Fuel security fears draw support for refining rescue
By Sourced Externally
December 1, 2020
South Australian independent Senator Rex Patrick has thrown his weight behind the push led by the Australian Workers Union for fast-tracked measures for the embattled oil refining sector amid fears more plants are teetering on the brink of closure.
He said independents Senator Patrick and Senator Jacqui Lambie seemed supportive, as did local MPs in the areas of the refineries, including Richard Marles in Corio in Victoria and Madeleine King in Brand in Western Australia, where BP has already decided to close its Kwinana plant.
“The meetings we have had, frankly we have not yet encountered an unsympathetic engagement,” Mr Walton told The Australian Financial Review.
“One of the biggest reasons for that is the current climate in which we are having these conversations and that is that the geopolitical debate which underpins the issues around fuel security is quite frankly running at the highest alert levels it has been in probably the best part of a decade.
He said that meant the notion of having no domestic refining capacity and becoming entirely reliant on shipping lines remaining uninterrupted was a “nonsensical” position for Australia.
All the plants have been hit by the pandemic’s impact on demand and margins, and are in discussion with federal Energy Minister Angus Taylor’s office over fuel security measures which could provide support, including a “production payment” or subsidy and diesel storage contracts.
I am open to some form of intervention that supports that capability being resident in Australia.
— Senator Rex Patrick
Senator Patrick said he supported urgent measures given the risks around security of supply should the sector shrink further and the country become more reliant on imports for petrol and diesel.
“In principle we have to stop outsourcing some of these sorts of capabilities – have we leant nothing from COVID-19?” he said.
“I am open to some form of intervention that supports that capability being resident in Australia.”
A spokesman for Mr Taylor said negotiations with the refineries had been “positive” and noted the government had already committed to prioritising development of the production payment.
“The minister looks forward to meeting with the AWU later in the week to discuss the government’s fuel security package, the future of the refining sector and the Australian jobs that rely on it,” he said.
Mr Taylor is expected to meet again with the refiners over the next two weeks after last holding discussions with them in early November.
Mr Walton said the production payment needed to be implemented as soon as possible to give refiners confidence about making long-term investments.
“The problem is that arguably it needed to be in place a couple of months ago. And we’ve only got a few sitting days left of Parliament, so how is a meaningful solution going to find its way through both houses of Parliament in a few days?” he said.