Climate Champion Australia Begs the USA for Fuel

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Guest essay by Eric Worrall

When green virtue signalling goes bad.

Australia looks to access US fuel reserves to shore up supplies amid Persian Gulf tensions

By political reporter Jane Norman

Australia is eyeing off the United States’ tightly guarded fuel reserve as it seeks to overcome having less than a third of the stocks it should.

Key points:

  • Australia has less than a third of the fuel supplies it is required to under an international agreements
  • Defence Minister Linda Reynolds said the Coalition was eyeing off America’s tightly guarded reserves
  • It comes as Australia considers sending vessels to the Persian Gulf amid escalating tension

It comes as Australia contemplates sending vessels to the oil-rich Persian Gulf amid escalating tension on the Strait of Hormuz. 

Australia holds just 28 days’ worth of fuel imports, well below the 90-day minimum required under international agreements.

Rather than buying and storing the required amount of petroleum domestically, Defence Minister Linda Reynolds said Australia was seeking to access America’s emergency supplies. 

“The Government is in the early stages of very constructive discussions with the United States about the potential to access their strategic petroleum reserve, which would greatly boost our own stocks and also the flexibility of supply,” she said.

It is unclear how much it would cost Australia to tap into the US reserve, but Energy Minister Angus Taylor said it would be cheaper than creating a “physical” reserve here.

“The whole point of this is to minimise costs,” he said.

Critics of this approach argue economics should not be the sole consideration when it comes to national security.

Australia’s four oil refineries produce about half of the country’s transport needs, which means the other half comes via shipments from the Middle East and Asia.

Read more: https://www.abc.net.au/news/2019-08-05/australia-looks-to-buy-us-oil-amid-reserve-concerns/11384196

I must say its awfully nice of the USA to consider letting Australia freeload off your strategic reserves. But this ridiculous situation would likely never have arisen if politicians hadn’t made such a mess of Australia’s domestic energy policy.

Australia has substantial energy reserves. But they are mostly still in the ground, and likely to stay there for the foreseeable future; Australia’s hardline green state governments have made exploration and development of new fields very difficult.

South Australia recently blew up their last coal plant. The plant was still viable, but its existence offended South Australian politicians. Other coal plants are scheduled for closure, and are not being replaced. States are increasingly relying on gas and “emergency” diesel generators for electricity when the solar panels and wind farms fall to deliver.

The result is ongoing shortages and capacity problems.

Australia is woefully under resourced when it comes to domestic refining capacity, so even if we started pumping more oil and building new refineries, it would take years to build enough domestic refining capacity to process the additional oil.

I might be Australian but I’m disgusted at the recklessness of our politicians, and their arrogant assumption the USA is always ready to ride to our rescue and have your generosity abused, because our politicians think expecting the USA to foot the bill of maintaining strategic reserves and not pass on the cost is an acceptable way to treat an ally.

Update (EW): Updated some wording for clarity.
Update (EW): Added John Tillman’s link to Australia’s substantial energy reserves
Correction (EW): David Middleton points out the substantial energy reserves article I quoted was PR puff from a failed resource company. However there are substantial resources. From the Australian government;

Crude Oil, Condensate and Liquified Petroleum Gas
Australia’s crude oil resources, located mostly in the Carnarvon and Gippsland basins, are only small by world standards but are boosted by substantial condensate and LPG resources associated with the major largely undeveloped gas fields in the Carnarvon, Browse and Bonaparte basins off the northwest coast of Western Australia. A number of sedimentary basins remain to be assessed. Australia also has significant oil shale resources, especially near Gladstone, Queensland that could provide additional liquid fuels if developed.

Read more: https://www.ga.gov.au/scientific-topics/energy/basics
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160 thoughts on “Climate Champion Australia Begs the USA for Fuel

    • You’d be surprised how often California has set national policy in the past. Based just on economics, it’s difficult to ignore CA when they put down a mandate on a product that is sold across the country. It’s usually just a matter of time after CA has come up with one idea or the other before it’s adopted as a national standard.

    • I’m Australian, and I hope that’s the short answer from their “constructive talks”. Our pollies are particularly reckless and dumb. Let them eat cake.

      • “their arrogant assumption the USA is always ready to ride to our rescue and have your generosity abused”

        There is no such thing as a free lunch, and no one will be getting”free” help from USA. There are always a whole bunch of strings attached and a price to be paid for any agreement made.

        Aussies will end up getting drawn into US conflict in the Gulf as the price to pay for being protected from the effects of the US conflict in the Gulf.

        It is ridiculous that a country with natural resources of Australia is not capable of looking after its own needs.

    • Absolutely. Tell them to dig up their own oil first. Then we’ll talk. What a bunch of marones!!!

    • Indeed. Perhaps they should consider substituting their strategic wind reserves and see how far that gets them.

    • If Trump really is a good negotiator and strategic planner, the oil should come with strings attached. It is in America’s self-interest for more refineries to be built in democratic countries. I suggest that he get a commitment from Australia to build more refineries, and to use American companies to build it.

