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Thursday, 31 May 1984
Page: 2237


Senator WALSH (Minister for Resources and Energy) —I table the guidelines for the Liquid Fuel Emergency Act 1984 and explanatory statements. I previously advised that the liquid fuel emergency guidelines and an explanatory statement would be brought down in the Senate today. This is the first opportunity I have had to do so because there have been some technical difficulties in printing. I seek leave to have the statement incorporated in Hansard, Mr Deputy President.

Leave granted.

The statement read as follows-

Pursuant to section 41 (2) (b) of the Liquid Fuel Emergency Act 1984, I present instruments in the form of guidelines made by me under sub-sections 10 (1), 11 ( 1), 12 (1), 13 (1), 21 (1), 22 (1), 23 (1) and 24 (1) of the Act together with an explanatory statement to each instrument.

The guidelines under eight sections of the Act have been made in accordance with the requirements of s. 41. They set out the scope of directions which the Minister for Resources and Energy may issue to fuel industry participants in preparation for, or management of, a national emergency.

Preparations to date have been undertaken in close co-operation with the governments of the States and Northern Territory. The guidelines were circulated to draft to State and Northern Territory energy ministers and to the oil industry prior to the legislation being enacted. Comments received are reflected in the guidelines and earlier amendments to the legislation.

It was not possible, however, to resolve one particular matter in the time available. This relates to the description of certain petroleum products which are commonly referred to by more than one name. My department is consulting with industry on the matter. It is noted, however, that the consultations on this relatively minor question will not interfere with the operation of the legislation. The guidelines and the legislation as they now stand suffice to ensure that appropriate action can be taken, if needed, to manage an emergency situation with respect to any or all liquid fuels.

I regret that it has not proved possible to simplify the language of the guidelines as I and others who have reviewed them would have wished. However, I have directed my department to prepare a plain language guide to the Act and the guidelines in order that they may be more readily understood in the community.

The importance of these measures is emphasised by recent developments in the war between Iran and Iraq. The attacks on shipping have inhibited the movement of oil tankers in the northern part of the gulf. Although a stoppage of oil supplies does not appear imminent, there have been clear threats to the free passage of shipping through the Strait of Hormuz. In current circumstances the implications of a closure of the gulf shipping lanes for world oil supplies are less serious than at almost any time in recent years. The high levels of stocks of crude oil in the OECD countries and the availability of excess production capacity elsewhere in the world point to a capacity to cope with a disruption to the shipping of oil from the gulf. Australia's domestic oil supply situation is generally strong and, given our high level of self sufficiency in crude oil, we are well placed to meet the direct effects of any loss of imported oil supplies.

The Liquid Fuel Emergency Act and the guidelines are the central, legislative part of the comprehensive arrangements being developed to cope with a national liquid fuel supply disruption. Institutional arrangements for management of a national emergency are in place. Commonwealth, State and Northern Territory officials already meet through the on-going arrangements of the National Fuel Emergency Consultative Committee (NFECC). The oil industry has been involved previously in emergency preparations through the National Petroleum Advisory Committee (NPAC) which developed the recommendations on which the current legislation and arrangements are based. NPAC would provide the liaison links with major end user groups in assessing and ameliorating the impact of a fuel shortfall on end users. The National Oil Supplies Advisory Committee (NOSAC) is chaired by the Commonwealth and comprises representatives from States and the NT and each of the major oil companies. If a national fuel emergency is declared, NOSAC will act as the principal liaison link with the oil industry.

At the international level, Australia participates in the International Energy Agency's emergency oil sharing scheme. The 21 member agency continuously assesses international oil production and demand, monitors stocks and is able to co-ordinate action by member governments and the principal oil companies to ensure equitable distribution of available supplies. An important benefit of the scheme for Australia is the assistance it provides us in obtaining heavy imported feedstocks to balance with our light indigenous crudes to yield the proportions of end products required by Australian fuel users.

The present situation in the Gulf is a timely reminder, if that were needed, of the importance of ensuring that Australia's preparations to meet an oil supply emergency are fully effective. The liquid fuel emergency guidelines are an important element of those preparations.

Motion (by Senator Walsh) agreed to:

That the guidelines and statement be considered pursuant to sessional order 9 relating to government papers.