock all gets tied up in one of the global production locations—say, Singapore—and we don't have access to those inputs?
For not one year in the last eight have we been compliant by having the right stores. This leaves our nation wide open to fuel security shocks. It also leaves our national security vulnerable. We're at only 58 days of supply now. That is a massive 32 days short of that 90 days. This is really significant for Australian families, businesses and industry. Most Australian households spend the same amount of money on fuel as they do on electricity and gas combined. We must have a secure supply to prevent price shocks to Australia's families and businesses. It's critical for our national security. In our volatile world we need fuel stocks for industry, defence and aviation. For a government that likes to talk really big on national security, on this key issue that is so important to national security they've been missing in action for years.
The interim report went as far as to call Australia an 'outlier' in our approach to fuel security. We are an outlier, because our fuel stocks have been far from secure. Indeed, the government's appalling record on electric vehicles makes our appalling fuel security stocks and the predicament that leaves us in even worse. It exposes Australian families even more. In amongst this government's inaction on fuel security is the government's ideological bent against electric vehicles. Their policy neglect leaves us as an outlier here, too. It consigns Australian drivers to high fuel costs, takes away choice and maintains our dependence on foreign fuel rather than on our own renewable energy sources.
The Electric Vehicle Council notes that the lack of policy action has rendered the Australian market 'uniquely hostile' to electric vehicles. Sadly, they're not wrong. Australia used to be a world leader in many fields, including electric vehicles, vaccines and any number of other measures. But under this government we're at the back of the pack, with Australians missing out. Only 0.7 per cent of cars that are sold here in Australia are electric, compared with a global average of 4.2 per cent, 11 per cent in the UK and 75 per cent in Norway. This is not because Australians don't want these vehicles. A majority of Australians say they'd consider one for their next car. But there are simply no electric cars available in Australian for under $40,000, and just five models for under $60,000. By comparison, in the UK there are eight models that are cheaper than the cheapest model in Australia. Under this government we've seen inaction and scaremongering, including by the Prime Minister and multiple frontbenchers, saying that electric vehicles will 'end the weekend'. And we've seen entrenched higher costs for electric vehicles, higher transport costs for families and much higher emissions. Labor's electric car discount will cut import tariffs and fringe benefits tax from non-luxury electric vehicles in this country. The fact that this government still has no electric vehicle policy in 2021 is a significant embarrassment. It's an embarrassment that costs families at the bowser and exacerbates our fuel security issues, which under this government have been left to languish.
We have seen little delivery on fuel security and fuel jobs under this government. Those on the other side will want to point to the pandemic as the reason our fuel security is in dire straits and the reason that this package is needed, but that's a convenient distraction from their lack of stewardship of Australia's fuel sector over the last eight years. Here is the time line. In 2015 a Senate inquiry, five years before COVID, recommended a comprehensive review of our fuel security problem. It took this government three years, until 2018, to announce that it would even look at the issue. In April 2019 we finally got an interim report, four years after it was recommended by the Senate inquiry, and it was absolute crickets from then on. That was, of course, until there was a photo-op, last September. It was a photo opportunity that delivered nothing in terms of fuel security and nothing in terms of job security for fuel sector workers. We have a government that likes to pretend it is a friend of working people, of people in traditional energy industries, but the record of those opposite on fuel refineries is about as good as their record on the now non-existent auto manufacturing industry in this country.
Let's take a look at the government's announcement of the fuel security package in last year's budget and what it has delivered. They promised, according to the media release, a fuel security package that was going to secure Australia's long-term fuel supply. It was going to create a thousand new jobs. What have we seen since then? We've seen the announced closure of two of Australia's only four remaining refineries. That's right: half of Australia's refineries have announced they're closed since this announcement. In September, Prime Minister Morrison and Minister Taylor claimed their package would back local refineries to stay open. Just six weeks later, in October, the Kwinana refinery announced that it would close. On 14 December, Minister Taylor claimed the government was taking immediate and decisive action to keep our domestic refineries operating, but within two months, on 10 February this year, ExxonMobil announced its Altona refinery would also close.
What about those jobs? Those two refineries alone directly employ 950 people, between them. Thousands more jobs in fuel dependent industries are on the line. Australia's petrochemical manufacturers all rely on by-products of these refineries, which are closing. This is dire for our plastics and other industries in Australia. It's more proof that the government knows how to talk about jobs but doesn't actually know how to deliver them for working Australians. Labor knew this photo opportunity last September was insufficient. We warned then that it was inadequate and would fail to address Australia's fuel security needs, just as we have warned for years about our increasing dependence on foreign fuel imports in the changing global environment. We've gone from relying on imports for 60 per cent of our refined fuels in 2018 to now having a 90 per cent dependence on imports of liquid fuels.
