There are a number of budget measures vying for top spot as the most brazen fossil fuel subsidy—rewarding large emitters for potentially doing nothing and pouring money into gas plants are certainly in any podium finish—but paying Australia’s oil refineries an undisclosed amount to stay open is a strong contender.
Domestic oil refiners will receive payments and support for infrastructure upgrades over a nine year period, ostensibly to shore up Australia’s refining capacity and improve national security. What will this subsidy cost Australian taxpayers? That remains unknown, thanks to the Government playing the ‘commercial sensitivities’ card.
Since the Commonwealth Government last attempted to rescue domestic refineries via subsidy, half those refineries have closed down. The 2020-21 budget saw $250 million go to securing Australia’s liquid fuel security, including improving domestic storage capabilities and keeping Australia’s four local refineries open. Less than a month after the 2020 budget, BP announced it would permanently shut down its Kwinana plant, with ExxonMobil announcing the closure of its Altona facility in Melbourne shortly after.
To enhance national fuel security we must do more than merely pump undisclosed amounts of money into our aging and uneconomical refineries. The Australia Institute’s submission to the Interim Report on Liquid Fuel Security suggests reducing our reliance on imported fuel and shifting towards locally generated power, a more decentralised energy system, and higher uptake of electric vehicles.
Unfortunately, this budget delivers nothing in the way of electric vehicle spending, and the Government is still sitting on the final version of the Liquid Fuel Security Review. But at least we have those emergency oil supplies in America, right?