A recent study has highlighted a critical vulnerability in Australia’s energy security, revealing that the nation possesses a mere 68-day reserve of liquid fuel. This poses a significant risk in scenarios where external supplies are severed, compounded by the country’s growing dependence on imported transport fuels.
This concerning shortfall stands against the International Energy Agency’s (IEA) directive, which mandates member countries to maintain a reserve equating to 90 days of net fuel imports.
According to a report by the Australia Institute, the government attempts to supplement its fuel reserves by factoring in an additional 21 days’ worth. However, this includes fuel still en route to Australia, often aboard ships stationed at international ports—predominantly foreign-managed vessels.
The report warns that during a crisis, there is no certainty that this transit fuel would reach Australian shores in time.
Furthermore, tapping into U.S.-based fuel reserves, should the need arise, would present a significant delay. The report concludes that transferring reserves from the U.S. to Australia would take more than three weeks, challenging timely crisis management efforts.
The Australia Institute has warned the nation only has 68 days of liquid fuel to keep the country going in the event of a crisis that cuts off our supply
The report warns that Australia needs to reduce reliance on oil and encourage the uptake of electric cars
‘In the event of a global emergency, there is no guarantee the oil that Australia has been promised access to in the US would be practically accessible from across the Pacific or otherwise,’ said researchers.
The Australia Institute’s climate and energy program director, Richie Merzian, said Australia’s continuing dependence on liquid fuels represented a major energy security risk.
‘Australia has a national security problem when it comes to transport fuels. It’s worrying that Australia is almost entirely reliant on foreign oil for fuel consumption, leaving it ill-prepared to deal with international disruptions,’ Merzian said.
‘It should concern every Australian that 91 per cent of Australia’s fuel – like petrol and diesel – is linked to imports and most of that is used for transportation.
‘The federal government failed to deliver its final Liquid Fuel Security Review in 2019, and since then Australia has become more, not less fuel insecure,’ Merzian added.
The Australia Institute’s report recommends that the federal government should be looking to introduce measures that reduce the country’s reliance on fossil fuel supplies, including supporting the uptake of electric vehicles.
‘The Australian Government has no plan to electrify Australia’s vehicle fleet and does not provide direct financial incentives to reduce the cost of EV purchase,’ the report says.
‘Policies such as rebates or grants, tax breaks, and conversion bonuses for trading in old diesel or petrol vehicles are among the incentives that should be considered, alongside introducing fuel efficiency standards and incentivising transition for heavy diesel vehicles.’
‘Australia Institute research shows that the majority of Australians support policies to support EV uptake. Demand-side solutions to liquid fuel security, such as moving to EVs, are needed to significantly reduce our vulnerability.
‘Australia’s energy security policy should consider demand for oil and seek to reduce demand through the uptake of electric vehicles,’ it concludes.
Merzian says that the only ‘long-term’ solution to avoid rising petrol prices is to encourage the switch to electric vehicles.
‘High petrol prices are already hurting Australians. The only long-term solution is getting off oil. This involves increasing fuel efficiency and transitioning to electric vehicle,’ Merzian said.
‘Australia is an international laggard when it comes to fuel efficiency. Weak fuel standards and an absence of a national electric vehicle policy leave Australia among the least fuel-efficient fleets in the OECD, and far behind the rest of the world in electric vehicle uptake.’