    • Linc Energy went bankrupt in 2016. What they found were a few oil shows in the Arckaringa Basin… There are no “reserves”… just possible resource potential that no one else thinks is worth pursuing. Linc Energy press released the hell out of this back in 2014-2015, because they were in deep financial trouble.

      https://www.vice.com/en_au/article/wdaz85/link-energy-found-233-billion-barrels-of-oil-in-the-australian-desert-then-went-bust

      https://www.reuters.com/article/linc-energy-bankruptcy-idUSL3N18B072

    • The problem has never been the oil itself, it is that there isn’t a big enough market to have a refinery the population is only 26 Million. The labour and transport costs in Australia make it impossible for a refinery to export or supply all parts of Australia at a competitive cost. So the only refineries that exist were built in the 70’s. The oil use in the meantime has gone up 1.3% per year since 1975 and that is how you get to that position. It has nothing to do with any green agenda it’s just basic supply and demand economics.

      • Nevertheless the current situation is ridiculous. Australia has 28 days of reserves, a sudden upheaval which interrupted supply could be devastating.

      • There is not national security without energy security and Australia’s people are going to suffer unless a solution is found. Think of what could have been done to gain that security with the money spent on “renewables” over the last decade. I guess lots of people have forgotten running vehicles on charcoal and coal gas as some Australians and others did during WW II. http://robertsarmory.com/gas.htm

        • i know OF it but not how to do .
          and then
          it was done when cars were repairable at home
          these new plastic electronic controlled UN touchable to repair heaps of crap they call a car now would be useless to retrofit
          you cant even access the trans to top up the fluid on many.
          i really regret having to part with my old bluestreak 6cyl wolseleys

      • well if we IMport half or more than we DO have the ability to increase or our market at home for sales
        meanwhile out fuels got massive tax and we pay the singapore market prices??

    • yeah they raved that up bigtime for months and then sweet fa mention after
      of course using american companies which would NOT do us any good profits wise.
      and we are the worlds largest EXporter of natgas!!!
      but?
      OS corps do the extraction and WE MUGS didnt make sure OUR supply was ensured OR build storage for it
      nooo we pay some of the highest home gas and car fuel prices while we sell it to china and elsewhere for a pittance.
      ditto the darwin/wa sales and offshipping.
      we have NOT had any storage worth the name for many decades the war yrs we had some but ??if thats still useable tanks wise
      been a long time prob not maintained if not wrecked n ruined after the war yrs?
      not sure why Mobil really shut down Pt Staqnvac in sth aus decades ago
      suspect greentards beginning- as well as the push for grabbing every industry and pushing them out to gain land for housing developers to make a buck. I know it sat vacant for some time and Mobil copped big bills for rehabbing before they populated it.
      amazing how many living there dont know it WAS a refinery site.
      we do NOT need moratoriums on on land frakking lifted…we have enough in UNpopulated areas and offshore
      if USA has to make a min of $70 a barrel MIN to break even?
      then at 67c to your $ now add our MUCH higher min wage of 25 n hr for unskilleds all our taxes n charges theres no way it will be profitable.

      funny thing?
      theres a pile of other coalmines up in qld starting up BUT Adanis the only one theyre aiming at still..
      great for power gen BUT we cant run our cars on it.

  1. As Eric Worrall says, many Australian politicians are nothing more than professional drongos elevated to their positions by the Party Apparatus. They know nothing of science, economics or the problems faced by normal citizens.

    • For non-Aussies: (Courtesy of Google)

      The word drongo is used in Australian English as a mild form of insult meaning “idiot” or “stupid fellow”. This usage derives from an Australian racehorse of the same name (apparently after the spangled drongo, Dicrurus bracteatus) in the 1920s that never won despite many places.

      An apt description for many of the political persuasion

      • Sounds like political jobs there are filled much like they are here in the US – the political parties select WHO is to do the job not whether or not they CAN do the job effectively – and then the voters are told there are no other choices. The situation is worse when one party controls a region for a long time.

        • Or, in the case of the EU, politicians with a proven record of incompetence are chosen as leaders by an opaque process for the sole purpose of deflecting adverse comment from the authoritarian bureaucracy where the true power lies.

    • There is no oversight by any Australian politicians on strategic reserves … read again it is simply a breach of international agreement. Someone in the industry bothered to check supplies is the only reason we even knew about it. So the politicians once aware of the problem are trying to fix it for the lowest cost, personally I don’t have an issue with the approach. There would be dozens of these sorts of old school agreements that Australia would be in breach of.

      • Goodness me, these reserves have been low since about 2012; politicians were aware of the problem then if they took the time to read ABS reports. Maybe they can’t read. If you think attaching ourselves to reserves half way across the world is a solution, then bravo. When the sh– hits the fan, the country will have ground to a halt before anything is shipped from USA, diesel stocks are just over two weeks stock, every truck and most trains will stop; good luck buying anything you need , like food maybe!!

        • you got it. tankers coming across oceans that are rather easy for others to find n remove permanently.
          once you could store 44s of petrol for some time
          now it seems to go “flat” within a month or so. something theyve changed in the mix I gather.
          diesels ok n most farms still hold tanks but less than before due to costs and the following theft due to the high prices
          its at 1.67 a litre locally now at the pump
          I can fill both my tractors for 100 or so and thatd give a decent amount of runtime but i sure cant install a storage tank

    • Nicholas? I am going to have to assume that you have never actually been inside Parliament House Canberra and never walk the corridors or cut through the ministerial wing.

      I am going to assume that because if you actually had been inside APH there is no way you would still be referring to our elected elites in such polite terms.