This package of bill does nothing to address Australia's lack of a strategic fleet. We're still completely reliant on a fleet of foreign owned tankers. This is at a time when those opposite are talking about the drums of war beating. Our fuel security is in a disastrous shape on their watch. Government inaction has hung workers out to dry. It has worsened our national fuel security and it has left Australian families, businesses and industry exposed to fuel shocks in an increasingly uncertain world. Government neglect over electric vehicles worsens this predicament. So, while we welcome this package of bills today, it simply comes too late for the workers at Kwinana and Altona. It comes after eight consistent years of not having enough onshore fuel stocks.
This bill, the Fuel Security Bill 2021, is not about fuel security. It's about $2 billion. It's about handing over $2 billion to the government's oil company mates to try and prop up ageing polluting oil refineries that are on their last legs. If this bill were really about fuel security—meaning ensuring sufficient fuel for transport so that we can keep transporting goods and people around the country in the short, medium and long term—you would think that it would actually move us forward by focusing on the two things in its name: firstly, what particular types of fuels we should be using to move people and goods around the country—what types of fuels does it make sense to support—and, secondly, securing the supplies of those fuels.
If there's $2 billion on offer then you'd think that any sensible government would want to ensure that that $2 billion is spent wisely on these fuels and does in fact secure the supplies of these fuels. But, no, the bill is fixated only on propping up the production of polluting fossil fuels—petrol, diesel and jet fuel—rather than paying any attention at all to clean alternatives. This legislation is extraordinarily out of step with the times. At a time when the rest of the world is taking action to reduce our reliance on fossil fuels, when governments around the world are committing to ending subsidies on fossil fuels and slashing their carbon pollution, we are increasing our dependency. We are increasing our subsidies. It is just so wrong. This bill is basically providing massive handouts of our taxpayer dollars to some of the biggest polluters in the country. This is while we're in a climate crisis, when the No. 1 responsibility of any government concerned about the security and safety of the community has got to be shifting away from burning oil, coal and gas.
Let's have a bit of a think about what could be done with $2 billion. That would secure supplies of clean fuels and/or the ability for people and goods to be transported using a minimum of fuel, or perhaps none at all. Let me just summarise some of the options that the government are obstinately ignoring in their quest to prop up their fossil fuel mates. No. 1. is serious support for electric vehicles. That means electric cars, electricity buses and electric freight vehicles. How about having an electric vehicles strategy? How about having some targets, like other countries and other conservative governments all around the world have? How about rolling out a network of fast-charging infrastructure so that everybody in the country has got the opportunity to drive a non-polluting electric vehicle?
How about some incentives to help overcome the fact that electric vehicles are, on average in Australia at the moment, $20,000 to $30,000 more expensive than internal combustion engine vehicles? How about requiring that people who import vehicles actually have to import clean vehicles as a proportion of their imports? How about investing in renewable energy to power these electric vehicles, turning Australia into a renewable energy superpower with solar, wind and pumped hydro?
How about upgrading the grid to make sure that it's fit for purpose for renewables, so we can shift energy around to where it's needed? How about investing in green hydrogen, produced by this abundance of renewable energy, and then the hydrogen infrastructure, so that it can be used for heavy vehicles, freight trains and substituted for fossil fuel gas and exported to the world as a zero-carbon fuel?
How about investing in public transport and in walking and cycling infrastructure to give people the opportunity to get out of their private vehicles altogether? Give people the choice of great public transport and they use it. Give people the option of riding their bike safely, which requires no more fuel than your Weet-Bix in the morning, and give them the choice of doing that on dedicated bike infrastructure and people will use it. How about investing in low-carbon or zero-carbon shipping, investing in electric aircraft? How about producing biodiesel and other green liquid fuels, like producing jet fuel from algae? In other words, take the types of actions that governments all around the country are doing at the moment. They're taking this seriously, tackling two problems hand in hand—our fuel security concerns and the climate crisis. But, no.
Just imagine we had a target like Norway does of no sales of new internal combustion engines by 2025. That's in four years' time. Or in the UK, a ban on sales of internal combustion cars by 2030. Imagine, like in Norway, in the UK, in Germany and in other countries around the world, that we were actually seeing a rapid shift to electric vehicles. Imagine what that would do for our need for polluting petrol and diesel. Correct—it would absolutely slash our need for polluting petrol and diesel. Our fuel security problem would be well on the way to being solved.
