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March 31, 2014

Fuel crisis driven by foreign dependence

Mandating better vehicle efficiency is just one action required by Australia to address its fuel crisis − the ever increasing and dangerous dependence on foreign supplies of vehicle fuel.

The country’s largest motoring lobby group, the National Roads and Motorists’ Association, has warned of Australia’s growing dependence on foreign supplies of petrol in a report: Australia’s Liquid Fuel Security (Part 2).

fuel australia

Low stockpiles of fuels and ever increasing demand means Australia could find itself in a perilous position, in just a matter of days, if there was a major disruption to imports, the report said.

“…Australians will suffer food shortages, will not  have adequate access to medical services or  pharmaceutical supplies, will not be able to  get to work and, if the problem lasts for more than a few weeks, many will no longer have  work to go to. It is that serious,” the NRMA said.

At the turn of the century 60 per cent of Australia’s transport fuel came from foreign sources, by 2013 this had grown to 91 per cent. The NRMA forecasts this will grow to complete dependence by 2030.

In the same year the number of refineries operating in Australia could be zero, down from the seven operating in 2000.

fuel crisis

Being totally dependent on foreign fuel supplies represents a fuel crisis it said.

Diversifying the country’s sources of vehicle fuel is a crucial way to reduce demand, and therefore dependence on foreign supplies.

As a member of the International Energy Association Australia has a commitment to reduce national consumption of fuel by 10 per cent, but “there is little evidence of compliance with this requirement,” the NRMA said.

fuel tanker

One sure way to reduce demand without lowering the actual level of driving is to improve the fuel efficiency of the vehicle fleet. But the report notes Australia’s progress in this area is not good.

The United States, European Union, Japan, China and Korea all have fuel efficiency targets in excess of, and sometimes close to double, what’s planned by Australian governments.

Australia also has good access to alternative fuels such as liquid petroleum gas and biofuels. These products could also help alleviate the fuel crisis with the right government support.

Dealing with misplaced fuel subsidies and an underutilised rail network are two other areas where demand for petroleum could be reduced.

The NRMA has been agitating for government action to reduce fuel demand for many years and but said entrenched barriers to progress are extending the potential for a fuel crisis.

The problem requires systematic and coordinated action across governments and tough decisions, but this is much harder to organise than a reliance on ‘market forces’ the NRMA said.

But without government intervention to forestall the fuel crisis, it could well be a case of too little too late.

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