      Like the saying goes, the less you know about the manufacture of laws and sausages, the better you will sleep at night.

      So yeah, I have trouble sleeping and I LIKE sausages!

    • I think Mr Worrall has got its wrong! “many “politicians” are nothing more than professional drongos elevated to their positions by the Party Apparatus.” There, fixed it! 😉

  2. As you mentioned, the request is more about refining capacity (a commercial decision) than energy policy.

  3. This might not be a bad idea. We could charge them by exchange, their coal for our oil for the first delivery. We could then transform their coal delivery into fuel for their next order and sell it back to them at an increased rate for profit.

    • West Virginia, Kentucky, and other states out west say “We don’t need any Australian coal, thank you.”

      Cold hard cash is what I’d be asking for.

  4. This is a silly article. Australia isn’t begging for fuel. It is the world’s largest exporter of natural gas. It has become a net importer of oil, although there is still substantial local production. And it is, of course, a huge exporter of coal.

    What the ABC article is about is not production, but the amount held onshore in storage facilities. Australia hasn’t spent enough to build the storage required by some international agreement, according to the article. So we’ll have to spend more, or get the US to cover (but not send oil). This has nothing to do with production.

    • If you clicked the “ongoing shortages” link you would have seen this article;

      Local Gas Shortage Threatens Australia’s LNG Dream

      Australia, which last year in November overtook Qatar as the world’s top LNG exporter, will now need to start importing the commodity as some parts of the country face a shortage of natural gas.

      As the International Energy Agency put it last year, “Increasing LNG exports have created a tight supply in Australia’s eastern market, which is characterized by weak regulation, poor transparency and low liquidity. Market inefficiencies need to be addressed swiftly and transparency improved rapidly for domestic consumption and LNG exports to successfully coexist.”

      Yet there was also another reason for the shortage that is looming over southern Australia, and it is an overestimation of the gas reserves that are being exploited there. Australian consultancy EnergyQuest last month warned in a report that Queensland would need to shut down a third of its US$59-billion (A$84 billion) LNG production capacity because the resources will run out faster than initially expected.

      “Crunch time is expected by 2025 and will be exacerbated by potential political pressure for Gladstone LNG operators to divert gas to the domestic market,” the consultancy also said.

      The likely explanation why the resources are running out “faster than expected” has nothing to do with available reserves.

      Gas ban inflating Victoria power prices

      The “Gas ban” is the State of Victoria’s ban on onshore gas exploration and drilling, and state government hostility to fracking. Victoria is not alone in this attitude.

      Like I said, the problem has nothing to do with reserves, everything to do with political stupidity.

      • Increasing LNG exports have created a tight supply in Australia’s eastern market, which is characterized by weak regulation, poor transparency and low liquidity. Market inefficiencies need to be addressed swiftly and transparency improved”
        Hear, hear! The exporters find it more profitable to sell to Asia than toi parts of Australia. “Market inefficiencies” need to be addressed swiftly. We are producing plenty; someone wrote contracts to export even more than we produce.

        None of this has anything to do with the provision of strategic storage that the ABC article was about.

        “Crunch time is expected by 2025 and will be exacerbated by potential political pressure for Gladstone LNG operators to divert gas to the domestic market,”
        Well, yes.

        • Don’t blame the exporters that is the stupid State Governments fault who own the gas. Western Australia has had local supply requirements in all gas exports for decades because our State Government was stupid.

          • Whatever the source of the problem, there are times when the price for Australian LNG exports to Asia are less expensive than pipeline-delivered natural gas in Australia.

      • @ Eric Worrall
        That is an Eastern States situation, in Western Australia and Northern Teritiory we have massive untouched basins. There is also a large untouched supply jointly owned by East Timor and Australia called “Greater Sunrise”.

      • Didn’t the USA’s banning of on-shore oil/gas exploration many years ago lead to the establishments ofoff-shore facilities,like the Deepwater Horizon set up?

        • No. While there are large areas offshore and onshore that are “off limit,” this had nothing to do with Deepwater Horizon (Macondo). The deepwater Gulf of Mexico is one of the most prolific oil plays in the world… second only to the onshore Permian Basin in Texas in US oil production.

          Macondo was an entirely avoidable sequence of mistakes, it was largely the result of “defining deviancy down.”

        • No you can’t… Australia’s net imports are ~ 600,000 bbl/d The purpose of a strategic petroleum reserve is to be able to quickly replace your imported oil for 90 days.

          Current US net crude oil imports are about 4 mmbbl/d…

          Current days of import protection in SPR – At the current level of 695 million barrels, the SPR holds the equivalent of 143 days of import protection (based on 2016 net petroleum imports). Note: The maximum days of import protection ever held in the SPR is 143 days.

          International Energy Agency requirement – 90 days of import protection (both public and private stocks). In past years, the United States has met its commitment with a combination of SPR stocks and industry stocks. The days of import protection may vary based on actual net U.S. petroleum imports and the inventory level of the SPR.

          Average price paid for oil in the Reserve – $29.70 per barrel

          Drawdown Capability

          -Maximum nominal drawdown capability – 4.4 million barrels per day
          -Time for oil to enter U.S. market – 13 days from Presidential decision

          https://www.energy.gov/fe/services/petroleum-reserves/strategic-petroleum-reserve/spr-quick-facts-and-faqs

          • Nick,

            If you diverted 400,000 per day of domestic production into an SPR, you’d have to import 1,000,000 bbl/d instead of 600,000. That’s not going to help if your imports are disrupted.

