Interview with Kathryn Robinson, ABC Radio Sydney

KATHRYN ROBINSON: Well, the Energy Minister Chris Bowen joins me now. Very good morning to you, Minister. CHRIS BOWEN, MINISTER FOR CLIMATE CHANGE AND ENERGY: And to you, Kath.

Good morning. Now, the Prime Minister is meeting with his Singaporean counterpart, Lawrence Wong, today, looking to secure fuel. What does success look like in Singapore for the Prime Minister and for Australia?

Well, it looks like ongoing reliable energy supply to each other, which is what the two Prime Ministers had already discussed, but obviously face-to-face interaction always helps cement that, and we've been very active in talking to our Southeast Asian and Asian trading partners over recent weeks, the Prime Minister, Foreign Minister, myself, and the response has been very encouraging.

They get it. Obviously, the whole world is under supply chain pressure, and the Asian refineries are very much included in that. But nevertheless, the countries, including Singapore, have been indicating to us they understand the importance of reliable energy supply.

They're not contemplating any sudden moves which would endanger that, but we do need to work together to manage what is a very constrained supply chain around the world at the moment. You mentioned, Minister, we need to cement that. Do we need a binding agreement on fuel supply?

We have a signed an in-principle agreement, but is that enough? Because without something solid, how can we be confident that Singapore won't prioritise its own needs if it needs to, just as Malaysia has announced it might need to do? Well, with respect, a gentle correction on Malaysia, they've actually indicated to us their ongoing support and commitment, including in my discussions with the Minister last week about being a reliable energy supplier.

So they haven't said that they would need to prioritise their own needs? No, they’ve made it clear to us that they intend to continue to be a very reliable supplier and both Singapore and Malaysia of course make more fuel than they could possibly consume domestically. Obviously, they will have measures in place to ensure domestic supply, but they also want to ensure that they are reliable to us.

Now, the amount of crude oil that's come through the Strait of Hormuz to them, for them to refine, has been very, very constrained. Absolutely no secret about that. They've also been doing good work to get supply of oil from around the world, from other places, United States, Mexico, Algeria even, and that has started to flow to them and again, we're in strong communications with them.

I'd make this point, Kath, and I completely understand people's concern here. That's why I've held a daily press conference for quite a long time, all the daily updates and more full weekly press conference on Saturday mornings, which I'll do again tomorrow, on the weekly figures about how much supply we have in Australia, what's on the way, et cetera. So, I've been doing that now for the best part of four weeks.

That's appropriate to give Australians much more information. There's more information now out there about how much fuel we have than really ever before. And that's a good thing.

But I'd make this point, not one single ship that we have expected to arrive to Australia at this point has been interrupted. We've been dealing with very elevated and increased demand domestically, some for reasons that are very understandable, others for, some- you know, panic buying, which we've tried to assuage and allay. But in terms of the information, we're working very closely with the refineries and the importers.

Yesterday, we announced that we'd done a deal, an arrangement with Viva and Ampol, our two biggest players, to help them go and get those spot cargos that are available in the world and bring them to Australia. This is all good progress. Just on... before I move on from Singapore – I mean, before I move on from that binding agreement, would it be a preferred outcome if we had a binding agreement rather than just an in-principle agreement?

Well, the Prime Minister will make further updates after his meeting with Prime Minister Wong today. I'm not going to pre-empt. But, look, I do want to emphasise what the most important thing here is good faith and goodwill and working together and Australia and Singapore are, you know, very, very important partners here.

And the relationship is in just first class working order. But it's important, including at face-to-face level and leader level, as well as, you know, ministerial and again, I've spoken to my counterpart, See Leng Tan, just in the last, you know, little period. They are fully alive to their importance to us and the importance to work together.

And just as we are important suppliers of energy to them in other forms, that we are, you know, much better off working these things through together. And that's very much in our national interest. OK, I want to ask you if I may, Minister, about fuel reserves and take you back to 2020 from a statement from Anthony Albanese.

