Doubts over Australia's fuel security as bureaucrats admit not knowing reserves

Heath Aston
February 6, 2015
The Age
Senior government bureaucrats have admitted they do not know how many days worth of fuel is stored in Australia, raising further concern about the nation’s fuel security and vanishing refinery capacity.
Department of Industry and Science officials were admonished by senators from all sides of politics at an inquiry into fuel sustainability after they initially claimed Australia had 55 days worth of fuel but then conceded they did not know and that stocks could actually be closer to 34 days.
Countries including Japan and the US have a mandated 150-day minimum fuel supply in storage and more when crude oil stocks are considered.
But Australia now imports 91 per cent of fuel as refined petrol after refineries were closed down.
Industry Department associate secretary John Ryan acknowledged there was no government policy on keeping a minimum fuel reserve in Australia or any level of refining capacity that must be retained.
Australia relies on a single mega-refinery in Singapore for half its unleaded petrol supply.
When pressed, Mr Ryan conceded that no one actually knows what stocks are kept because the monthly data collected by the department is voluntary and some fuel importers choose not to contribute statistics.
The department wants to co-ordinate with Customs and the Australian Tax Office to get more accurate statistics.
Liberal senator Bill Heffernan then accused Mr Ryan of having “no bloody idea” of fuel reserves.
“If tomorrow ISIS lands and blows up the Singapore [refinery] … the next day we are going to say ‘shit, how much fuel have we got in Australia’ and we will not know, will we?”
Mr Ryan replied: “No, that is right. I cannot.”
But senators were even less impressed when Mr Ryan and his departmental colleague, Gino Grassia, general manager of the energy security branch, backpedalled on their original assertion of a 55-day current supply.
They conceded that would be under petrol restrictions. For example, during the 1974 oil shortage, fuel was rationed, with motorists allowed to fill up every second day depending on whether their numberplate began with an even or odd number.
Mr Grassia said at “average daily consumption” the national fuel stock was closer to 34 days – which he again conceded was an imprecise estimate.
Inquiry chairman Glenn Sterle told the officials they would be called to appear in front of the committee again and he would expect them to be better briefed.
“To be real honest with you, the way that you say ‘maybe’, ‘sort of’ and ‘don’t know’, all I see now is a waste of Senate resources and time. Sorry, gentlemen, you have not briefed yourselves well enough for this. I think you should take stock and we will call you back again,” he said.
On Wednesday, Senator Heffernan said he was “appalled” by the performance but said the bigger issue was the nation’s ill-preparedness for any threat to supply.
“We don’t have a contingency to run ambulances or police. Fuel companies said, “It’s not up to us, make your own plans’,” he said.
Senior executives of Caltex, BP, ExxonMobil and Viva Energy – the company that bought Shell’s Victorian refinery – faced the committee.
They submitted an industry-written information sheet that stated: “Australia does not have a transport fuel reliability or security problem.”