When I was a child, every year, at the beginning of December, we went to the Geelong oil refinery in Corio. The refinery fire truck was cruising around, flashing its lights and giving out gifts to us, the children of the employees. Now it looks like Christmas has come early for oil refinery owners who have secured a massive fossil fuel subsidy accompanied by a “national security” bow.
The federal government has announced a fuel safety package to support Australia’s two remaining oil refineries, in Geelong and Brisbane, with a hefty price tag of up to $ 2 billion.
Australia’s response to fuel safety has been a mishmash of ineffective policies and taxpayer-funded subsidies, and this week’s announcement is another band aid. It fits perfectly into the budget alongside the $ 8 billion in fuel tax credits (which are expected to drop to just under $ 10 billion in five years).
It’s worth asking what the Australians are getting for the $ 2 billion, which equates to $ 80 each of us at these two refineries. If this is a matter of national security, why has the federal government not taken a national stake in both facilities, rather than leaving the shareholders of Viva in Geelong and Ampol in Brisbane to care to decide what to do?
The idea of not being sure about foreign oil is… well, a foreign idea. Australia is an energy superpower in every other way except oil. In 2019 Australia was the world’s largest coal exporter, and the largest exporter of liquefied natural gas (LNG) and, together, is the third largest exporter of fossil fuels after Russia and Saudi Arabia. But Australian oil production has already peaked and will likely continue to decline.
According to the Federal Government’s Interim Liquid Fuels Safety Review in April 2019, “Australia is heavily dependent on imports of liquid fuels, and that is unlikely to change.” Australia imports about 90% of its fuel safety needs. This includes 60% of our refined product and 80% of the crude oil that enters our domestic refineries. And even if all of Australia’s local oil were refined for local use, that would only meet about 25% of our needs, according to the government’s own interim report.
And that’s when Australia had four oil refineries. Now there are only two left. And we still haven’t seen the final version of this Liquid Fuels Safety Report. I doubt we’ll ever see him.
Because the only long-term solution is to get rid of oil and electrify our transport.
Sadly, the same federal budget that offered billions to our oil refineries did nothing to reduce demand through incentives for electric vehicles. Not a cent. Three quarters of Australia’s total liquid fuel demand is consumed by the transport sector. The transition from transport to locally produced (and increasingly renewable) energy rather than foreign oil would clearly be a victory for national fuel security.
But Australia remains behind in EV policy and adoption. The government’s recently released Future Fuels Discussion Paper does little to encourage the adoption of electric vehicles, instead excluding policies that work like incentives to buy electric vehicles, targets for electric vehicles. fleet purchasing and vehicle CO2 standards.
According to Energy Minister Angus Taylor, short-term subsidies for electric vehicle purchases are not good value for taxpayers, unlike multibillion-dollar subsidies for oil refineries. Oil refineries get an entire carrot farm while EV politics get the stick.
The government’s approach to transportation is very similar to its approach to power generation: it is focused on greater supply (fossil fuel) and ignoring efforts to meet demand. It took years to get a change in the electricity market rules that allowed users to be rewarded for reducing their electricity use during peak demand periods rather than creating more supply. .
The lack of any federal interest or leadership in EVs has left a void. The Victorian-era treasurer is filling that void with a tax on electric vehicles, which would only boost demand for fossil-fueled transportation. Following a sharp setback, Victoria has put in place modest incentives to drive adoption of electric vehicles and a target of 50% electric vehicle sales by 2030.
Australia’s piecemeal approach to fuel safety is unsustainable. It was around this time last year that Taylor spent $ 94 million stockpiling oil reserves safely stored in… Texas. A year later, as Americans desperately panic and buy fuel in the wake of the Colonial Pipeline cyberattack, Australia’s offshore stock looks silly, unsure.
The only viable long-term solution to our liquid fuel insecurity is to get rid of fossil fuels. Instead, we distribute documents to them for taxpayers. The point is, electrifying our transportation system would be a gift to the nation that continues to give.