NRMA ‘Running On Empty’: Australia’s Worrying Dependence On Foreign Fuel Photo:
Trevor Collett | Feb, 28 2014 | 6 Comments

A new report from the NRMA titled ‘Running On Empty’ has highlighted the vulnerability of Australia’s fuel supply.

The motoring group says our dependence on imported transport fuel has risen from 60 percent in 2000 to 91 percent last year; and it could soon be close to 100 percent.

The report says Australia is the only International Energy Association member that does not meet its 90-day fuel stock obligation, with stocks falling to 60 days at May 2013 from 71 days in October 2012.

If deliveries ceased tomorrow, it is estimated that fuel supply in service stations for domestic use would dry up in just three days.

This would be followed by a flow-on effect to pharmaceutical goods and food supplies in supermarkets, after seven days.

Some outback communities would also grind to a halt, as they are almost entirely reliant on diesel-powered generators to produce electricity.

It’s not hard to believe these claims. Eastern Australia was quickly hit with fuel shortages in October last year when Cootes fuel delivery tankers were ordered off the road. Then, service stations up and down the east coast were running out within a few days.

That scenario has been repeated this month, with more Cootes tankers grounded and service stations in Eastern Australia once again running out of fuel.

Worse, Australia's exposure to foreign market influences has contributed to record-high prices this year and in 2013, including record-high LPG prices despite healthy gas reserves in Australia.

The NRMA is calling on the Federal Government to make 2014 the year that Australia secures fuel supplies for the future, via the Government's National Energy Security Assessment.

"It's not too late for Australia to take steps that would help secure Australia's transport energy future," NRMA Director Graham Blight said.

"We have held roundtable [discussions] with industry stakeholders including unions, fuel companies and transport organisations who have agreed that we must urge the Australian Government to take action. We do not want to scare people with our report, but facts are facts.”

Mr Blight said that Australians need not wait for government action, as the report recommends a shift from road transport to rail and a greater use of locally produced fuels, such as biofuels and LPG.

"The technology being developed for electric vehicles has advanced considerably in the past five years with the emergence of longer battery life, more charging stations and fleet trials by businesses and governments,” Mr Blight said.

"There are answers right in front of us to help secure our transport energy future that complement larger scale solutions, such as stopping the closure of refineries and increasing our stock of oil within our borders.”

The report predicts Australia's remaining five refineries could be closed by 2030, leaving the country almost 100 percent reliant on imported oil and facing a potential liquid fuel security crisis.

High production costs in Australia haven’t just claimed the scalps of Holden, Ford and Toyota.

Refining infrastructure in Australia is rapidly ageing, increasingly uncompetitive and uneconomic.Shell’s Geelong refinery is on the market, and BP may sell refineries in Queensland and Western Australia, along with 225 company-owned service stations.

Top to bottom, from the refinery to the bowser, it is an industry facing rapid change. And neither the Federal Government nor the ACCC have managed to find the reins.

Collectively, BP and Shell have recently announced intentions to sell off a combined $6 billion in Australian assets. This will likely result in increased concentration of ownership into large super-sites and away from smaller independent operators.

Australia has already seen service station numbers drop from 20,000 in 1970 to just 6300 in 2011.

The report from the NRMA might, at the least, suggest that it is time for a rethink on Australia's fuel security and energy future.

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