          • Absolutely,
            To divert ALL domestic production would require eliminating domestic usage for that period of time, or outsourcind ALL domestic usage for the time period. Stopping domestic usage for 135 days to refill your reserves would be detrimental to the nations economy.

          • So, Nick, it seems if you built the storage tanks you could meet the requirement, all you would need is the oil to fill them. LOL.

      • Yes that is the problem production from 70’s refineries has dropped away while consumption has increased. There is no profit in building new refineries because you can’t get enough scale to make the economics work.

        • Crude oil production at the wellhead has cratered… it’s not a refinery output issue.

          • Amazing graph of Australian production. You could label it “Venezuela” change onlt the vertical scale a bit, and it would be entirely credible.

          • My understanding is that, unlike Venezuela, Australia has a generally favorable business environment.

    • “Projected to be biggest gas exporter” this year. Not “is”. And if it indeed is, then it won’t hold that title long, with US production ramping up.

      As noted, why should Oz need to import oil, when developing its reserves could make it an exporter of crude oil and refined products?

      Unless you worry that such increased productivity makes you an even likelier takeover target for China.

      • From Eric’s quote and link:
        “Australia, which last year in November overtook Qatar as the world’s top LNG exporter”

        As David said above, that article about alleged reserves was just desperate nonsense from a company that has since gone broke.

        • Nick,

          That said, y’all have incredible oil & gas resource potential and a relatively good business environment, even better than the US, in some ways… but 400,000 bbl/d sucks… 😉

          • That’s not storage. It’s undiscovered resource potential.

            A strategic petroleum reserve is filled with oil and/or refined products that have already been discovered, developed, produced and put into accessible storage.

            There is nothing strategic about undiscovered resource potential.

        • Most news “articles” about oil & gas, right, left and center, are wrong… or actually not even wrong.

    • Why should they? They probably figure that spending money on building a reserve and refineries is a wast of good money. Since they expect their energy requirements to be totally supplied by renewables in the near future why not let the good old U.S. fill in for ’em until then. That way they can meet their reserve requirements for a few years at no expense to them.

      • Well, firstly, I think the US should and probably will say no. Second I don’t think it would meet the agreement anyway, although someone might agree to fudge it. Third, it isn’t just the agreement. We should, for our own needs, have a strategic reserve held locally.

        • Agreed, Nick, we should maintain our reserve supply.
          The voters of Australia have given no permission to its bureaucrats to break a clear law year after year.
          If the law cannot be obeyed, it needs to be changed.
          If it is unchanged, it has to be obeyed. This is basic to the principle loosely named “The Rule of Law”. Geoff S

          • Geoff,
            It isn’t law. It is an IEA provision – in theory a condition for membership, though I don’t think they are likely to expel anyone over it.

    • Last I read the Austrian navy no longer burns coal and the Army, Airforce and navy are not powered by natural gas. The article is about strategic oil supplies.

        • Borderline Fake News, LdB.

          For every three warships navies typically have one deployed, one in port and the last up on the blocks getting a major refit. Perth is/was getting a major refit.

          The observation of crew shortages is valid and needs to be monitored in the short, medium and long terms, but the ‘can’t go to sea’ claim is grossly oversimplifying the story.

      • Unfortunately, Austria no longer has a navy. Their last naval presence was two patrol craft on the River Danube, but that mission ended on 2006.
        In earlier days, the Austrian-Hungarian Empire did have a navy. One of it’s most famous (to Americans) officers was one Georg Ritter von Trapp. Yes, that von Trapp!
        They made a movie about the whole thing.
        Here is one opening scene:
        https://www.youtube.com/watch?v=5fH2FOn1V5g
        One of the most joyous moments in cinematic history:
        https://www.youtube.com/watch?v=5fH2FOn1V5g

        After their escape from WWII Europe, they eventually made their way to the US. They settled in Vermont and opened a successful ski lodge near one of the big mountains.

    • I agree that the article mixes up a number of issues, some relating to short term security of oil supply in Australia, some to the prudence of Australian resource development policies, and some to the impact of climate-inspired policies on long-term security of power supplies. A point that was not acknowledged was that the United States built up its enormous stockpile of strategic oil reserves during a period when the United States’ net crude oil import requirements were very high. Now, do to the significant increase in domestic U.S. oil production, imports are far lower, and the strategic reserves are far higher than needed. It would make sense in these circumstances for the United States to export some of the crude to Australia and other countries whose supply is potentially threatened by tension in the Persian Gulf. Of course, Australia’s national and regional governments also should not place climate symbolism over domestic energy availability.

  5. So that’s why the uk and its best friend the usa is causing fights with iran, Oil profits…..Ive come to realise the climate bullshit is all about money… The ipcc, and the celebrity get together that just happened in sicily, is nothing but a money making scam.. Why does it cost 20 million to host a climate meeting, yet the uk government could only give 10 million for planet saving trees….

