No government-mandated strategic reserve supply of fuel
by staff writers
A former army Chief turned senator has warned that the Liberal and Labor policies of turning Australia into a service nation could leave us vulnerable to attack from near neighbours.
The loss of any ability to manufacture on a medium scale, basic motor vehicles, parts or advanced weaponry and the inaction of government over a mandatory fuel reserve storage plan could halt any prolonged military protection for the nation by our troops.
Free trade has sounded the death knell for most Australian industries and the petroleum refining industry is no exception.
The Australian Institute of Petroleum says the domestic context of high operating costs, ageing facilities, increasing sea miles for the transport of crude to the refineries, shallow berths that are not suitable for large crude carriers, increasing technical complexity needed for refining of the broad range of crude oil and the high Australian dollar, put Australia at a competitive disadvantage, resulting in the closure of some domestic refineries that are no longer commercially competitive.
Jim Molan was the chief of operations for coalition forces in Iraq and will enter the senate next month, replacing former deputy Nationals leader Fiona Nash who was forced out due to dual citizenship.
He has issued a stark warning about Australia’s readiness for war, saying the armed forces could be ineffective within 19 days if current stockpiles of petrol, diesel and aviation fuel run dry.
“We are almost unique throughout the world in that we don’t have a government-mandated strategic reserve of fuel,” Senator Molan said.
“There are things that we can probably never build in this country, such as the Joint Strike Fighter and the most advanced missiles,” he continued.
“But we should guarantee their delivery to Australia — which you can rarely do — or we should have them in warehouses.
“Unless we have a plan to get them when we need them … then I, as an ex-military commander, wouldn’t want to cross the start line in doing something militarily unless I had those warehouses behind me.”
The 2016 Defence White Paper warned Australia’s dependency on fuel imports was a risk given tensions in the South China Sea, which is a major shipping route.
US military assistance not guaranteed
Senator Molan has also warned that military support from the US is not guaranteed and the Federal Government needs to be more prepared.
“Australia should be thinking about the level of defence expenditure that we are prepared to commit ourselves if America was the centre pole of our defence policy and now may not be as strong as it once was,” Senator Molan said.
Senator Molan said US Defence Secretary James Mattis has raised concerns about the readiness of the US military’s readiness for war.
“That should be ringing bells all over the world,” Senator Molan said.
Half of Australia’s fuel is imported- five refineries left
The Petroleum Institute has thrown its weight behind imported fuel claiming the closure of the refineries will not lead to negative price outcomes for consumers. Australian fuel prices reflect an import parity price, which is the price in international markets.
The Australian Competition and Consumer Commission was clear in its advice to the API committee that as a result of import parity pricing, the retail price for petrol is not impacted by refinery closures.
Australia can source its liquid fuel needs from a diversity of sources so that if one source becomes unavailable other sources can meet demand according to the committee report.
Following the closure of the Clyde and Kurnell oil refineries, refinery capacity in Australia will decrease about 28 per cent and leave five operating refineries.
Domestic refiners will produce just over half the fuel consumed in Australia with the remainder being imported. Consequently, concerns have been raised about the viability of Australia’s oil refinery industry, and the potential impacts of declining domestic refinery capacity on the economy, energy security and employment in the sector.
The most pessimistic view was that this is the beginning of the end of Australian refining, and the most optimistic view was that there is a future for Australian refining, albeit under increasing competitive pressure.
The committee noted that during the last decade the oil industry has invested over $9 billion in its Australian refineries.
The Liberal and Labor free trade mantra has all but destroyed our once great manufacturing base. No cars, no parts, no tyres, no fuel, no white goods, no military aeroplanes, no guns, only minute amounts of ammo, no boots, clothing or equipment for the military. All of it is imported.