The government and the Labor Party talk jobs as being a reason why they are going to support this massive subsidy for refineries. The Prime Minister's media release speaks of this cash splash resulting in 3,000 jobs—1,250 direct employees across the two refineries and creating up to another 1,750 construction jobs. I'm very curious about the projected 'up to 1,750 construction jobs' that are apparently going to be created to accelerate the necessary major infrastructure upgrades. I think we need to take this figure with a very big grain of salt and note that these construction jobs are only likely to last for a few years. As for securing the jobs of the 1,250 workers in the two refineries, apparently the government has secured a commitment that these refineries won't close before 2027—that's six years. I would not be betting any money at all on them continuing beyond that given the age of these refineries and given where the world and Australia need to be in slashing our use of petrol, diesel, and jet fuel beyond that.
But, look, let's just take it at face value. Let's pretend that these job numbers are real and let's do the sums. Two billion dollars for 3,000 jobs is $666,667 per job, each of which may only be for a few years. This is a really serious subsidy for fossil-fuel jobs that could be spent so much better in helping the shift to jobs in clean, green, zero-carbon industries. Why does this matter? Why do we care about where our money's spent, whether it's spent on propping up oil refineries or in clean energy?
I'll bring it back to the basics. What every government in the world should be focusing on is its most urgent task. We are facing a climate crisis. We are facing a climate crisis where, on current projections, we are headed to global average temperatures three, four or more degrees above what is safe for humanity and the rest of life on the planet. Four degrees of global heating means no more growing wheat in Australia. It means pretty much no more growing anything in the areas that are currently our major agricultural production zones. It means metres of sea level rise, flooding the homes of millions of Australians. It means wildfires that are more extreme, hotter, more extensive than they were in the 2019-20 Black Summer fires. It means more extreme floods when there aren't fires. It means unaccountable numbers of plants and animals going extinct. It means billions of people across the world being climate refugees, homeless without a way to feed themselves and looking to find anywhere on the planet where they can survive, and it means billions more people suffering, struggling to survive, living absolutely wretched lives. That is why it matters. That is why we need to be taking urgent action. There is no more time for hard-heartedness. There is no more time for half-solutions. There is no more time for subsidising the polluting fossil fuel industries.
Other countries around the world have accepted this challenge. Let me remind you of what the G7 agreed to just over a week ago. They agreed to halve their collective emissions by 2030, to end fossil fuel subsidies by 2025—not to hand out billions of dollars to oil refineries—and to achieve an overwhelmingly decarbonised power system in the 2030s. Australia is part of the world, yes? We consider ourselves to be an advanced, developed country, yes? We're not separate on another planet. We have a responsibility to play our part.
The good news is that there are so many ways that we can shift to zero carbon and zero-carbon technologies. There are so many ways in which we can change the way we are living, working and producing food and fibre and manufacturing. Some of these technologies are mature technologies. Some of them need some more work and development. It really makes sense to get a move on with the more mature technologies while we sort out the rest. These mature technologies include renewable energy, batteries and electric vehicles. Transport is an area where we can make huge inroads, and transport is 20 per cent of our carbon pollution. It makes so much sense to do everything we can to shift our transport to zero-carbon transport. This is such an opportunity. If we have a government that has $2 billion it wants to spend to create fuel security, then I can tell you there are so many ways it could be spending that money, ways that will not only create fuel security but will also make big strides towards tackling our carbon pollution.
That brings me back to the bill before us. Basically, while the rest of the world is acting, transforming their fleets of vehicles, this government has its head buried in the sand. We have been waiting more than two years for any kind of action on electric vehicles, but this government is just ignoring them and bringing forward legislation like this. It's still scrambling even on this bill. It's rushing urgently to get it through the Senate without a proper process. The bill was not referred to a committee. There was no public exposure draft of the bill for community consultation. There has been no Senate inquiry process; that was opposed by the government when we suggested it. Instead, we have a rushed, artificial deadline of 1 July to hand over an enormous amount of money without any scrutiny.
I will be moving a series of amendments to this bill to try to improve this awful piece of legislation. We think they are very sensible and reasonable amendments. I really hope that the government and the Labor Party will support them in order to improve this awful bill. First up, instead of spending $2 billion on fuel refineries, we should be spending that sort of money on a national electric vehicle strategy, with public investment in charging infrastructure and incentives to encourage people to shift from polluting vehicles to electric vehicles. We've also got an amendment that's going to require the Productivity Commission to report on this framework and on how cost-effective it is compared to other mechanisms. The Liberal Party like to say that they are cost-efficient. The reality is that they use that argument whenever they want to oppose spending but never when it comes to subsidies for their mates. We also have an amendment that is going to require the government to provide more detail on the amount of subsidy spending and who it has gone to—simple, basic transparency. Finally, we think that, even if this paying money to their fossil fuel mates goes ahead, this fuel security framework absolutely should not kick into action until the Liberal Party has taken some basic steps on electric vehicles. They are very reasonable, sensible steps: asking them publicly, 'What is your strategy on electric vehicles?' and tabling analysis by the Productivity Commission as to how the strategy compares to other countries. These are really sensible, basic transparency and accountability mechanisms that would at least mean that we would know what we were getting for our money. They would at least mean that you'd be able to compare the wisdom of subsidising the production of polluting fossil fuels with the wisdom of investing in clean technology.