    • “So that’s why the uk and its best friend the usa is causing fights with iran, Oil profits”

      I think you have it backwards, Sunny. It’s the Mad Mullahs of Iran who are trying to cause fights. They are the ones hijacking oil tankers, not the UK or the USA. If they want to stop all their problems, all they have to do is agree that they will not produce nuclear weapons and give the U.S. a way to confirm that they are keeping their word. That’s not very hard. Unless you are a bunch of fanatics detemined to get nuclear weapons for use on your enemies.

      A saying my mother used to tell to me when I was growing up, applies to the Mad Mullahs: You are cruisin’ for a bruisin’.

  6. Hi Eric
    You need to get your people to talk with President Trump and request that he supply to Australia the Sidel Carbon Capture Utilization System. https://youtu.be/RQRQ7S92_lo
    Get your coal fired power plant back up and running, in compliance with the Paris Climate Accord. Your country can’t be without affordable electricity.

    • Looks looks Sid Abma is coming up in the world.
      “Have your people talk to my people”

      get your people to talk with President Trump and request that he supply to Australia

      Looks like he has President Trump on his sales force, Good Going!

    • A gentle reminder that the very name ‘Clean Coal’ is a lie. These processes do NOTHING to actually clean up real pollution. In fact, they often make the process of removing real pollution harder.

      But just as with Europes Diesel infatuation, the Greens don’t care about any of that… at least not until they start choking on the smog.

      ~¿~

    • Sure wonder if that $20 per ton of CO2 captured includes the cost of the fuel used to grow, harvest, transport and process the vegetation along with the labor cost of all the new jobs they claim to create. All those proposed new jobs tickles my BS meter.

  7. You forgot to mention the bans by many states on fracking as well as Victoria’s crazy ban on on shore oil and gas exploration. Talking about emergencies , when does the federal government declare energy generation an essential service ( which it is ) and use federal power to reign in the idiotic leftist states that have destroyed our energy security whilst forcing up prices. Even though the Liberal government doesn’t do enough to fight against in infiltration of green policies affecting our energy security thank God Labor/ greens didn’t get into power. It would have been quite dire.

    • It’s a State government issue there is nothing there is nothing federal government can do about it .. try reading the division of powers between states and federal government. The States own and control all resources in there State not the Federal government … no exceptions.

      • “It’s a State government issue there is nothing there is nothing federal government can do about it”
        On the contrary, the fed controls export permits, which is the base problem here.
        Here is an article from said Ministry setting out their powers, and what they say they could do if they had to. But that is then politics.

        • If they blocked it watch the States immediately launch an appeal to the High Court as they are imposing on there ability to control the resources. It’s never been done because they would almost immediately face challenge unless we were at war.

      • LdB,
        Wrong. There are many ways around this Fededal/State problem. The Federal law will always dominate if there is a discord. Alternatively, there are mechanisms like listing the area on World Heritage lists and imposing Federal conditions. Or arrangements via Aboriginal Land rights, or compulsory land acquisition for defence purposes. I have been involved with each of these as real time examples, so I know how they work in reality, while you seem to be arguing from theory. Geoff S

        • No it is more complex than that the federal law can only override if the States have ceded that power. The list of powers ceded is section 51
          https://en.wikipedia.org/wiki/Section_51_of_the_Constitution_of_Australia
          Section 52 covers disputes and if the powers have been ceded the Federal hold sway.

          World heritage and enviroment comes about because the States allowed the federal Government to enter an International treaty.

          Nick Stokes correctly noted what the federal government could do is use it’s powers under international trade to not allow a State to sell something. However if we were not at war or something like that you would almost certainly face a High Court appeal.

    • Bans by many states on fracking?

      Are you call New York State, “many states”? One state is many?
      New York is the only state I am aware of that bans, recently, fracking.

      • Vermont banned frac’ing too… despite having nothing to frac. I think a few other States have banned it as well… But New York is the only US State, with obvious shale resources, to have banned frac’ing.

      • Pretty sure he was talking about Australian States. Not US ones. As noted by talking about Victoria and the Liberal government and labor parties… none of which exist in the US.

        Some nations call their sub-divisions provinces, but we aren’t the only one to call them states.

  8. Energy shortages and outages are very, very virtuous. Australians should be proud — I am green with envy!!!

  9. US oil ports are at least 15K miles from Australia, or at least 6 weeks at normal tanker speed. A lot of bad things can happen over such ocean distances and time on the oceans, even with escorts (just ask the Japanese). It would be foolish to rely on even free oil from the US in a dire emergency. Far wiser and ultimately cheaper to stock up at home while you can.

    • We physically don’t have storage facilities in Australia for the amount of oil we are talking about. This is going to take a decade to sort out now we are aware of it and so it would be prudent to have a fallback even if it is 6 weeks away.

      • Store the fuel in the tanker.

        Lease tanker. Park tanker offshore until the fuel is consumed. We give you money, you and your ship sit around laughing at us.

        Not saying it is a cheap solution, but it is a solution.

  10. Virtual fuel reserve? What good is a reserve half the world away, especially when they don’t have the means to effectively transport it.

  11. I believe the United States has expressed interest in selling off the U.S. petroleum reserve, so that would fit right into Australia’s plans.

    What’s the idea, to store the oil in the U.S. reserve until needed in Australia?

    I recall someone a long time ago saying it was better to teach a person how to fish, where the person can gain indepence and feed himself, than to give someone a fish and make them dependent on others. Australia ought to learn that lesson. They need to learn how to fish enough to gain their independence.

