Think-tank The Superpower Institute has warned Australia’s oil reserves may not be enough to fulfil local diesel and petrol demand amid a political scramble for sovereign refining capacity.
Aussie motorists copped steep price rises in the wake of US President Donald Trump’s war in the Middle East after Iran closed key oil transit route the Strait of Hormuz.
Prices at the bowser rocketed nearly 60 cents pet litre in Perth from February to March, according to FuelWatch.
The energy shock sparked hot debate about the long term decline in Australia’s fuel stockpiles and forced Prime Minister Anthony Albanese to negotiate supply deals across major Asian trading partners.
Just two petrol refineries are operational in Australia after a flurry of closures in recent decades caused by poor economics and strong competition offshore.
It has led to calls for a new refinery to be built with Commonwealth Government backing.
Yet even the petrol that is produced in Australia is largely reliant on imported crude oil — about 83 per cent, according to The Superpower Institute’s analysis.
The thinktank is pushing for increased electrification to reduce petrol demand and development of low-carbon fuels including biofuels. An example of low carbon fuel would be BP’s stalled sustainable aviation fuel plant planned for Kwinana.
“The Hormuz crisis is the most significant energy shock on record,” Superpower Institute chair Rod Sims said.
“Australia now has the incentive, the capability and clearly the technology to wean itself off foreign fuels.
“If Australia wants to achieve fuel security this latest research shows there is only one path forward. We no longer have to be held hostage to global crises when it comes to securing our fuel supply.”
He said “Australia’s crude oil resources are extremely limited”.
The thinktank pointed to research by GeoScience Australia which shows the country has about 7,500 petajoules of oil reserves. That’s enough to supply the nation’s full needs for just four years.
An estimated 10-times more could be available through unconventional drilling, including shale fields, but these were expected to be uneconomic. That means a higher oil price or taxpayer subsidy would be needed to make the projects viable.
Oil’s more challenging economics mean the fuel attracted limited investment in Australia in the past 25 years. Yet close to $300 billion flowed into developing an LNG sector through the same period and exports of gas have become one of the country’s top money earners.
Mr Sim’s Institute calls for governments to back charging infrastructure for heavy vehicles and pump cash into backing lower carbon fuels.
The Federal Government pledged almost $15 billion in May to buy more fuel from overseas suppliers and fund an increase in Australia’s fuel stockpile to cover 50 days of demand.
Australia was not the only country buffeted by higher bowser prices due to the war. America’s petrol price reportedly soared as much as 50 per cent by mid-May.
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