Press conference, Sydney, New South Wales
MINISTER FOR CLIMATE CHANGE AND ENERGY, CHRIS BOWEN: Thanks for coming, everyone. I’ve got three matters to touch on today. Firstly, and primarily of course, Australians during the day have been very concerned, understandably and rightly, to see the footage from Geelong.
This fire started at around 11pm last night and was extinguished around lunchtime today. The good news is that no worker has been injured. Everyone is safe and accounted for.
Obviously, I’ve been talking through the night and during the day with the Chief Executive of Viva, assessing the impact of this fire. This is not a positive development. This is not good timing, and this is a setback.
But I can assure Australians, the Government and industry are working very closely together to manage the impacts of this fire and to ensure ongoing fuel security for Australians. I can say that Viva has advised me the likely impact is primarily on gasoline and aviation gasoline. Gasoline is what we would mainly call petrol.
And aviation gasoline, it’s important to note, is not jet fuel. They are separate and different things. Aviation gasoline is usually used primarily for small planes.
We use about 6 million litres a month of aviation gasoline and we have 23 million litres in stockpile, around 116 days in reserve. So I think that is something which we will be able to manage quite successfully. I am pleased to say that diesel and jet fuel production in Geelong remains underway at reduced levels for a period of time as a safety precaution, but we’re confident that it will return to strong levels quickly.
Viva, once the orders have been given that it is safe to investigate and to enter all the relevant sites, will make further assessments about what the impact on petrol production will be. There will be some, but it won’t come to an end in Geelong. And Viva is confident that they will be able to replace the impacted petrol production with imports.
Obviously, there’s work to do over coming days, more damage to assess and measures to put in place, but they’re confident at this point that petrol production that has been impacted, and will be impacted, can be replaced by imports of petrol and extra cargos that they intend to order. Obviously, we’ll continue to work over the weekend with Viva and I will provide, as Viva will, full updates to the Australian people as soon as more information and clarity comes to hand.
I think Australians would understand this is a fast-moving situation. The site is still being secured and making sure it’s safe for everyone to get in and assess the damage, and that work will continue over the next couple of days. Second matter I wanted to update you on is, of course, as the Prime Minister has just announced from Malaysia, we have successfully secured the first cargos under the Export Finance Australia arrangements, from Brunei, where the Prime Minister was yesterday, and also from Korea.
Two ships, 50 million litres of diesel on each ship, 100 million litres of diesel extra secured for Australia and for Australians. The Government and Viva worked together to get those ships locked in and ordered. They will arrive in Australia during May.
This is a good development and the first of many, I expect of EFA being able to work with companies. Yesterday I announced IOR and Park have been added to Ampol and Viva as companies participating in the EFA arrangements, and I expect to be able to make further announcements in coming days about further progress when it comes to EFA. This is a good thing.
This is exactly what the situation was designed for, to get extra cargos into Australia, because diesel is where the pressure primarily has been in relation to regional Australia. I will also be convening an Energy Ministers meeting next week, the Energy and Climate Ministerial Council, State and Territory Ministers together with New Zealand, to assess the latest updates since we last met.
This is not in response to the fire, it was something we planned to do, but it is a timely meeting of Energy Ministers next week. I also, as I do usually daily, just wanted to give you the latest update on service station outages. Again, as I have many times, thank everyone who has worked so hard to ensure service stations are fully stocked.
In New South Wales today, we have 56 service stations without diesel. That’s down 28 on yesterday’s report and down 56 on a week ago. So that’s a halving in a week and represents 2.3 per cent of service stations in New South Wales.
Thirteen with no fuel in New South Wales. Victoria, 18 with no diesel. That’s 1.1 per cent of service stations in Victoria.
Ten with no unleaded. That’s 0.6 per cent. Queensland, 35 with no diesel, 17 with no regular unleaded.
South Australia, four with no diesel and 14 with no unleaded. Western Australia, ten with no diesel and 26 with no unleaded. Tasmania, 11 with no diesel, 22 with no unleaded.
Northern Territory, three with no diesel, one with no unleaded. ACT, zero with no diesel, one with no unleaded. That’s a total of 136 service stations across Australia without diesel.
That is 1.7 per cent of Australian service stations, so roughly 98 per cent do have diesel. So thank you for coming in for a later than normal press conference, as I’m sure you’d understand. There’s been a lot of activity today.
Happy to take your questions. JOURNALIST: Is there a growing likelihood that the Government will need to move to stage three or stage four of the emergency plan? Not directly as a result of this fire.