    • Everything about Australia encourages dependence. Weather it’s credit card debt, Kevin Rudd debt, University debt, roof top solar buy now maybe payoff later debt, house prices through the roof debt, add CO2 costs to everything debt, electricity prices tripling for no good reason, and the massive increase in costs for any construction because of “green”.

      Our system is rigged to keep the populous poor and just surviving day to day, that way we don’t uprise against the government oppression because we’re too busy drowning our sorrows in alcohol with 90% tax or having a cigarette with God only knows tax (probably around 600%).

        • why do you reckon they took the guns away(from the honest people) only the crims who dont care cos they steal not pay have guns pretty much.
          everyone else is tagged ntracked and checked at least yearly

      • If alcohol is taxed at 90%, why not make your own? Potatoes, corn, etc. are relatively untaxed. You do have Scottish and Irish descendants, they can get the ball rolling. They were the basis of moonshine running in the US. My departed father in law ran a small still in a bathroom for a while as a hobby. He also made his own beer. Got drunk one day and set up a beer stand at the street. Funny guy.

        We really still do have moonshiners in the Appalachian mountains, the TV show is crap but the “illegal” activity goes on. BTW, generally the illegal part is sale, not personal consumption.

    • Yes on both counts. Australia doesn’t want to actually store the oil nor does it want it shipped. So US could literally sell it while it sits there and get money for there storage. It is sort of a win/win.

        • I don’t think the U.S. could legally sell oil already contracted to Australia. And I don’t think the U.S. would do such a thing even if it was legal. We actually do have morals and principles and we do take care of our friends.

          It’s the American Left that is totally morally bankrupt. If they were in Office you probably ought to worry about every deal you make with them.

          Let’s hope Conservatives stay in charge in the U.S. from now until the end of time. 🙂

          • The President can authorize SPR sales or loans to allies… Although, these usually are related to emergencies, not p!$$ poor planning.

    • LOL…. as an ex Australian commercial fisherman I can fully vouch for Australia’s utter incompetence in even maintaining a fishing industry….. Nothing to do with fish stocks and everything to do with bureaucracy regulating commercial fishing out of existence.

      When the bureaucratic institutions managing fishing and marine parks consumes more money than the fisheries they regulate produce….. You begin to realize that free enterprise died a long time ago in this country. Australia is an utterly dependent and mendicant society run by bureaucrats who believe utterly that the Welfare state is the future of World society.

  12. PM Morrison rules out USA missile base in Oz, which I am sure that the Americans are not impressed with that kind of language when they are the ones policing the ME from threats of all kind, including from China’s illegal manmade military islands in the South China Sea. I wouldn’t be surprised at all if the unofficial position of the Pentagon and WH is to let the Aussies sweat a little with fuel shortages when its clueless socialists deliberately sabotage their own fuel supplies and destroy operational coal generating assets, while allowing itself to become the global leader of LNG gas export. All this while granting China a 99 year lease for a port in Darwin. Seems there are antagonist forces in OZ sympathizing with the enemy and intent on destroying their own homeland.

    https://www.detroitnews.com/story/news/world/2019/08/05/australia-hosting-us-missile-site/39894241/

    • Australia isn’t of any interest to USA for missile sites put simply we are to far from any target to be of use. We are only just better than a missile base in Antarctica which is about as far as you could get to any value target. What you want is flight time of minutes for missile strikes so the enemy has no time to react.

      • I think it is mainly to protect the Australians themselves from hostile forces like China who think they have already bought and paid for the territories it has already invested so heavily in. It is one thing to not care about your own regional security, but it would be another to expect the USA to try and dislodge the Chinese squatters once they invade. Well, the PLA already has invaded OZ, but they are still in civy clothes and they own a good chunk of it already.

        Just look at what already happened to the EEZ of the Philippines with those 7 militarized man made island fortresses, and now there are millions of Chinese ‘tourists’ already in the Philippines, welcomed by a drug lord narco President Duterte who sold out his country for cheap and is allowing the Chinese to both swarm his countries West Philippines Sea off the coast of Palawan in their EEZ via the Spratly Islands, and now a lot of mainland Chinese who are resident in the Philippines buying up the place in a dizzying pace. While China historically never was much of a colonist power, things are now very different under the Emperor Xi for life, and the PLA sees Australia as an unoccupied continent with maybe 25 million people living on the coasts, (the population of Shanghai) while all the resources the Chinese have bought and paid for might become more difficult to access. The missile base would be for the protection of Australia from hostile forces that would weaken the alliance by invasion.

    • well if the billions spent on your utterly crappy palnes that dont like flying much had actually gotten us some working defence by now..it mightnt be a need at all
      we should have bough Gripens ages ago
      or done as in the war yrs and built our bloody own.

  13. I must admit, Australia is one of the few places I would not mind helping out in an emergency. I guess I see some countries as our siblings – we may get into arguments but we always have each other’s backs.

    But given the nature of China increasing it blue water interdiction capabilities, and the possibility of the U.S. electing another gutless-wonder to the presidency, I would recommend Australia build out its own infrastructure. The U.S. dysfunctional government is just too crazy at this time.

  14. Why are they asking for the USA’s reserves? Oz seems perfectly comfortable buying from OPEC dictatorships instead of developing their own resources, so why don’t they just send more cash that way?

