Our Biggest Threat !

We have just had an example of how an unexpected world event can disrupt the Australian economy and this has turned the spotlight on our vulnerability to any interruption to the world oil supply.  The Coronavirus threw millions of people out of work and while parts of the world are making a slow recovery we are yet to see the worst of this pandemic in some countries.

The majority of our oil is refined overseas and imported into Australia.  We have an obligation by way of our membership of the International Energy Agency to hold a reserve in this country  to insulate us against any interruption to the world supply.  That reserve has been allowed to recede beyond its critical point because we have an understanding to dip into the American strategic reserve in a world emergency.

The stability of America is now under question since this " Black lives matterv " issue has brought raging mobs onto American city streets. The Australian government is urgently seeking to improve our holding of oil products. We need local storage for between another seven million and fifteen million barrels of oil stored locally to meet that quota.

That has started a frantic search for any unused liquid storage sites ariound the country and probably means we need to build some new facilities.  Our commercial transport system relies heavily on oil and the supplies that reach Australia travel through congested sea areas which are claimed by many nations.  Any commencement of hostilites could see these sea routes blocked.

There is an expectation that we are about to be less dependent on oil once the electric car replaces the internal combustion engine, but commercial transport within Australia will continue to need oil.  Much of the railway system runs on disel electric trains and heavy road transport is mostly oil based.  Without transport our food supply distribution would quickly come to a halt and oil is of critical importance to maintain our defence needs.

Our entire economy is critically based on a reliable supply of oil products and that is going to continue until well into the fuiture.  Our safety relies on a peaceful world and that is determined by events that are far outside Australian control. We need an onshore strategic reserve to tide us over should world events lead to some sort of economic blockade.

That comes at a bad time with governmenrt expenditure pushed to the limit to get the economy moving again after the virus lockdown, but an interruption to the oil supply isprobably the biggest danger we face in an increasingly hostile world.  This oil threat is something we ignore at our peril.  It has the capacity to bring Australia to a standstill.