Let's be clear. The Greens support fuel security. We want real action to reduce our reliance on imported fossil fuels. We want clear policy, with public consultation, on how we can improve fuel security. But this bill does nothing of the sort. It's handing over $2 billion to fuel refineries. The regulation impact statement didn't even consider the option of encouraging EV. This bill is an embarrassment to the Liberal Party, and we hope that the Senate will be supporting our very sensible amendments.
I move the second reading amendment that's been circulated in my name:
Omit all words after "That", substitute: "the bill be withdrawn and the Senate calls on the Government to divert the full funding amount to a national electric vehicle strategy that includes:
(a) clear consumer incentives to ensure rapid electric vehicle uptake; and
(b) public investment in a national fast charging infrastructure network".
I rise to speak on the Fuel Security Bill 2021. The Australian fuel market operates on a near just-in-time basis and is heavily reliant on global supply chains operating under normal conditions. This helps to keep operational costs low but means the market is very vulnerable to disruptions. In the Northern Territory this near just-in-time was replaced with a 'ran out of time' event, when we actually ran out of bulk fuel. This happened just as I was leaving to come down here for these two weeks of sittings. Just before I left the Northern Territory, we actually ran out of bulk fuel supplies. While domestic users were largely unaffected, motorists did notice a price spike, and industry was forced to jump in and do what industry does, particularly in the Northern Territory, and find a solution. They found the solution by sending multiple road trains interstate to pick up fuel and bring it back to the Northern Territory to supply the bowsers. The federal government was not advised by the Gunner Labor government, as it should have been, on this dire fuel supply situation in the Northern Territory.
The Greens over here don't care about fuel. They don't believe in fossil fuels and they'd like us to stop using them. Perhaps they'd like to come to the Northern Territory and tell the people there that they should run their tractors or road trains on solar panels. And I certainly haven't seen a plane or a helicopter running on pumped hydro. Imagine running an electric helicopter mustering cattle. I imagine you would probably move one beast 20 metres before you'd have to stop and recharge for 10 hours. They also want us to ride bicycles. That's lovely if you live in Sydney or Melbourne or Brisbane; I imagine you can ride a bicycle to the shop. But try telling the people of the Northern Territory that they should complete a 600-kilometre round trip on a bicycle just to go shopping.
An honourable senator: It's a long ride!
Absolutely it's a long ride, and you're not going to carry very much home, so you're going to be cycling to the shops 600 kilometres every day.
So it's obvious to us that maintaining adequate fuel supplies is extremely important, and it's also a responsibility of state and territory governments to not let those supplies run out. In this case, with the Gunner Labor government, it was a complete abrogation of their responsibilities not to, at the very least, inform us of the dire situation the Northern Territory was facing. This issue came about, as things often do, because of a convergence of problems, none of which had been adequately appreciated or understood by Chief Minister Michael Gunner or his government. The problem was that international shipping had been affected due to COVID-19. This, combined with the extra demand from domestic users and people travelling to the Northern Territory as part of their annual holidays because they can't go overseas, so Darwin became their new Bali—which was great—placed a lot of pressure on our fuel supplies.
It was also combined with the fact that there is only one bulk storage facility in the Northern Territory, Vopak, at East Arm port, which meant we sailed extremely close to the red line of empty. In fact, industry went into the red and domestic service stations had only the supplies that were in their tanks at the time. A ship did sail into Darwin Port approximately five days after bulk supplies ran out, but the problem is that, when a ship turns up, it takes another three to five days to have the fuel tested and then unloaded, distributed and settled in tanks before it becomes available to retailers and domestic suppliers.
I've been working with the Minister for Energy and Emissions Reduction, Angus Taylor, to ensure that the Territory does not face these types of issues again due to the fragile nature of our fuel supplies and the behaviour of the Gunner Labor government. The federal government's 10-year comprehensive fuel security package includes a storage program called Boosting Australia's Diesel Storage Program—imaginatively named!—which will see domestic fuel supplies increased by 40 per cent by 2024. Hopefully, as we move into the future with these programs in place, we in the Northern Territory will not face such a fragile environment again.
The fuel security package aims to increase Australia's resilience to fuel supply disruptions, secure sovereign refining capability and keep fuel prices low for consumers. I commend this bill to the Senate.
