Interview with Alex Thomas, Sky News First Edition

HOST, ALEX THOMAS: Very concerning scenes out of Geelong. You know, scenes of flames and smoke and the refinery really going up in flames. How worrying are those scenes and images?

MINISTER FOR CLIMATE CHANGE AND ENERGY, CHRIS BOWEN: Good morning. This is a substantial fire. This is not a small fire.

It broke out at 11 pm last night, and is still, as we speak, not under control, although it is expected to be under control sometime this morning. It is impacting predominantly at the moment on the production of petrol. Diesel and jet fuel remains under production at the refinery, at reduced levels, as a precaution at this point.

Obviously, we will work very closely with Viva to manage the impacts. We'll get more information over the course of the day. I think your viewers would understand, the fire is still burning as we speak so we can't make final assessments.

I've been talking to the Chief Executive, communicating with him through the night and he's been on site all night, and we are continuing to work very closely together. When we have more information, I, and Viva, will update the Australian people with their very best and latest information we have. So, it sounds like it might be too early to say whether or not it's gonna have an impact on Australia's fuel supply.

You know, it's certainly gonna, it's certainly not a positive development. At this point, as I said, I'm pleased that diesel and jet fuel, which are both very important, maintain their production. Some impact on petrol production, but, again, I think it's, you know, it's not yet 8 o'clock in the morning and it broke out at 11 o'clock last night.

We got some way to go to work at the full impact obviously. This is not a great step forward. This is unfortunate, but, you know, my message to Australians is that this is one part of the supply chain.

We continue to make very good progress internationally. We continue to work closely with both refineries we have in Australia. There's no need to buy more or less fuel than you normally would.

We'll keep you updated fully in full transparency with the impacts of this. We don't yet quite know the full impacts. That's the truth.

But we'll continue to work closely with the company and make updates when we can. It's made it a busy time for you, but is it actually a good thing that it's put a spotlight on the need for Australia to examine its fuel security long term? Look, we have needed to examine our fuel security.

We introduced the minimum stock obligation, which is a requirement to hold the fuel in Australia, not overseas. We've taken steps to save the last two refineries, which were under pressure. That's important.

We had six refineries in 2013, and two in 2022. That's very negative. We would have been better placed with those refineries operating.

I think today's events, you know, underline that. But, you know, we deal with the circumstances we're working in. Yes, it is a busy period, but it's a very difficult period internationally, and very uncertain internationally, and changing hour by hour internationally.

What we can do is maximise Australia's strength in this situation. That’s what the PM's doing in Southeast Asia. That what I'm doing focussed domestically, in terms of supply and ensuring that Australians have the very best access to fuel in this very difficult international environment.

Would the best thing in the short term be for the war in Iran to end, and the Strait of Hormuz to reopen? Yes. No question.

But, you know, that is not a straightforward process and even when the Straits of Hormuz reopens, there'll be some impacts from this, it'll take some time to work through. There's, you know, millions and millions of litres of oil sitting in the Strait of Hormuz on boats, waiting to get out. It won't all come out on day one.

It will be a slower process, to return supply to more normal levels. There’s gas fields destroyed in the Middle East, they won't be rebuilt overnight. We are going to be living with the impact of this, obviously, it'll get better.

We hope it gets better more quickly, and the sooner the war ends, the better for the world economy. No question. And is this a similar situation to COVID in this respect that it's easy for detractors to point at this with hindsight and say, 'We should have been better prepared'.

But how hard is it when you're in government, dealing with everything you have to do on a day to day basis, to see a major global crisis like this coming? Or is it just another pointer to the fact that you've got to be ever vigilant about these sorts of eventualities? I think it's the latter.

You got to be vigilant when, you know, you got to be prepared, whether it's another pandemic or a global war, as it is in this case, in the Middle East. I mean, we are living in an increasingly uncertain world. There's been three energy shocks in my lifetime, international energy shocks.

I have been energy minister for two of them, so they're not getting less frequent. They're getting more frequent. What we can do is take steps and learn from each step as well.

You know, I think we all learnt from COVID, you know, what we won't be doing is, for example, 9 PM press conferences saying the rules are changing tomorrow. Not being critical of anyone in particular, just saying that wasn't great for Australian certainty. We are going to avoid that by giving as much information upfront as we can about what we're facing, when we're going to face it, et cetera.

At the moment, every ship that we've expected to arrive in Australia has arrived. The refineries until today have been working full pelt. You know, maximum production, every drop of the fuel that they refine staying in Australia.

That's a good thing, that's as a result of government and industry working together, and what we need to do is stay agile, which is what our government is doing in the face of this very fast changing and difficult international environment. And talking about dealing with challenging global situations, um, your colleague, Richard Marles, already coming under criticism for the announcement we expect later today about the boost of defence spending, uh, many saying it isn't enough, and anyway, there's been a cheeky readjustment as to how you calculate that spending in terms of GDP.

Are those criticisms justified? No, Richard will be making the announcement today, not me, but obviously, as I said, this is a very difficult international environment, investing in defence is absolutely vital. That's what we've been doing.

But what you don't do is set some sort of arbitrary target and then work out where you're going to spend the money on, you work out what is good value for money in terms of investment in defence, and then you work it up. You don't work it down, you work it up from, you know, all the different proposals that you could spend defence money on, and as you'd imagine, Alex, there's literally hundreds of them that come forward.

You work out what is best value for Australia, make the decision to do it and that leads to a better, stronger defence force, not some sort of arbitrary target, but a target which is based on good investments for Australia. OK, Chris Bowen, as ever, really appreciate your time on the show this morning, it's the Climate Change and Energy Minister, Chris Bowen, joining us.

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