Australia strengthens fuel security with new US deal

Australia and the United States have signed a milestone Arrangement this week to bolster Australia’s access to emergency oil supplies in the event of a major global disruption.

The Arrangement will allow Australia to lease space in the US Strategic Petroleum Reserve (SPR) to store and access Australian-owned oil during a global emergency.

Energy and Emissions Reduction Minister Angus Taylor signed the new Arrangement with US Secretary of Energy Dan Brouillette during the Minister’s visit to the United States yesterday (March 10).

The Arrangement stems from discussions between Prime Minister Scott Morrison and US President Donald Trump in Washington last August.

“This landmark Australia-US Arrangement represents our joint commitment to maintaining fuel security and improving Australia’s resilience, as well as strengthening the close bonds between our two great nations,” Minister Taylor said.

“The Strategic Petroleum Reserve is the world’s biggest emergency stockpile of oil. The US is a trusted ally which has been essential for global oil security and we are glad to be building on our strong, longstanding relationship, while ensuring Australia is best prepared to act during a global oil disruption.”

However, the Australian Trucking Association says the Australian Government should not have agreed to lease the space in the US Strategic Petroleum Reserve and should, instead, store an emergency reserve here.

“Liquid fuel is critical to trucking and critical for our economy. This is both a national economic issue and a national security issue,” said ATA boss Geoff Crouch.

“The United States is on the other side of a very wide ocean. The arrangement to meet Australia’s fuel security obligations by tapping into the US reserve is simply not realistic,” he said.

At the end of 2019, Australia had just 24 consumption days of petrol and 22 consumption days of diesel in stock.

“Angus Taylor has previously stated that it could take up to 40 days for fuel to make its way from the US to Australia. That’s up to 16 days that Australia would be brought to a standstill with no access to fuel,” Mr Crouch said.

“Without trucks and the fuel that powers them, Australia stops. As most commodities produced or consumed in Australia are delivered by road, no fuel means supermarkets would go empty, medicines wouldn’t get delivered and rubbish bins wouldn’t get emptied,” he said.

The ATA and its members have been campaigning since 2014 about Australia’s fuel security and in 2019 made a detailed submission to the liquid fuel security review, concerned the government has unrealistic expectations about what would happen in a fuel shortage emergency.

“We’re calling for domestic fuel security as well as the need to address the legal uncertainties that trucking businesses would face if expected by government to prioritise the delivery of particular goods during a fuel emergency,” Mr Crouch said.

“During a fuel emergency, there would be no guarantee that trucking businesses would have the commercial ability to implement government priorities. With our supply chains increasingly operating on a just-in-time delivery model, once trucks stop we quickly start running out of consumer goods,” Mr Crouch concluded.