Introduction and background
On 3 September 2014, the following matters were referred to the Senate
Rural and Regional Affairs and Transport References Committee for inquiry and
report by the last sitting day in March 2015.
Australia‘s transport energy resilience and sustainability,
with particular reference to:
- options for introducing mandatory oil stockholdings;
- the role of Government in ensuring Australian energy for
Australians, including maintaining refinery capability; and
- Australia's role and responsibility regarding energy
security as a member of various multilateral fora.
On 12 February 2015, the Senate granted an extension of time for
reporting to the committee. The extension provided for the committee to report
by 25 June 2015.
Conduct of the inquiry
The inquiry was advertised in The Australian and on the committee
webpage. The committee also wrote to government departments, organisations and
individuals to invite submissions. Details of the inquiry and associated documents
are available on the committee's webpage.
The committee received 41 public submissions and 1 confidential
submission which are listed at Appendix 1. The public submissions are also
published on the committee's webpage.
The committee held public hearings in Sydney on 2 February and Melbourne
on 9 April 2015. A list of witnesses who appeared at the hearings is at
The committee acknowledges the organisations and individuals that made
contributions to the inquiry through submissions and appearances at the
Background and inquiry focus
On 8 April 2015, during the course of the committee's inquiry, the
Australian Government released the 2015 Energy White Paper. The paper
recognised that Australia's current oil stockholdings do not currently meet its
obligations under the International Energy Agency (IEA) treaty.
As a member of the IEA, Australia is obliged to hold oil stocks equivalent to
90 days of its prior year's net imports.
In January 2015, the IEA reported that, Australia fell short of this 90
day requirement with 51 days of industry stockholdings.
IEA data on closing oil stock levels of net imports reveals that Australia's
stocks had progressively declined from 88 days in January 2010 to 83 days in
January 2012 to 60 days in January 2014.
According to the University of Queensland (UQ), Australia's stocks have
progressively declined from 2002 when there were over 300 days of stock.
In the Energy White Paper, the Australian Government noted that meeting its
90 day IEA obligations would require an investment of billions of dollars in
stocks and storage infrastructure over a decade. It further noted that:
A decision on how to address this compliance issue will be
made by the Government in 2015.
In light of this evidence, this report considers Australia's liquid fuel
supply and stockholdings, with a focus on the challenges and opportunities to
Australia in meeting its IEA obligations. However, it also recognises that
Australia's energy security entails more than simply IEA compliance.
As part of this review, the report lays out the current context in terms
of Australia's energy consumption, production, importation and exportation. It explores
the implications of Australia's declining reserves and production of petroleum.
It also considers the role of government in relation to energy security with a particular
focus on Australia's approach of relying heavily on market forces to deliver
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