ANTHONY ALBANESE, PRIME MINISTER: Australia should have here 90 days available of liquid fuel reserves. And what we need to do is to actually build a capacity here for a refining capacity. [End of excerpt] So, a long way from 90-day reserves, I believe. What are our current minimum reserve requirements and do they need to change?

So, when we came to office, I signed the regulation to create what is the minimum stock obligation. It had been legislated some time before that to allow that, but it hadn't actually been done. Nothing had been done about it.

So, we did that when we came to office. Until then, our reserves were held in Texas. I think some of our listeners might still think that they're in Texas.

I get that a bit. You know, how come our fuel is in Texas? It's not there anymore.

It's now here. So that's an important sort of clarification for people, and I do think will also provide that reassurance for people. At the moment, again, I'll update the figures tomorrow.

I do that every Saturday. At the moment, we have 39 days’ worth of petrol, 30 days of jet fuel and 29 days of diesel on hand in Australia, predominantly in Geelong and Brisbane, but not only in in those places. There's smaller storage right spread around the country where that is kept.

That is above the minimum stock obligation, which is sort of a bit of a complicated formula about how many million litres must be here at any particular time, but it is above that. I've relaxed that a little bit by 20 per cent just to get some of that fuel flowing to Australia, the regions where we've had shortages due to the increased demand. You know that 90-day figure is something different.

That is an IEA rule, but that doesn't have to be held in Australia. That is not about domestic supply. That is about being able to sell oil and other refined fuels in an international situation where the IEA is trying to reduce prices.

But given that how we're looking at – you know, world leaders are scrambling, I heard it referred to as the hunger games of oil procurement at the moment. Do we need to look at having more than our 39 days for petrol, as you say, that we have at the moment? Is that necessary?

In due course, at the moment, we're focused on making sure that we are well placed in the immediate term. In due course, we'll consider. You always look at what you can take out of a situation like this and what can be done to improve the situation in the future in due course.

But these things come at a cost. I mean, if we had 90 days’ worth in Australia, that's $20 billion for the taxpayer over four years because, as you'd imagine, you can't just build a fuel tank and leave it there. It's got to be turned over regularly.

You know, it's easier to call for it than it is to actually work those issues through. Yeah, and that's structural changes that's needed there, and I'll get to that in just a moment. We're being told by you and the Prime Minister there that fuel stocks, as you're saying, we're good until into June.

If nothing concrete comes out of Singapore, can you confirm that we will have fuel security after that, after June? Yeah, well, look, as I said, I'll never make an assertion here that I can't back up, but these things are normally ordered four to six weeks in advance, the fuel orders. That's why we give these updates, particularly every Saturday, on how much fuel is on its way to Australia.

And we have been saying – you know, not that long ago, we were saying we're okay through to April. That's not counting the fuel reserves I just talked about. That's sort of in reserve in case we need to release more.

But not counting those, we have had locked in contracts into April. Now, we're in a position where we can say well through May, we have locked in contracts, which is legally obliged to be delivered to Australia. That's Australian property, in effect, once those contracts are locked in, well through May.

And there are orders being made for June as well. Not yet in a position to say that all June is covered by those orders. I won't make that claim... ...until I have concrete support for that claim.

But now well through May and starting to get into June as well. That's before we get to the reserves that we have on hand for the worst – for a worst-case situation. So can you guarantee, Minister, that rationing won't occur in the next few weeks?

Because there's some financial press that's saying farmers are fearful that rationing could become – in the next few weeks. How quickly could we jump up to stage four in the fuel security plan? Not quickly, And one of the things that we're determined to do is – again, every challenge provides lessons.

What we don't want to do is a situation like we had in COVID where, with all due respect to everyone, there were press conferences at nine o'clock at night saying what you're allowed to do tomorrow. We won't be doing that. We'll be providing plenty of updates and signalling and warning.

As you know, the states and us agreed a four-stage process. We're currently at stage two. There's a long way to go.

We are not contemplating any need to change those arrangements anytime soon. We are continuing to get fuel solidly into Australia. I've never denied that there aren't challenges and risks.

Of course there are. Of course there are, Kath. There's a war on in the Middle East, which produces the majority of the world's oil.

