Fuel Security

The PRESIDENT: The Hon. Mr Pangallo. This is your pre-maiden maiden speech.

The Hon. F. PANGALLO (15:36): Thank you, Mr President. I rise to speak about Australia's, and in fact South Australia's, fuel security crisis. If Australia were driving a motor car right now the vehicle's fuel gauge would be flashing near empty. In fact, we have been driving dangerously close to running on empty for nearly two decades.

Today, Australia has 22 days of crude oil supply, 59 days of LPG, 20 days of petrol, 19 days of aviation fuel and 21 days of diesel. Australia is the only member of the International Energy Agency which consistently fails to meet its obligatory 90-day domestic liquid fuel holdings, while our demand for fuel continues to increase. Petrol, diesel and jet fuel account for 98 per cent of our transport needs.

I have been unable to get a breakdown of what is available in South Australia, but if it reflects the national picture, and it may not, we are three weeks away from a calamitous shutdown of our transport networks, businesses and our very way of life—in fact, probably even this place. That is how reliant we are on imported liquid fuel supplies, which totals more than 90 per cent. A calamitous situation is not out of the question; if not a natural disaster of some kind then a confrontation in either our region or the Middle East could severely constrain our supplies, much of which come from Singapore, which in turn relies on the Middle East for its crude supply.

The possibility of a confrontation is real. We have already had the Cold War chills from North Korea and there is the elephant in the South China Sea, or maybe I should say the giant panda in the South China Sea, China, and its military/naval build-up around a group of disputed islands as tensions rise between the US and its allies, including Australia, over freedom of navigation in these disputed waters. An escalation could see shipping lanes affected, even closed.

Here is how serious the situation could become in the event of a confrontation that could last weeks: Australia's Liquid Fuel Security Report stated that Australians would suffer food shortages, be unable to access medical services or pharmaceutical supplies, be unable to get to work and, if it were protracted, would not have a workplace to go to.

Of course, there are emergency procedures that would come into play. If fuel rationing is needed during a liquid fuel emergency some essential goods and services need to continue to be made available and be exempted from rationing, and they include defence services, ambulance services, corrective services, fire and rescue services, police services, public transport services, state emergency services, or equivalent organisations, and taxi services.

However, Australia has no legislation that requires the government to maintain an emergency fuel stockpile. We also do not have bilateral agreements to stockpile. Our dependency on fuel imports has grown from 60 per cent in 2000 to the 90 per cent level it is at today. Alarmingly, there is no plan to stop our dependency on imports reaching 100 per cent if the last of our few existing refineries close down, or to halt further decline in our fuel security.

As Air Vice-Marshal John Blackburn AO pointed out in his comprehensive reports for the NRMA Motoring and Services on Australia's liquid fuel security in 2013 and 2014, there has been no public government policy on maintaining a minimum level of oil refining capacity in Australia. In other words, there has been no plan B and no contingency plan in the event of any major disruption to our supplies. Australia has sadly been complacent, and I am sure its citizens would be horrified to know the true extent of the situation. We saw that with our blackout a couple of years ago.

Air Vice-Marshal Blackburn's recent report strangely fell on deaf ears until this week when the federal government belatedly announced it would be conducting an urgent review of our fuel reserves. This is a good step, but it will take a year to get the recommendations of that review. The energy minister, the Hon. Josh Frydenberg, also promised his government would take another eight years for Australia to comply with the requirements of the International Energy Agency. That is a long time to wait when there are things that still appear unstable in our region or—

Time expired.