I can indicate, as the previous Labor speaker did, that Labor will support this legislation. I've listened with interest to the contributions thus far. If you take this issue of fuel security, it really revolves around three central concerns which I think even the Prime Minister accepts are actually national responsibilities. This is a bloke who has ducked most of the responsibility for the core issues of Australians in the course of the pandemic, but I think even he accepts that energy policy, industrial capability and national security are core national responsibilities. After listening to the last two contributions, you can see why the Liberal Party and the Greens can never be trusted on these core national issues.
The bill does involve a substantial subsidy to the two remaining oil refineries. The key question that Australians should be asking, though, is 'What took you so long?' These are sensible measures that should have been implemented when there were four oil refineries—four operating oil refineries—instead of, now, just two. For all of the laps of honour that the government is demanding for taking these measures, it's actually the Australian Labor Party that has been campaigning and fighting to make fuel security a national interest priority.
In particular, I want to acknowledge the Australian Workers Union, who have fiercely advocated for their members in the refining sector for years. Similarly, my old union, the AMWU, has long represented maintenance workers in this sector. As an official I saw very closely what impact the refinery closures in Sydney had on not just the workers. Anybody can do the cheap maths and add up the number of workers and divide it by the package. There are of course the interests of the workers who are directly employed. There are the interests of the subcontractors who work in those facilities—many, many thousands of them. There are the interests of the hundreds of Australian firms in the supply chains that rely upon these refineries.
And then, of course, there are the interests of our future manufacturing capability and our future national security, all of which were entirely ignored by this government until the pressure got too much. Both the Transport Workers Union and the Maritime Union have also been publicly campaigning to raise awareness on these issues.
There are still outstanding concerns. Australia will still be noncompliant with its International Energy Agency obligation to hold 90 days of reserves. Australia will still disproportionately depend on imported fuel from vulnerable supply chains, still leaving us vulnerable to geopolitical tensions. We still lack a strategic national fleet, which leaves us reliant on a fleet of internationally owned, operated and crewed tankers. There is no Australian fleet. In the event of a crisis, the government would not be able to requisition tankers because we don't have any.
The bill has come too late for the hundreds of refinery workers who've lost their jobs and for thousands of direct subcontractors and supply chain firms. They join thousands of workers from Holden and Ford, the shipbuilding industry and rail manufacturing who've lost their jobs as a result of this government's negligence when it comes to manufacturing capability and fuel security. That's tens of thousands of blue-collar jobs and technical jobs—the people who actually wear hi-vis to work and have it as a requirement of their job, not as a dress-up for a photo opportunity. They actually put it on seven days a week, get up early in the morning and go to work.
This crisis has all of the familiar tropes of the Morrison government—an obvious problem left unsolved, ministers posted far above their obvious competence, rank amateurism that cost Australians their jobs, press conferences with little flag lapels and all of the hot waffle that comes along in a Morrison press conference, saying the word 'sovereign' over and over again while trying to look tough—
You are absolutely right. The Prime Minister wraps himself in the flag and overuses these words over and over again but never, ever delivers in the national interest. He talks about it, but he never, ever delivers. It's all about the announcement, never about the follow-through. It's political fixes to systemic problems. It's absolute failure of leadership from the top down. Policy after policy, they're dragged kicking and screaming to the most basic of solutions. Then they celebrate like they've won the World Cup.
The government has been warned for years that fuel security is a matter of national importance. The question is: why did it take them so long to act? In 2013, Air Vice-Marshal John Blackburn, retired Deputy Chief of the RAAF, warned that:
… Australia has small and declining fuel stocks—about three weeks' worth of oil and refined fuels.
His report described long maritime supply chains for liquid fuels, supply chains that run through a number of conflict zones and vulnerabilities to trading systems, shipping ports and refineries. He concluded:
If a scenario such as a confrontation in the Asia Pacific region were to happen, our fuel supplies could be severely constrained and we do not have a viable contingency plan in place to provide adequate supplies for Australia's essential, everyday services and for our military forces.
What did the government do? Nothing. It wasn't the last time this issue and Air Vice-Marshal Blackburn were going to be ignored. In June 2015, the Senate Standing Committee on Rural and Regional Affairs and Transport tabled its report into Australia's transport energy resilience and sustainability. Their first recommendation was:
… the Australian Government undertake a comprehensive whole-of-government risk assessment of Australia's fuel supply, availability and vulnerability. The assessment should consider the vulnerabilities in Australia's fuel supply to possible disruptions resulting from military actions, acts of terrorism, natural disasters, industrial accidents and financial and other structural dislocation.
What happened? Nothing.
