Key points:
- Australia imports 90 per cent of its oil needs from overseas suppliers, with much coming from China
- Defence experts say the reliance leaves Australia’s economy critically exposed to supply disruption
- Fears of conflict in the Asia-Pacific have led to calls for Australia to speed up its shift to EVs, green transport
Defence analysts have called for Australia to speed up its transition to electric vehicles and other forms of green transport, saying the country’s heavy reliance on imported oil is a “massive” security weakness.
John Blackburn, a retired air vice marshal, said the national economy would “grind to a halt” within weeks of a disruption to fuel supplies given 90 per cent were brought in from overseas.
His views have been echoed by the Australian Strategic Policy Institute, which said the rising risks of a war in the Asia-Pacific region meant that shoring up Australia’s energy security was becoming increasingly urgent.
The comments come amid heightened concerns about energy security around the world after Russia launched its bloody invasion of Ukraine last month.
Mr Blackburn said the turmoil in Ukraine had shone a harsh spotlight on Europe’s dependence on Russian oil and gas, which he said gave Moscow the ability to strongarm opponents of his war.
‘We’re buying a lot from China’
He said Australia’s almost total reliance on foreign oil was just as big a weakness — if not bigger — and would hobble the country’s capacity to function in the event of supplies being cut.
“Over the past couple of decades, we’ve gone from actually processing a lot of our own oil with, say, seven refineries, to a situation today where only about 10 per cent of all our transport fuels come from Australian oil that’s refined in the last two remaining refineries,” Mr Blackburn said.
“That means we’re 90 per cent import dependent.
“The problem then is all the fuel and oil that comes to us comes on foreign-owned or foreign-controlled ships.
“We don’t have any Australian flagged ships that can move it.
“And we’re not only dealing with foreign companies, we’re dealing with foreign governments.
“We’re buying a lot of our fuel off China, the country that we’re worried about.
“So, we do not have good energy security as it relates to fuel and that’s a problem.”
Michael Shoebridge, the director of defence, strategy and national security at ASPI, said Australia could bolster its position by processing more domestic oil and gas.
But longer term, Mr Shoebridge said there was a pressing need to fast-track the adoption of green transport to help Australia wean itself off imports of fossil fuels, particularly oil.
Green power ‘harder to disrupt’
Mr Shoebridge said renewable energy would help strengthen the resilience of Australia’s economy and defence forces by reducing their reliance on fragile supply chains.
“As the world economy shifts away from fossil fuels and refined products towards electrification, the defence forces of the world that are dependent on getting supplies wherever they operate … will find it harder to source the volumes and kinds of fossil fuels that they want,” he said.
“The flipside to more renewable power that’s available domestically and less reliance on imported petroleum and diesel products, is to turn our strategic location and vulnerability to extended supply chains to an advantage.
“So it turns the current vulnerable energy supply into a positive because it’s much harder to disrupt a strong local renewable energy system.”
Mr Shoebridge acknowledged that demand for EVs in Australia had been relatively modest to date, with sales representing just a fraction of the overall car market.
But he said consumer attitudes would inevitably change as EVs became cheaper and better.
As such, he said it made sense for governments led by the Commonwealth to prepare.
“Australians are catching up very quickly with the decisions of the world’s major car companies,” he said.
“They used to invest about $20 billion annually in developing next generations of petrol and diesel engines.
“No car manufacturer is finding an easy business case to spend money to develop future generations of fossil fuel engines.
“That’s a radical change.
“And it’s because they’re trying to shift as rapidly as possible to reinvent themselves as electric vehicle manufacturers.”
Opportunity in vulnerability
Western Australia’s Hydrogen Industry Minister, Alannah MacTiernan, said the case for Australia to shift away from imported oil was overwhelming.
Ms MacTiernan said WA was particularly vulnerable to a supply shock, given its only oil refinery had recently closed and it now imported 100 per cent of its needs.
As a result, she said the state last year brought in 6.7 billion litres of diesel, which was used to power mining and resources companies that were vital to the national economy.
“Quite clearly there is a massive vulnerability,” Ms MacTiernan said.
“But it’s also an extraordinary opportunity.
“The ability we have to generate renewable hydrogen right across the state for diesel replacement is probably one of the most exciting opportunities we have here in WA.
“At the same time that we’re working on the decarbonisation of our economy we could be massively improving our fuel security.”
Mr Blackburn said it would take decades to transform Australia’s transport industry and encouraging the uptake of EVs would only be part of the solution.
Security as critical as emissions
Mr Blackburn said wider changes were required including fuel standards to ensure oil stocks were used more efficiently, efforts to develop hydrogen-powered trucks and trains, and investment in biofuels that could replace conventional oil.
On top of this, he said it was necessary to try to strip the politics from the debate about EVs, arguing they were hampering rational long-term planning.
“We hear a lot of politicians talk about ‘electric vehicles, it’s all about emissions’,” he said.
“Well, it’s important to talk about emissions.
“But I tell you what, it’s also very important for our security as a nation, our independence because we’ll have control over the energy source for our transport.”
Mr Blackburn said Australia faced a clear choice.
“We need to have a think … are we still happy to be purchasing as much of our fuel off the Chinese government on the one hand — and that’s growing over time — and on the other hand we’re talking about buying nuclear submarines because they’re a threat,” he said.
“I mean, there’s a bit of a disconnect here.”
Extracted from ABC