MARK RILEY: Bill Shorten’s $20 billion a year plan to solve Australia’s fuel woes as war uncertainty continues

Certainty and security are deeply intertwined principles. One cannot survive without the other.

But both are victims of Donald Trump and Benjamin Netanyahu’s war with Iran.

Including in Australia.

Uncertainty about Australia’s fuel supplies is leading to a growing sense of insecurity among voters.

And when voters feel insecure, governments should worry.

That is why Anthony Albanese has embarked this week on the first of a two-stage mission to South-East Asia to secure fuel supplies for the coming months.

With continuing uncertainty over the fragile ceasefire in Iran, it is crucial that Albanese’s mission succeeds.

And it is likely that it will.

Australia is in a strong negotiating position.

Our Asian neighbours need our liquid natural gas as desperately as we need their petrol.

Australia is the largest provider of LNG to Singapore, a city-state that runs its electricity system primarily on gas.

And Singapore provides us with 55 per cent of our petrol, 22 per cent of our jet fuel and 15 per cent of our diesel.

The mutual benefits of keeping that two-way trade going during a fuel crisis are obvious.

The same applies to Malaysia, where Albanese is expected to visit some time soon to secure a similar gas-for-petrol deal.

Energy Minister Chris Bowen says Australia has secured enough fuel to see us through May. Albanese’s mission should stretch that horizon out through June and July.

That certainty should help to soothe some of the voter insecurity.

But Australia’s heavy reliance on imported fuels has revived an important debate about the country’s long-term fuel security, which the Government needs to resolve — and fast.

The greatest lesson of COVID was that countries like Australia must build their sovereign capabilities to protect their people in times of crisis.

The Iran War has magnified that. Particularly on fuel.

Four of Australia’s six oil refineries closed down between 2014 and 2021.

The Government is quick to blame the then-Coalition governments, but the real villain is capitalism.

They were all commercial decisions.

It became economically unviable for the refineries to continue in Australia when refining oil in Asian centres was so much cheaper.

It should be no shock to anyone that big oil companies like Exxon, BP and Caltex aren’t charities. If they can make billions more by relocating their operations to another country, they will pack up shop and ship out.

The two remaining refineries in Brisbane and Geelong only continue because of massive taxpayer subsidies, which have been recently increased to encourage them to stay longer.

The capital cost of opening or reopening a refinery and the inability to compete with low-cost Asian operations make it exceedingly unlikely that any new Australian ventures will emerge.

But there is another option for securing Australia’s sovereign fuel supplies. And it is sitting on the Government’s desk.

Bill Shorten went to the 2019 election with a 10-year plan to gradually increase Australia’s national fuel reserves to meet the International Energy Agency’s 90-day recommendation.

The plan centred what Shorten called government-owned “tank farms” which would more than replace the storage capacity lost with the closure of the refineries.

Most fuel would still be refined overseas, but more of it would be stored here as a buffer in times of crisis.

Shorten also proposed that the government own and run a strategic fleet of merchant ships that could operate commercially in normal times and be called upon in a crisis to run fuel supplies into and around the country.

The then-energy minister, Angus Taylor, wasn’t a fan of the Shorten plan.

He said it would cost “tens of billions of dollars”, which he said would have to be paid for through a new “fuel tax at the bowser”.

But Labor’s then-shadow transport minister was an enthusiastic supporter.

That shadow minister? Anthony Albanese.

He’s not so enthusiastic now. Echoing what Taylor said at the time, Albanese told the National Press Club last week that Shorten’s plan would cost about $20 billion a year.

He said the Government would do what it could to increase fuel security “but you’ve got to look at opportunity costs as well.”

Many on Albanese’s backbench, though, now believe the Shorten plan should at least provide the basis for a new discussion on increasing our domestic reserves.

In a world of increasing uncertainty, they believe bigger reserves will deliver them greater political security.

Mark Riley is the Seven Network’s political editor