We’ll continue to monitor the situation. This is a negative development, as I’ve said. This is not a good development when it comes to what we’re managing, but we’re managing it.
This is in and of itself, because Viva has told us that they’re very confident they can replace the petrol with imports, so won’t lead to a change in the status of the four-point fuel plan. JOURNALIST: Can you rule out moving to a higher stage as a result of this consequence? Well, I think I just answered that. : Obviously Viva are giving you guarantees that they’ll be able to replace the petrol they lost.
How much petrol is that? And obviously the market’s getting more competitive, so should they not be able to do that, what then will be the impact? Well, we don’t know exactly what the impact on petrol production will be.
There’ll still be some. We don’t quite know just how much will be impacted, to be fair to everyone. We’re still assessing the damage.
Geelong Viva refinery makes 7 million litres of petrol a day, which is a substantial amount, but some will continue to be produced. And as I said, by way of comparison, it’s not apples and oranges, but just for the purpose of the conversation, we just secured 100 million litres of diesel, for example, separate to petrol. But that gives you an idea of how much is on a cargo tanker coming in.
Cargos are available. They are expensive, but that’s why EFA is providing the assistance, or the Albanese Government through EFA is providing assistance. JOURNALIST: Will that increase the cost of it as well?
Well, petrol is the same cost regardless of where it’s produced. JOURNALIST: What about the environmental impact around the population? Well, as you know, Fire Rescue Victoria issued a stay-inside alert last night in the early hours of the morning.
They then changed that to an advice notice today. Obviously, again, there’ll be a lot of smoke in the vicinity, but as I understand it they have lifted the stay-inside notice and said it is simply an advice notice. So obviously, again, it’s not good for the atmosphere or the environment, but they haven’t expressed any particular health and safety concerns.
JOURNALIST: Does this fire make you reconsider if we should release more from our strategic reserves? Not in and of itself, no. JOURNALIST: Jacinta Allen said this fire would need to be assessed against the national plan.
Does that not logically mean that National Cabinet will have to meet and discuss potentially going higher? As I said, I’ve talked to my Energy Minister colleagues. We’re having a meeting early next week.
National Cabinet will convene if and when needed. The Prime Minister is in regular contact with his Premier counterparts. Of course, this is one of the many things we’ll consider.
We consider the international supply chain environment, we consider the situation in the Strait of Hormuz, we’ll consider this, but this in and of itself doesn’t lead to a decision to change levels. : Have there been any discussions today about the potential need to go to a higher level? Not that I’ve been involved in, no. JOURNALIST: Just on that 100 million litres of diesel, do we know how much extra that will be for our own reserves?
Well, it’s extra supply to Australia, so it all gets added to our reserves and then, if you like, replaces fuel that’s being kept in reserve and then distributed to regional Australia, is the idea. And that will happen and it will arrive during May. JOURNALIST: Are you looking to restart capacity at any of the New South Wales refineries?
We’ve received various suggestions and ideas, but in terms of the big refineries, Kurnell et cetera, no. These are refineries that were dismantled some time ago and very substantially. JOURNALIST: Santos chief executive Kevin Gallagher said drilling oil out of Western Australia has come very much to the top of our thinking given the supply crunch from the war.
Would the Government support Santos drilling for oil in that basin? Well, we’d support it if it stacks up environmentally, economically and in engineering fashion. These are not matters of a culture war, as far as I’m concerned.
Some people try and drag us to a culture war, you know, you’re pro or anti drilling. Obviously, if there are sensible proposals to drill in Australia which will replace imports, great. It’s not the answer to all our problems.
A lot of our oil has been depleted, we’ve used it, and a lot of oil in Australia is not suitable for our refineries. Nevertheless, we’ll work constructively with proposals, like we will with Queensland when that proposal is received by us. We use about 150 million litres a day, so Australian production isn’t going to match that.
But anything sensible which helps fill the gap, sure. But again, these are not proposals which will help us next week, next month, often not next year. The 2030s is when a lot of this stuff would come on if it goes well.
JOURNALIST: Do we still have supply into June, or is it the first few weeks of May? No, May is now covered. So we have contracts through May.
I’ll provide a further update on Saturday when I provide the weekly update, as you know, on ships on the way to Australia. I provide each week, every Saturday I hold a press conference. I run through what the stockholdings are, what ships are on the way, the number of ships on their way to Australia, what contracts are locked in for subsequent weeks.
I do that every week. I’ll do that again this Saturday, as I do regularly. But I can say that we are now covered for contractual arrangements through May.