In March 2018, the Parliamentary Joint Committee on Intelligence and Security recommended:
… the Department of Home Affairs, in consultation with the Department of Defence and the Department of the Environment and Energy, review and develop measures to ensure that Australia has a continuous supply of fuel to meet its national security priorities.
What happened? Nothing, diddly-squat. Later that year, Senator Molan began publicly criticising his own government's failure to hold fuel reserves in Australia. He told Alan Jones, correctly: 'The vulnerabilities are very, very high. It is a critical national security issue.' He's been publicly criticising them ever since, and he hasn't been the only one. You can't find somebody in the defence and national security institutions that doesn't think this is a critical issue that has been ignored year after year.
In 2018, the International Energy Agency published an in-depth report on the Australian energy policies. It found:
Australia is the only IEA country which is a net oil importer and solely relies on the commercial stockholding of industry to meet its minimum 90-day stockholding obligation under the International Energy Program. The country does not have public stockholdings and does not place a minimum stockholding obligation on its domestic oil industry.
What happened in relation to that finding? Absolutely nothing. In April 2019, the Department of the Environment and Energy indicated that Australia had a reserve of 18 days of petrol, 22 days of diesel and 23 days of jet fuel. What happened when this obviously urgent state of affairs was revealed to the government by its own department? Nothing—no policy change, no administrative action, no substance, nothing. The only thing that could get anyone in this eight-year-old, tired, ineffective government even mildly interested in fuel security was the possibility of controversial oil and gas projects.
In 2019, the then resources minister, Senator Canavan, cynically tried to use fuel security to open up oil exploration in the Great Australian Bight. Air Vice-Marshal Blackburn, who had now been lobbying for this issue to be taken seriously for five years, said of this obvious political grandstanding:
Guaranteed flow of oil is what's important, and its stock holding is the spring in the supply chain when it goes on and off … The Government has done little or nothing to guarantee this.
Year after year, the government has been warned that we are facing a problem as a nation. And year after year, this government, the Morrison-Turnbull-Abbott-Truss-Joyce—and the other guy, what's his name?—McCormack-Joyce government, has done nothing. It took an utter crisis for the government to act, and, in the intervening period, half of our oil-refining capability in Australia has gone, disappeared for good. And these guys want to do a victory lap. The government hasn't had a real energy policy for eight years. This crisis came along, and they've had to jerry-rig something together.
The government announced a comprehensive fuel security package in September last year. Nothing guarantees that something's not comprehensive like when the government announces that it is. The government said:
The government is committed to a sovereign onshore refinery capacity despite the threat to the viability of the industry.
Minister Taylor said: 'Our fuel security package will keep fuel prices for Australian consumers amongst the lowest in the OECD. It will create around 1,000 new jobs and protect the existing jobs of our farmers, truckers, miners and tradies.' Do you know how long it lasted? It lasted just three days. Three days later, BP announced the closure of Australia's largest refinery, in Kwinana. In December, there was another announcement. Minister Taylor announced:
… the government was taking immediate and decisive action to keep our domestic refineries operating.
Why does anybody pay any attention to what Minister Taylor or Prime Minister Morrison say? It's all about the spin. It's all about the announcement. Two months later, after this breathless announcement from Minister Taylor, ExxonMobil announced that they were closing their refinery in Altona—350 jobs lost. So, one announcement lasted for three days and the other one lasted for 60 days. Within six months of the government's comprehensive fuel security package—so-called—half of Australia's refineries had announced their closure. So now we've got another package—more press conferences with monogrammed hi-vis being worn by ministers hoping to line up with the Prime Minister for another photo shoot. It's the old nick on and then nick off, from the Morrison government! And the government wants to be congratulated for finally dragging itself, over eight long years, to a basic modicum of a fuel security package that will achieve about half of what is required.
Labor will support this piece of legislation. But we will point out that this government ignores the advice, that they are hostile to the experts, that their incapacity to develop an energy policy framework does real harm—not just to household bills, by driving the price of energy up, and not just to manufacturing jobs, by reducing investment certainty, and not just by making it harder for businesses to invest in the kind of industry that creates good jobs. It does real damage to our national security. This is a government that's entirely lost its way—it lost its way a long time ago—and the Australian public should send this government packing at the next opportunity they have, and get a real government who will actually deliver a national fuel security framework, a manufacturing framework that actually might create a few decent jobs and lift our national capability, instead of pushing it backwards. (Time expired)
I stand to speak on the Fuel Security Bill 2021. I indicate up-front that I'll be supporting the bill but I, like Senator Ayres, share concerns about the way in which we got to this point. I'll go back to 2000, when we imported 60 per cent of our liquid fuels. By 2013 the demand had grown and basically we'd seen our production drop—substantially reduce—and had moved to 90 per cent importation of our liquid fuels. That's the state that we're in. Back in 2012 we had seven refineries. By 2015 that had dropped down to four.
