Senate Inquiry Into Fuel Security - Ian Bray Opening Remarks – Thursday April 9, 2015, Melbourne

On Thursday April 9 2015 the MUA appeared again at the Senate Inquiry into Fuel Security

Below is a transcript of Assistant National Secretary Ian Bray's opening remarks.



Ian Bray and Penny Howard outside the Inquiry



When this committee was struck, there were 5 Australian-crewed tankers on long term contracts to Australian refiners, each carrying up to a million tonnes of refined petroleum products around the Australian coast each year.


By the time we made our submission to the Committee in November, Viva was in the process of removing the Tandara Spirit from the coast.


At the time of the Committee’s Sydney hearing in February, Caltex was removing the Hugli Spirit from the coast.


The committee will remember Glen Mallon, who appeared at the Sydney hearing. BP has announced it will be removing his ship, the British Loyalty, and making him and the rest of the crew redundant in May.


If this ship is removed, from June 2015, there will be only two remaining Australian clean petroleum product tankers - at a time when Australia is becoming more and more reliant on ships to carry refined petroleum imports due to refinery closures. The Department of Industry’s own consultants estimate that by 2016-17, the equivalent of between 53 and 64 full-time tankers will be required meet Australia’s needs.


The situation makes no sense.


In the short term, there are good arguments in favour of re-deploying the British Loyalty to another part of the coastal trade.  BP loads over 900,000 tonnes of refined petroleum on to international ships in Kwinana, cargo which is carried to other Australian ports. Over 700,000 tonnes of this trade is large cargos to the Eastern states. We have analysed the cargos that BP has put on to international ships this year, and there is a good trade that would keep a ship like the British Loyalty employed all year. Alternating deliveries between Adelaide, Burnie, and Port Botany, in the same pattern as BP chartered other ships to do in 2014, it would carry 646,000 tonnes of cargo per year. This is a sustainable trade – the Department of Industry’s own consultants predict that domestic exports from Kwinana will remain steady at least until its 2016/17 scenario.


In the medium term, we believe there is a good case to be made for using Australian ships to carry some portion of refined petroleum international imports. If the government is going to allow refineries to be closed and not mandate the retention of any fuel reserves, this is the very least we can do. It is also a cost-effective solution – but I will let John speak about that.


We made this recommendation in our original submission, and at our appearance before the Committee in February we were asked some questions on notice about this recommendation. In particular, we were asked how much such a measure would cost, in cents per litre of petrol.


To this end, we have commissioned an independent shipping expert, John Francis, to make some calculations, and also to make a broader assessment of some of the security issues in our petroleum import supply chain.