Of course there are challenges. Of course there are risks. What we can do is maximise our capacity, prepare better.

We're much better prepared for this than we were, say, for Ukraine, partly because we're using more renewable energy – separate question perhaps, but partly because of that. We are much better prepared in relation to our energy system, but I'm not – I have never disputed that there aren't risks and challenges which we're navigating. Sure.

What can you say to Sydneysiders? I looked on a FuelWatch website today that has prices around Sydney around $2 to $2.22 for unleaded petrol. Is there going to be a scenario that you can see where petrol prices will return to pre-war levels?

Well, firstly, we've done – the biggest lever we have is the petrol tax, which obviously we've cut in half. That's the biggest level we've had. Which is – it's not permanent.

No, it's not permanent, but neither hopefully is this war, Kath. So, the biggest impact on petrol prices is oil prices. The sooner this war ends, and the world returns to more normal arrangements, the sooner the price of oil will come down, the sooner the price of petrol will come down.

That is just the economic fact. Yeah, but back to pre-war levels? Well, this war will have some impact even after it's finished because it takes some time – as you said, there's hundreds of ships sitting there in the Straits of Hormuz that haven't been able to get out.

It's going to take some time to get to normal. But we will eventually get to normal, but it's not going to be an overnight thing. I know there was a lot of relief around yesterday.

I understand that. I get that. I share that relief from yesterday.

But nor should we pretend, any of us, that we're through this entirely or that there aren’t risks going on. This is an uncertain situation. Certainly.

So, you say that at some stage in the future it will get back to normal levels, but there are huge structural problems, as you just mentioned. Getting production back up and running in the Middle East takes time, months if not years. Iran now has mentioned it might start charging up to $2 million, reports of getting a shipment through the strait.

So how is it possible at all to get them back to pre-war levels when you've got just these two issues staring down the barrel? Well, obviously, I mean, that would be a very negative thing which we would be very opposed to. But these are the sorts of issues need to be worked through.

That's why I'm saying – the announcement of a ceasefire is very welcome, but let's not pretend that that is the end of this situation, because it isn't. You're right. There are ongoing ramifications, not so much for oil production as such.

More gas production has been impacted, but oil distribution and supply has been impacted through the Straits of Hormuz. It's a very important choke point, which has effectively been closed. Some ships have got through, but not many.

Effectively being closed. This is – the IEA has said, in which we're very active members, that this is the biggest energy shock in history. That's true.

I've lived through three of them. I've been energy minister for two of them, and this is the biggest one. And that is going – that isn’t something which gets turned around overnight.

No. In the last few minutes that we've got left, Minister, just on the fragile ceasefire in the Middle East that you just referred to then, do you think Israel is jeopardising this ceasefire, and should Australia be exerting more pressure? Well, particularly in relation to Lebanon, I agree.

This ceasefire must apply in Lebanon. Lebanese people have as much right to their rights as anybody else in the Middle East. There are Lebanese people who are losing their lives, Muslim and Christian together.

That is not okay. Israel should honour this ceasefire in the letter and the spirit, and that includes the people of Lebanon. Okay.

Finally, if I can just ask you, Minister, about the criticism that has been levelled from Tony Abbott that we've let down our main ally, the US, and that we should have deployed RAAF to the Middle East in a similar capacity to its involvement in its campaign against Islamic State. What's your response to that? I try not to be disrespectful to a former prime minister, but I'm not sure that Mr Abbott brings much to nuanced discussions about international affairs.

He's been always very gung-ho to send Australian ground troops to disputes overseas, and that is not the approach of our government who will always conduct our foreign policy in accordance our best interests and our values. So, we haven't let down our main ally? No, we didn’t – we weren't consulted about beginning this war.

We are not participants in this war, apart from supplying some support to our friends in the UAE in a very defensive capacity. And Mr Abbott's entitled to his views, of course. He shares them freely.

I try not to be disrespectful, but he is very much wrong. Federal Minister for Climate and Energy, Chris Bowen. Thank you for your time.

I look forward to your press conference tomorrow. Good on you. Thanks.

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