  15. I say “Let them eat cake”.

    As an American, I am getting damned tired of having to bail everybody out and getting a boot in the patoot for it.

    Australia bought themselves into this so let them find their own way out.

    • This wouldn’t be a bailout, it is a straight up sale of U.S. oil to Australia. Australia is paying their own way.

      I don’t think the Chinese are likely to invade Australia at the present time, but putting an American military base in Australia would certainly deter the Chinese if they were thinking along those lines.

      I question China’s military prowess. They haven’t proven themselves on the battlefield in a very long time. Overwhelming numbers and human wave attacks don’t win the battle, as the Chinese found out during the Korean war.

  16. As much as I admire and appreciate the people of Australia if I were in charge I would reject the application.
    This is a case of tough love. Unless you suffer the consequences of stupid decisions, there is no reason to stop making stupid decisions.

  17. Australia has 5 refineries, 2 in Vic and Qld and 1 in WA, the largest of them all and is at full capacity. Australia’s energy policy is simply a self-inflicted gun shot to the foot. There is only one state in Australia that set a mandatory on-shore supply of gas for local needs and that was WA.

  18. What a damn mess Australia has placed itself into with very little reserves of fuel oil that would be needed to supply the country and our armed forces in time of war.
    And to make matters would with regards to the defense of Australia the government has placed orders with a French company to build our next generation submarines which are being retrofitted with diesel propulsion replacing the originally designed nuclear propulsion systems. Bloody madness!

  19. “The Government is in the early stages of very constructive discussions with the United States about the potential to access their strategic petroleum reserve, which would greatly boost our own stocks and also the flexibility of supply,” she said.”

    America’s Strategic Reserve can only be tapped during emergencies.
    Even then, the reserves that have been drained from the Strategic Reserve must be replaced soon, within reason.
    Is America supposed to sell Strategic Reserves to Australia for current prices, where America bought many of those Reserves at substantially higher prices?

    Somewhere, the concept of “Strategic Reserve” has been misunderstood.
    Nor do I believe the President would consider Australia’s poor planning an emergency.
    Well, until it becomes an actual emergency.

    Australia’s suicidal destruction of energy sources, fuel processing plants and plentiful supplies on hand are the source problem(s).

    Plus, Australia needs to carefully consider President Trump’s international deals and treaties.
    A hard and fast rule President Trump has been applying across the board is that other countries no longer benefit at America’s expense.

    Australia should follow the norm and strike some deals with the large fossil fuel companies for regular fuel deliveries, at market pricing.

  20. Shipping in Europe (and maybe further afield) will be required to reduce pollution from burning heavy fuel oil. (Sulphur a big issue) Australia already has vessels burning LPG, SeaRoad for example on the Bass Strait run. It’s only a question of time then until military vessels use LPG instead of diesel and Australia should be in a prime position to provide for all of the LPG requirements. The stupid thing is that when state government licensed the extraction and export of natural gas or LPG they didn’t set aside a percentage for domestic consumption. This percentage would have been at cost plus rather than international market pricing. Basically we’re giving away our energy then paying market price to import it.

    • we had affordable 1500$ gas conversions for cars
      gas was cheap
      govt subsidised the cars swaps 1k and the conversions roase to 2500 and the price of gas trebled.
      thats how Aus manages to screw its people every time

  21. Australia has shut down the following refineries:

    Western port 1984
    Matraville 1985
    Port Stanvac 2009
    Clyde 2012
    Kurnell 2014
    Bulwer 2015

    Our lack of reserve problem dates back over a decade, this is a self inflicted wound

  22. Those politicians will figure it out when the machinery stops running, the store shelves are empty, and they see those mobs coming for them, carrying the lanterns and pitchforks.

    • That is when The Anointed use the last of whatever fuel is left to fly themselves and their cronies to a safe haven.

  23. Immediately available Strategic supplies are for urgent strategic situations. No problem as long as everyone gets along. That will never happen, right? As long as you don’t need to fly in anger or sail the fleet in a hurry, who cares.. The US will take care of us. < See what we did there? Oh wait.. how will they fill their planes and ships when the arrive to fend off the bully?? On second thought, I'd better add a /sarc.

  24. As an Australian this is both an harassment and a cause of fury. Like many, i have been aware of this for a while while our idiot politicians fiddled. We are an island, albeit a large one. If our sea lanes are blocked then our fuel imports are blocked, whether we have access to US supplies is thus moot. We have the raw materials but it is going to take blackouts (where we cant be saved by French nuclear power ,like Germany or the UK ) before our useful idiots in our cities wake up to the fact.

  25. As I type, the airwaves tell me that Victorian State Premier, Daniel Andrews, has just confirmed that the ban on fracking will continue.
    Why? Geoff S

    • maybe because farmers land is THEIR land?
      and they dont want it trashed.
      its the ONLY thing andrews got right
      and you know even if the landowners who paid for it maintain it and pay taxes were over ruled
      the NONexistent but amazingly vocal indigenous peoples would be blocking it anyway
      cos someone somewheres granny used to live there etc etc.

      overstating it?
      NOPE
      we can NOT dig a posthole in a park area to put a signpost/info sign up
      because a non existing local indigenous persons remains MIGHT be found
      ps the land is an old dumpsite and bones will be from animals if any

      • Ozspeaksup,
        Simply wrong.
        For a given area of land, the most valuable common resource is oil/gas/mineral. The value that can be extracted in a term of years to a few decades (then restored) is greater than any other use. Farming is excellent and given the Endowment of Nature, it is not and will not cause a farming problem in 99% of cases (or so, I am guessing at how to express a tiny number). Housing is another land use, but on the scale of areas that mines take up, it is easy to build your houses elsewhere until mining rehab is finished. There is a whole set of land uses that are more in the mind than in reality, including for native title, for historic preservation, for miscellaneous and usually synthetic reasons.

