Australia’s Liquid Fuel Reserves: Running on Empty

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Australia’s Liquid Fuel Reserves: Running on Empty

How Australia’s low reserves and import dependence are setting it up for catastrophe

According to Australia’s National Roads and Motorists’ Association (nrma), Australia has set itself on a course that could quickly lead to a stagnated economy, mass job loss, empty supermarkets, and a dead-in-the-water military. It all hinges on the availability of liquid fuels. An nrma report by Australian Air Vice-Marshal John Blackburn (Ret.) highlights how Australia is setting itself up for major catastrophe.

According to the report’s findings, Australia has just three weeks of reserve liquid fuels. When broken down further, the averages are five days worth of stock in crude tanks at refineries and another two days worth being processed in the refineries themselves. There is another 10 days worth kept in stock at terminals, and three days worth at service stations. Add to that the average of three days worth of petrol sitting in cars around the nation. That is 23 days worth of fuel.

Such a narrow margin between sufficient supplies and none whatsoever is a concern in and of itself. It is also a breach of Australia’s international obligations. According to International Energy Agency law, the country is supposed to store a net stockholding of 90 days worth of liquid fuels. Australia consistently misses that minimum.

Australia has a “just-in-time” system. As fuels are used, they are replaced. Under normal circumstances, the system is sufficient. But look at the world today: We live in anything but normal circumstances. As Blackburn questions, “What happens when there are interruptions?”

With limited access to central or rural Australia, supermarkets and hospitals rely on roads for the delivery of merchandise. Take away the fuel, and suddenly food goes no farther than the farm or the shipyards. After just a couple of weeks, your supermarket will be emptied. The local chemist will be out of your prescription. If you commute for work, you will be commuting no more. Public transport would collapse under skyrocketing prices as petrol becomes a luxury most cannot afford. The economy would suffer a sudden collapse, with many people either unable to get to work or have no work to do once they got there.

This isn’t a dramatized scenario. It is simple cause and effect of what happens when a fuel-driven society loses its energy source.

Liquid fuels are essential to any economy, just as water is essential to a human. As the body quickly shuts down when starved of water, so too would the economy suffer sudden and life-threatening effects if it was deprived of liquid fuels.

Blackburn states in his report, “Without discussing these issues and analyzing the options, we are likely to have our lives shaped by commercial forces largely out of our control.”

Reports by the Department of Industry have given numerous scenarios that could potentially sever Australia’s supply chain. The main concerns were war in the Middle East, war in the Asia-Pacific region, or general disruption to key refining centers in the Asia-Pacific region. All are major factors because of Australia’s reliance on fuel imports.

Another report from the Department of Industry stated that in the 2013-2014 financial year Australia imported over 3.7 billion barrels of oil from the Middle East—primarily from the United Arab Emirates, Bahrain, Qatar, Saudi Arabia and Kuwait. All these nations rely on the Persian Gulf and its chokepoint, the Strait of Hormuz, to send oil to the world. This is the same strait that Iran has repeatedly threatened to close. (Read Trumpet columnist Brad Macdonald’s article “Europe, Iran and Bible Prophecy Come Alive in the Strait of Hormuz!” for more on the global ramifications of such a closure.)

Any closure or disruption longer than three weeks would mean Australia’s liquid fuel reserves would be evaporated, leaving the nation vulnerable to economic starvation if it can’t find another source.

Indonesia, Malaysia and Vietnam are also vital partners in Australia’s supply chain. To lose their support would be even more devastating than a lack of Middle East oil. But much like the Middle East, Southeast Asia is not the stable and reliable source it once was.

China’s increasing belligerence in territorial disputes is flaring tensions in the region. China is currently in disputes with at least six nations over territorial claims in the South China Sea alone. With military aggression being a policy China has and will continue to use, the stage is set for major confrontation should the crises not be defused.

Major conflict could see the crucial Strait of Malacca closed and Australia’s supply chain severed. China undoubtedly understands Australia’s dependence on imported fuels, and could use this as leverage should it spark conflict in the region.

Despite the aforementioned threats and how devastating they could be to Australia, the nation’s reliance on imported liquid fuels is only increasing. The nrma report indicates that Australia’s dependency on crude oil and fuel imports has grown from 60 percent since 2000 to 90 percent today. It also estimates that with no government rulings to prevent it, the nation will be 100 percent dependent by 2030.

Australian oil refineries have been closing left, right and center. From 2012 to 2014, Australia lost three refineries; only four remain. And of those that remain, not all can refine Australian oil due to the configuration of the refineries, meaning they still rely on imported oil. This paints a bleak outlook for Australia.

While its refining capabilities are being reduced, demand is increasing.

It isn’t just the everyday services and necessities of day-to-day life that could be at risk. Without fuel, the military doesn’t function either. Different departments of the military rely on different fuels—the Air Force needs jet fuel for instance. Take the fuel away and the planes don’t soar and the ships don’t sail. Trucks don’t haul; tractors don’t plow. The economy grinds to a halt as the country is unable to get food on the table and unable to defend itself.

With just a three-week supply available, Australia is a country running on empty.

Should one of the scenarios come to pass, Australia would wish it had switched its “just-in-time” policy to “just-in-case.” The momentary glut in cheap fuel can’t be allowed to assuage Australia’s concerns. Oil could sell for $1 per barrel, but if it can’t reach the island nation, what good is it?

If you drive a car, buy food or need access to the basic necessities—if your life is shaped in any way by these things—take note. Don’t be caught off guard as Australia may soon be. Turmoil in Asia and the Middle East may be on the other side of the world or it may be next door, but Bible prophecy says that it will affect you personally. Keep pace with the Trumpet website and magazine, the Trumpet Weekly, and the Key of David and Trumpet Daily programs. These tools are essential for those—Australian or otherwise—looking to understand the world around them, where it is headed, and how to avoid being a part of its short-term fate.