Former defence department secretary Dennis Richardson has described the decision to house Australia’s strategic fuel reserves in the US as “an absolute joke”.
The former senior public servant and diplomat also told the Australian Bureau of Agricultural Resource Economics and Sciences (Abares) Outlook conference in Canberra on Tuesday that Australia’s freight network was vulnerable due to rail transport bottlenecks that had been highlighted during recent flooding.
Richardson condemned the Morrison government’s decision in 2020 to house the stockpile of crude oil in the US.
“It’s an absolute joke to have our national fuel stockpile being held in the United States,” he said.
“That’s a really important issue for us. It’ll be interesting to see whether the defence strategic review conducted by [former Labor defence minister] Stephen Smith and [former defence chief] Angus Houston has addressed that issue. It certainly needs to be.”
The Albanese government argues it has improved the situation since taking office last year.
From July 1 this year, large importers and refiners must hold minimum levels of petrol, diesel and jet fuel in Australia in case of major supply disruptions and emergencies. Labor has also committed $200m for additional diesel storage capacity in Australia, with the first tanks constructed in 2023.
“The government is putting Australia’s fuel security framework back on track after years of Coalition neglect,” the spokesman said.
Under International Energy Agency rules, each country has an obligation to hold emergency oil stocks equivalent to at least 90 days of net oil imports to avoid a major disruption to oil supplies.
As of December 2022, Australia had 59 days of stock held onshore, according to the latest Australian Petroleum Statistics.
Richardson warned that nations had changed the way they were thinking about the global economy, in part due to escalating environmental pressures caused by the climate crisis.
Those challenges were becoming harder to address in a globally coordinated way as a result of the pressure on institutions like the UN, he added.
Australia’s record agriculture returns was the focus of the Abares conference, which heard that after three wet years farm production is expected to hit a high of $90bn. Average cash incomes for broadacre farms are forecast to be $327,000 this financial year, though that may be constrained by high prices for fuel and fertiliser.
But the disruption of the pandemic and widespread flooding across Australia also featured heavily.
Richardson, who is also on the board of transport company Linfox, said the floods highlighted problems in supply chains, particularly in the Kimberley region.
Flood damage to the rail line that links the country meant freight to the Northern Territory had to go via road through New South Wales and Queensland. Richardson said transport companies were aware of bottlenecks that could cause supply chain issues.
“There is one particular point in South Australia where you can essentially cripple north-south rail links and east-west rail links all at one go,” he said.
“Why in the hell the government doesn’t sort that out in five minutes is beyond me. And I think that’s more important than thinking of a sovereign supply chain in global terms.”
In January last year, flooding affected the railway lines in South Australia, disrupting food deliveries to the Northern Territory and Western Australia. The defence force had to drop 20 tonnes of food and supplies to Coober Pedy.
Many supermarket shelves in the east Kimberley remain empty this week due to flood-affected roads.
The agriculture minister, Murray Watt, told the conference the Australian farm sector was often forced to confront issues “months or sometimes years before the rest of the nation”.
Watt said ad hoc temporary injections of funding left Australian farmers exposed to a growing risk of biosecurity outbreaks, chronic underinvestment in training and skills shortages across the sector.
“Denial of climate change has left farmers vulnerable to extreme weather and left our international markets asking tough questions about our production standards,” he said.
“Running down our manufacturing industry has left us reliant on expensive inputs like fertiliser coming in from overseas. All of these problems, we could have seen coming.”