That was at about the same time that the Senate started looking at things in relation to fuel security. I refer back to the Rural and Regional Affairs and Transport References Committee's inquiry into Australia's transport energy resilience and sustainability. The alarm bells were ringing back then. We could see what was happening. We were importing most of our fuel, and we saw our number of refineries decrease substantially, to where we had only four. And it was at that time that we started looking at the numbers of days of fuel that we had available in stock, here in this country. The government will try to claim that they're meeting some of their international obligations—the 90-day obligation—by saying, 'We've got fuel in ships, on the way.' But that's not allowed to be counted—and sensibly not allowed to be counted—because it's not on hand, not fuel that you have available. Many things could happen that could disrupt that fuel in making it to Australia. So, properly, we should not count that.
That was the situation. We've seen some other reviews. We've had joint parliamentary and House committee reviews into fuel security. One of the recommendations that came from those committees was that there ought to be a liquid fuel security review, which has occurred and it sat on the minister's desk for two years. For two years it sat there. I looked at my notes over the last week or so and I did actually FOI that document, but the claim was that it's a cabinet document. I'm now seriously starting to doubt that claim—that a document sitting on the minister's desk for two years is destined for cabinet. What sort of responsiveness are we getting from the government to all of this?
Perhaps another sign of where we had some difficulties was back in 2018. There was a great international military event, the Pitch Black exercise. It ran over three weeks, from July through August 2018. We had 16 different air forces there. We had 140 aircraft. Our military were conducting exercises, preparing for defence-of-Australia type activities, working with other air forces, working with our allies. And what happens? We run out of fuel. We ran out of fuel because a ship that was supposed to be coming from Singapore didn't turn up. So we had to end the exercise early. Now, if that wasn't a signal that there was a problem, then I don't know what sort of signal you can expect.
Maybe a pandemic helps you realise that supply lines can be interrupted. Supply lines can be interrupted even by way of border closures. We were just hearing of the refinery shutting down in Kwinana—Western Australia's supply. You'll also recall, during the pandemic, that Minister Taylor announced that he'd bought into reserves in the United States. I asked some questions about this strategic oil that we'd purchased. In answers that I got from Minister Taylor, he revealed the arrangements. He said the arrangements between the Australian and United States governments were not legally binding, not treaty-level agreements; instead, they were a lesser government-to-government arrangement.
Both governments had agreed the text of the arrangements, but that remains secret. We have not seen what that agreement is. The Australian government won't be tabling the text of the arrangement in the parliament, I was advised, and there will be no review by the Joint Standing Committee on Treaties. We went off and purchased $94 million worth of fuel to stick in tanks in Louisiana. So our strategic reserves sit 14,000 kilometres away. Seriously? Is this a government that doesn't appreciate what happens in time of conflict? We've already heard Senator Ayres telling us that we don't have ships with an Australian flag on them. So we can't really control what happens, as we might do in wartime or a time of conflict, to get that fuel that is in Louisiana back to Australia. Sure, we got it cheap. We all remember the negative price of fuel, I think, that occurred throughout the pandemic. But it doesn't help us in having fuel here in this country.
I do support the aim of this bill. This bill does a couple of things. One of the things it does is put a minimum storage obligation on refineries, on importers and on storage companies, and that's a good thing. Indeed, the government has announced $200 million to assist companies to build up their storage capability, and that's a good thing. I'm not standing here saying we shouldn't do what we're doing; I'm just standing here saying we're not doing enough. We've got, at best, to be generous to the government, about 30 days of fuel. If something happens, we have the Liquid Fuel Emergency Act, which allows the minister to intervene in the market and preserve our fuel for essential services. But anyone who knows anything about this topic will know that those powers are brought on very slowly. Through the normal course of use, we would probably run out of fuel before all of those powers kicked in.
We have a real problem. We have a national resilience problem. I'd like to think that, if supplies were cut, we would have 90 days of fuel like we are required to have so that we could keep our economy running, so that we could move across to various different measures to make sure that our economy ran to the extent that it was possible—certainly to make sure that essential services were available and that our Defence Force didn't run out of fuel. These are important issues. These are the sorts of issues that one would expect the Liberal Party to be good at. They're normally very strong on defence, but they've ignored this. Senator Molan has stood up and said stuff about this, bravely, in the face of his own party's failure to do anything. This is a really important issue.
