By Nichola Davies
With Australia’s fuel security at crisis point, Energy Minister Angus Taylor has revealed the Morrison Government is in talks with the Trump Administration to buy some of the US’ oil reserves.
Australia has signed an agreement with the International Energy Agency (IEA) to store enough fuel for 90 days – a target that hasn’t been met since 2012. Current reserves of petrol and crude oil are at 28 days.
The purpose of having domestic fuel reserves is to ensure price stability and curb the need to ration supplies, should an event such as war occur in the oil-rich Middle East.
Mr Taylor says the government is locked in “constructive discussions” with the US for the right to access its Strategic Petroleum Reserve (SPR).
America’s SPR is stored in underground salt caverns in a government complex along the Texas and Louisiana Gulf Coast. Salt formations are the cheapest, most environmentally safe way to store crude oil. It’s the largest supply in the world with the capacity to hold 727 million barrels. The current inventory is approximately 649.1 million barrels. Each barrel contains 159 litres.
Mr Taylor said it would take from 20 to 40 days for barrels of America’s crude oil to reach Australia’s shores, which would then need to be processed.
“Access through a contractual arrangement would greatly boost our stocks and flexibility of supply,” Mr Taylor said.
Labor has argued that borrowing oil from America isn’t the same as having domestic fuel security.
“I’ll tell you what would shore up Australia’s fuel security, and that’s to actually have fuel security here in Australia,” Opposition Leader Anthony Albanese said.
“So a strategy here, not a strategy that says if we run out the US will send us some in support.”
Mr Taylor has also said he wants the IEA’s treaty that sets the 90-day term to be rewritten, so fuel that is in transport on its way to Australia will be taken into account.
The 90-day figure is to ensure domestic demands are met, as well as having enough to release to the global market in case of the event of natural disaster or conflict.
Mr Taylor has made no mention of establishing a biofuel industry in Australia to support domestic fuel supplies, despite a number of successful biofuel projects in Australia.
The Clean Energy Finance Corporation has identified the potential for bioenergy more broadly in Australia is as much as $5 billion.