JOURNALIST: We’ve had concerns about jet fuel. Is there an impact? As I said, there are impacts on jet fuel, but I expect those to be quite temporary.
They just reduced the jet fuel and diesel production today as they were dealing with the situation. We’re not expecting that to be a permanent thing, no. JOURNALIST: Is it a coincidence that one of our two oil refineries has had a catastrophic fire during a national fuel crisis?
What’s the alternative to it being, a coincidence? A conspiracy? JOURNALIST: Was it under increased pressure?
No. Look, the preliminary conclusion of the fire authorities was equipment failure. I was asked this morning, was it sabotage?
There’s no evidence of that. It appears to have been very accidental and equipment failure. There’ll be further investigations.
Making petrol and these materials is a highly dangerous and flammable exercise. I think that’s pretty self-evident. It works safely 99.99 per cent of the time.
On this occasion, it’s bad timing, but it didn’t work safely. JOURNALIST: Has there been delayed or foregone maintenance because of increased refinery output? I don’t accept the premise of the question that there’s been delayed maintenance in Geelong, because that is not something I would accept.
There’s been a decision in Lytton to delay a long-planned big maintenance, which wasn’t meant to have occurred just yet anyway. It was meant to occur in July. It’s been delayed for a few months.
Quite separate. Quite separate to this. So, if this is a suggestion that somehow corners have been cut, that’s just not right.
JOURNALIST: Are there going to be additional safety measures? Well, obviously Viva will examine what’s gone wrong here, but they do have a very good safety track record. There’s been a terrible incident last night, but let the inquiry and reviews and fire safety investigations take their course.
JOURNALIST: Is there a contradiction, Minister, that you’re saying now that if oil drilling projects stack up, we should go ahead with them, whereas earlier this week you said you didn’t think expanding fossil fuels production was a lesson in this crisis? Well, no, because what I’m talking about there is the immediate challenge. And then there are some who say the answer to this is to somehow become more reliant on fossil fuels.
That’s not a view I share. It’s not a view that any ministerial counterpart around the world I’ve spoken to shares. We are dealing with a short-term issue, yes, of supply.
There’s been a fossil fuel supply shock. This is a fossil fuel supply crisis internationally. The answer to that is sensible measures like the ones we’re undertaking, the Prime Minister’s undertaking.
And in the longer term, if you can reduce to some degree, or a greater degree, our dependence on those fossil fuels, that’s a good thing. So, for example, our EV uptake in Australia, our number of EVs in the fleet is relatively low at the moment, high in sales terms but low as a percentage of the fleet. It takes a long time.
Even with the relatively low EV uptake we have, that’s avoiding the use of 15 million litres a week of fuel. That’s a good thing. That’s 15 million litres we have available for others.
That’s part of it. Now, if we have higher EV sales and higher EV penetration and higher EV percentages across the entire fleet, that figure will come down even more and provide more fuel options for those for whom an EV is not a viable option just right now. And again, I participated yesterday in the conversation on the Prime Minister’s behalf with the Prime Ministers of Japan, Singapore, East Timor or Bangladesh, India, a whole bunch of Asian and Asian-adjacent countries yesterday.
It was a very common theme from the interventions by Prime Ministers and Presidents. One, we have to work together in the short term, that was the first theme. Two, this underlines and underpins one of the reasons why we’re electrifying and trying to get more sovereign sources of renewable energy, so we are less reliant on these fragile fossil fuel supply chains.
JOURNALIST: Is there likely to be an impact of this refinery fire on prices at the bowser? I don’t envisage so, because this is a supply issue and Viva is anticipating being able to replace the supply by imports. JOURNALIST: Minister, can you just tease out a little bit more stage three?
What does that look like? Does that include the points from the IEA? I mean, the three- and four-stage plan is out there for all to see, I accept its principles-based.
But really stage three is after an impact upon Australia, which we have not yet experienced. Every boat that we’ve expected to arrive has arrived, so we haven’t experienced any impacts on supply to Australia. And really it then moves to more active voluntary measures.
We have an advertising campaign letting people know what they can do now, for example, but more active voluntary measures to encourage fuel efficiency. That’s really what stage three is about. JOURNALIST: Is that the point where the Government would say to people they should get public transport to work?
Well, where we provide more active encouragement to do those sorts of things. JOURNALIST: Active encouragement, not mandates? No.
That’s not contemplated at stage three, no. Okay, good. Thanks for coming.
See you tomorrow. We acknowledge the Traditional Owners of country throughout Australia and recognise their continuing connection to land, waters and culture. We pay our respects to their Elders past, present and emerging.