The other part of the bill is to assist refineries. Remember: there were four refineries when the announcement was made, but two of them have said, 'No, sorry, not interested.' We have to rely on the two ASX refineries. They have said that they're going to stay, but we have to assist them to make sure that they stay on Australian soil. I support us assisting those refineries, but there's an amendment that I'm going to move to this bill. The amendment says that the government needs to provide a plan, which it has to table in 2023—in a couple of years time—that says what happens after 2027 and after 2030, which is the maximum extent to which the refineries can rely on the assistance. I want to know that. I'm not trying to be prescriptive and say, 'You've got to tell us what Senator Patrick wants to hear.' I'm not asking for that. I just want to know what the government's plan is. Does it intend to continue supporting the refineries? If the refineries are going to leave, how are you going to manage stock? They have some elasticity about them, because there's an in-feed to the refinery, and, as long as that's full, we've got fuel coming out the other side that's available for Australians to use.
I want to know how you intend to transition away from fuels that are, potentially, not stocked here in Australia. If we're not prepared to have 90 days of fuel, then we need to make sure that our country is running on things like electricity, hydrogen and ammonia. We need to think about shifting some of our transport from road to rail or from rail to coastal shipping. We need to have a plan. It's a novel concept to have a plan about energy security for this country! I know I've got some support amongst the crossbench—and I'm hoping I'll get Labor's support for this—but I hope the government itself will say: 'You know what? Having a plan is not a bad idea. Having a plan that we can put out in the public domain, where people can contest it and maybe enhance and improve it in some way, would be a good thing.' I'm told the government is not going to support it. The government does not want to have a plan, which is consistent with everything that's happened to date. We've just stumbled along. We didn't wake up when we couldn't properly fuel an Air Force exercise, embarrassingly, and we haven't really learnt from the pandemic.
The measures in this bill are important. They are a step, but in no way could they be considered a comprehensive plan to deal with our fuel security. It is a really important issue. I've looked at the United States strategy papers on how they might tackle a war with China. Do you know what their strategy is? They're going to cut off fuel through the Strait of Malacca and across the Stan countries, the pipelines, and they will probably take out the fuel supplies of China using cruise missiles, possibly launched from submarines. But the point is the US strategy is to starve China of fuel. That's what they intend to do, and the Chinese are very alert to this. They know that's a weakness. They refer to the Strait of Malacca as their Achilles heel. It is a huge problem for them. They're thinking about it. The United States is thinking about it. Yet we look at our own fuel security and we're not prepared to have a robust discussion, a robust debate. We're not prepared to act when the signals have been there, whether it is the 2014 Senate inquiry, the House inquiries or the NRMA funded study that looked at fuel security. With all these things—Exercise Pitch Black, the pandemic—we are skating on thin ice and not reacting properly.
I will be moving an amendment during the committee stage that requires the government to lay out a plan. How sensible is that? How sensible is the idea that we would have a plan about energy security and that we'd put it out into the public domain so industry could see it and the public could see it and we could all talk about it? But I fear the government is not going to support that.
I want to rise and commend the government on this very important bill. It is so important for our fuel security, for our energy security and for our national security. As a very proud Geelong based senator for Victoria, I was delighted to join energy minister Angus Taylor a few weeks ago in touring Viva Energy's Geelong refinery to celebrate this wonderful package, which has delivered such a massive win for Geelong workers. The Geelong refinery is home to some 700 local jobs. It is now playing a pivotal role in Australia's fuel security, as it produces half of Victoria's fuel.
This package is so vital for the Geelong refinery and for manufacturing workers. To those opposite, particularly to Labor senators: the AMWU and the AWU have worked you out. They were rolling their eyes. There has never been any such proposal from Labor when it was in government. Only the Morrison government is delivering this security, through a variable fuel security service payment, funded by the government, which recognises the fuel security benefits that our two refineries provide to all Australians; up to $302 million to support major refinery infrastructure to deliver better production and better quality fuels, bringing that forward by three years; and the $50.7 million for the implementation and monitoring of the payment, which includes a minimum stockholding obligation.
This is an incredibly important bill for our nation. We heard nothing from Labor last year when the lockdown, month after month in Victoria, brought Viva Energy and the Geelong refinery to its knees. We saw none of the so-called empathy for manufacturing workers when Mr Marles declared that the end of thermal coal would be a good thing. We have seen policy after policy from Labor which demonstrates it does not care about energy security. The carbon tax, the 50 per cent RET, the 45 per cent emissions reductions target—in all of these policies, union members across this country have worked out that Labor has deserted them. Even the Andrews Labor government, when it was asked to make a contribution to the Geelong refinery, turned its back on one of Geelong's most important manufacturers. This is a very important piece of legislation. It will make a huge difference. I commend these bills to the Senate.