A Very Bad Idea !

We live in a dangerous world.  Not only can cyclones disrupt shipping traffic and delay the arrival of imports coming to this country, any outbreak of hostilities in the supply chain have a devastating effect on the liquid fuels that serve our economy.  We should be aware of the tensions present in the South China sea, through which most of our exports and imports travel.

Under our agreement with the International Energy Agency (IEA) Australia is supposed to have a ninety day fuel stockpile on shore and ready to serve us in an emergency.    We are falling short on that commitment  with only a twenty-five day supply of car fuel on hand and enough crude oil for a thirty day period.  At the same time we are closing down our refining capacity because doing that task is cheaper in the big refineries with their higher capacity based in Asia.

Not only is our commerce at risk in this situation, a lack of fuel would seriously limit our ability to defend Australia.  High proficiency ships and planes simply stand idle with a shortage of fuel and all our military forces are  dependent on fuel to get them to where they are needed.  Without adequate fuel we simply do not have a defence capacity and ninety percent of our needs are imported.

Rectifying that omission by building adequate storage facilities would cost millions of dollars and the government is considering avoiding that cost by entering into an agreement with the United States of America.   That country is served by vast fuel storage facilities under the title of the " Strategic Reserve " held in a network of underground caverns in Texas and Louisiana.  There are 640 million barrels of oil held in that reserve.

Under this agreement, Australia would add the oil necessary to meet that IEA commitment to storage in America, and many thinking  people would see that as a dumb idea.  We would be putting the defence of this country entirely in the hands of the US government because the oil reserves Australia would need in an emergency were not on our shores, but overseas and subject to the whim of whatever administration was in office in that country.

We regard America as a friendly nation, but if our oil reserves are based in America they need to be shipped here in an event of an emergency and that delivers both a risk and a time delay that defeats the whole concept of a fuel reserve.  The vast number of other world countries far exceed Australia in the volume of oil they hold in reserve, in their own jurisdiction and ready to keep their county running during a fuel emergency.

Even considering such an agreement is a stop gap measure to avoid the cost of building adequate storage here in Australia.  There is no point in having a multi-billion defence force if it would be brought to a standstill in a fuel emergency.   In fact, Australia as a nation would come to a halt if the pumps at the service stations across the country ran dry.

This fuel reserve must be located here - in Australia and on Australian soil !