Putting this Nation at risk !

Australia is an oil producing country, but we are fast losing the capacity to refine that oil into the petrol, diesel and aviation fuel we need to keep our transport industries moving.  The economics of the refining industry favour the giant refining plants located overseas and as our smaller facilities close we become a nation that relies on the shipping trade for our fuel security.

That is an unacceptable risk because if some world event closed down those sea lanes this country would quickly grind to a halt.  Under International agreements we are supposed to have a ninety day fuel reserve but the latest survey shows that this has shrunk to just forty-nine days.   The latest figures are alarming.  At present Australia holds just twenty days of petrol usage at the current demand rate,  twenty-one days of diesel and nineteen days of aviation fuel.

Fortunately, our refined products come from forty-seven different countries spread around the world and at any time there are up to forty-five oil tankers on their way here with twenty days supplies of fuel in their tanks, but it is an inescapable fact that we are vulnerable to any outbreak of hostilities that interrupt world shipping.

That should focus Australia's attention on the events unfolding in the South China Sea.  China claims sovereignty over most of this stretch of water and has created dredged islands in the Spratly chain.  It often reaches flash point when naval ships of other nations pass through what the World Court has defined as International waters, rejecting that claim by China.   Now the Chinese have installed missile technology on Fiery Reef,  Subi Reef and Mischief Reef, enabling it to threaten other users if it tries to implement its claim with military force.   The chance of a clash with the United States navy has been steadily growing.

Apart from the huge disruption to our domestic economy an interruption to our fuel supplies would wreak havoc with our defence posture.  There is no point in having an advanced army, navy and air force if we lack the fuel to enable them to protect our country, or assist an ally overseas.   The South China sea is one of the worlds major transport corridors and its closure to all shipping in a conflict would be catastrophic for Australia.

This situation is entirely governed by money.   Those giant refineries overseas can refine oil products more cheaply than the old and diminutive by comparison facilities we have here in Australia.  The oil majors are not prepared to renew and expand facilities here, so they are being closed down.  We are not far off being entirely devoid of refining capacity.   That would be a sorry day because our defence capability would entirely rely on overseas goodwill to remain effective.

Perhaps we may have to pay a few cents more at the petrol pump to keep refining capacity active in Australia, but it would keep fuel security in Australian hands.  We would be foolish to rely on the expansion of electric cars to reduce our petrol needs because that is unlikely to apply to the military or to aviation or heavy transport in the immediate future.  It is a fact of life that the crude oil we gain from the ground in Australia is of little use without the ability to refine it to the products that keep transport moving.  We should legislate to prevent further refinery closures !