Amid all the public discussion about nuclear-powered submarines, one crucial advantage they possess has received little attention. In a doomsday scenario where our ships, planes and vehicles are starved of seaborne petroleum imports and grind to a halt during a conflict, nuclear-powered submarines might be the only remaining platform we can deploy in Australia’s defence.
Until the Virginia Class boats start arriving in the 2030s, we will continue to live with this single point of failure in our military logistics. Australian domestic crude production is in long term decline, our refining capacity has been largely shuttered across recent decades and our domestic reserves are around the bottom of the international rankings.
We import most of our petroleum products from mega-refineries in Singapore and South Korea and transport them across sea lanes and choke points highly vulnerable to disruption during conflict.
The Defence Strategic Review – which released its public version earlier this week – finally put this issue on the agenda. It recommended the establishment of a Fuel Council, a whole-of-government and industry effort to develop “a more robust fuel posture” by considering alternative supply and storage options. The Albanese government awarded it the slightly tepid “Agreed in Principle” response. Nonetheless, it could be the most significant advance in fuel security policy since the Morrison government’s imperfect plan to purchase crude oil and store it in the US Strategic Petroleum Reserve.
The Fuel Council will have its work cut out, not least in overcoming the traditional, reflexive faith that the petroleum industry has put in market forces to meet demand in normal circumstances; military logistics are precisely about abnormal circumstances, and this perspective must be paramount.
There are obvious steps to be taken towards mitigating the risks. Hardened and distributed storage of fuel should be the first priority, a topic already raised by Australia’s allies and partners. Last year’s AUSMIN consultations noted that the US military wishes to preposition fuel in northern Australian bases and that that Japan will be invited to participate in the initiative. This will come with immediate benefits but also unavoidable costs.
Since we must continue to rely on imports of refined petroleum products for the foreseeable future, diversity of supply must also be a priority for the council. Specifically, discussions about supply in extremis with our Quadrilateral Security Dialogue partner India – a major refiner that sits between the crude producers in the Middle East and Australia, with no maritime choke points in between us – should take place, with the Quad Leaders’ Summit held in Australia next month an excellent opportunity.
Some may reasonably ask: could we not substantially mitigate the risk of fuel imports by extending nuclear propulsion to other vessels in our navy or armed forces? While the USN for example has nuclear-powered aircraft carriers, and once had nuclear-powered cruisers, experts caution that it is an expensive solution for anything other than the undersea domain, and fuel storage and supply risk mitigation will remain the far cheaper choices.
Despite the welcome spotlight that fuel security has just recently gained, the DSR also recommends “Defence should accelerate its transition to clean energy”. The USN tried to demonstrate a simultaneous commitment to both fuel security and climate change using biofuel mixtures during the little-remembered “Great Green Fleet” initiative of the Obama administration. Simply put, it is unhelpful to conflate the two quite different goals.
The old military adage goes “amateurs talk strategy, whereas experts talk logistics”. The authors of the Defence Strategic Review should be commended for their wisdom in addressing both. Until our nuclear submarines arrive, we must face up to this fuel vulnerability. The government should revise its response from “Agreed in Principle” to “Agreed Emphatically” and inaugurate the proposed Fuel Council without delay.
Justin Burke is the Thawley Scholar at the Lowy Institute and Center for Strategic and International Studies in Washington.