    • If the U.S. is any example, it shouldn’t come as a surprise that there are geographical areas that resist not only fracking but the use of natural gas, even if it means the citizens there will pay more for their energy – or simply go without power.

      Environmental leaders on both coasts of the U.S. make such a show of hatred of fossil fuels that the price of LNG has become intolerable. This Obama promise is fulfilled.

      The U.S. Is Overflowing With Natural Gas. Not Everyone Can Get It.

      U.S. gas production is at a record high, but the infrastructure needed to move the fuel around the country hasn’t kept up

      https://www.wsj.com/articles/the-u-s-is-overflowing-with-natural-gas-not-everyone-can-get-it-11562518355

      One trading hub in Washington this spring was selling LNG for $200 / million BTUs. In Southern California, it reached $23, On the East coast, at “Transco Zone 6” the price spiked in January to about $150 BTUs. “In 2018, natural gas prices in New York City surged as high as $175 during a snowstorm that spurred record heating demand. A week later, they returned to about $3.”

      Meanwhile in Midland, Texas, the price in spring was negative nine dollars / million BTUs, and according to several recent articles they’ve been flaring it, or burning it off because there’s no way to get it to a market. In spite of (or because of) the craziness on both coasts, the U.S. now exports as much LNG as we import, and we are importing it from places like Russia.

      Maybe we should get our own house in order.

  26. From the update:
    “Australia also has significant oil shale resources, especially near Gladstone, Queensland that could provide additional liquid fuels if developed.”
    This shows why it isn’t that simple. These developments aren’t being blocked by greenies or socialists. They have been around for a long time – I even did a little associated work last century. They were blocked by economics. This may change, but not yet.

    • That was in 2003. Shale extraction methods have improved and extraction costs have plummeted since then.

      • Our labour and transport costs have not 🙂

        To give you an idea I can get a 1kg parcel from China to Perth for $4.50 AUD, to get it from Perth to my city flat which is 3km from the Perth sorting centre $12.50 AUD.

  27. The US really doesn’t need our strategic reserves at the moment. Our net imports are ~1MM barrels/day of which more than 3MM come from Canada. Unless Canada decides to stop exporting oil we are kind of set. I am more than happy to offer Australia access to our reserves… for a good price.

    • We absolutely do need our strategic petroleum reserve. While it was designed as an insurance policy for imported oil disruptions, it has mostly been tapped when hurricanes have disrupted Gulf of Mexico oil production and Gulf Coast oil production, refining and distribution.

      Our net imports of crude oil are just over 4 mmbbl/d. We import about 7 mmbbl/d and export about 3 mmbbl/d…

      https://www.eia.gov/dnav/pet/pet_move_wkly_dc_NUS-Z00_mbblpd_4.htm

      Almost 4 mmbbl/d of our gross imports come from Canada and about 2 mmbbl/d from OPEC.

      https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbblpd_m.htm

      • Yes, but add in the exported finished products, and you should see that our net imports (crude + products) is far less than what we import from Canada. Perhaps lumping crude and products is not quite appropriate (energy density and all that), but even if we went with the 3MMbbl/day our strategic reserve is far larger than what we need.

    • chadb,
      If the US sells off our strategic reserve, what do you propose we use when a natural disaster creates immediate need or a belligerent China decides to pursue a Pearl Harbor type attack? The whole idea of a national reserve is to have resources immediately available, to meet an immediate need!

  28. Maybe when they come clean about their Ambassador spying on the trump campaign and trying to entrap people with fake information.

  29. To be an anti gun country the politicians seem to be good at shooting themselves in the foot. And burning bridges to enforce an agenda not successful is no way to keep options open.

  30. ozspeaksup said – maybe because farmers land is THEIR land?

    Oz Farmers land title docs all say – “LAND EXCLUDES MINERALS……..”

    NSW & Vic State Govts both have effective oil n gas bans

  31. With respect to the concern that Australia’s security of crude oil import supply might be threatened by events in the Persian Gulf, a few statistics From the British Petroleum Statistical Review of World Energy might be enlightening. In 2018, world crude oil trade involved 71.3 million barrels of oil per day from many sources. The Middle East was the export source of 24.6 million barrels per day, or 35% of the global total, far lower than it was twenty or thirty years ago. Australia’s 2018 oil imports from the Middle East (almost all from the U.A.E.) totalled 6.6 million tonnes. The Middle East supplied only 28% of Australia’s crude oil imports. You can speculate as to what percentage of supply through the Straight of Hormuz would be impeded by the Iranians and for how long, but given the magnitude of the international coalition that would align itself against Iran to prevent such a blockage, I submit that the interruption would be relatively minor and brief. Prices would rise, of course, as the speculators took their usual cut, but it seems highly unlikely (absent really foolish government policies) that Australians’ crude oil supplies would decline very much.

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