Updated ,first published
Prime Minister Anthony Albanese has blasted the previous Coalition government for its “mistake” in allowing four oil refineries to close, a day after a fire at one of Australia’s two remaining refineries that is running low during the ongoing oil crisis.
The government has also ruled out foreign interference as a reason fire at the Viva Energy refinery in Corio, near Geelong, which exploded and caught fire on Wednesday night and burned until Thursday.
Albanese visited a damaged oil refinery Friday morning with Deputy Prime Minister Richard Marles and Energy Minister Chris Bowen.
“There were six refineries in Australia when we left office in 2013, and when we came back (in 2022) there were two. That was a mistake,” Albanese said.
On Thursday on the Viva website, Australian Workers Union branch president Ross Kenna urged the federal government to “start taking fuel security seriously”, including investing in remaining facilities.
“Once you lose self-control, it’s hard to rebuild,” Kenna said.
“We are an island nation, we can do this ourselves, we have the ability if we have the investment. So we need to invest in these facilities, and make sure we hold international organizations accountable.”
It will cost at least hundreds of millions of dollars to improve fuel security, which could have unpleasant consequences for next month’s budget.
The most recent plan to build additional storage and refueling capacity cost $260 million in 2019, saving 780 million liters of diesel. This represents approximately 20 percent of the gasoline, jet fuel and diesel in the nation’s strategic reserves.
Australia has approximately one month’s worth of petrol and diesel in storage.
Construction and fuel prices have risen sharply since then, with experts saying prices may double.
The fire, which took 13 hours and 100 firefighters to put out, has forced the Viva Energy company to reduce its production of some oil while the investigation continues to determine the cause of the fire and the extent of the damage.
Production in the factory has decreased to 80 percent of diesel fuel capacity, 80 percent for aviation fuel and 60 percent for motor fuel while the investigation into the fire continues.
The the timing couldn’t be worse: The Viva refinery, one of only two of its kind left in Australia, was at full production capacity since the US-Israeli war against Iran started on February 28, and was producing up to 120,000 barrels of oil per day.
Marles said the intervention of foreign countries has been rejected as the cause of the fire. “All of that, I think, has been rejected,” he said. “I mean, obviously the whole investigation is ongoing, but that’s not what anybody thinks happened here.”
Albanese also said the fire would not move Australia to the third stage of its oil security plan, which would lead to the adoption of practical measures to limit the use of oil.
“The event here will not cause any change,” he said. “We will give information tomorrow (Saturday) about the existing oil facilities. Oil continues to flow in.”
Albanese said the fire was “regrettable” given its timing, but most oil production continued despite the incident.
“The advice we received today is that 80 percent of diesel production continues, 80 percent of aviation fuel continues. It’s slowed down a little bit because of the environment there, but 60 percent of gasoline production continues,” Albanese said.
There are hopes that the plant can “boost” production following the fire.
It is known that the fire started in some pipes in the plant due to a technical error, and despite producing a lot of smoke, it was finally contained to an area of 50 square meters. Albanese thanked emergency workers during his visit.
On Friday morning, Fire Rescue Victoria crews remained at the scene, while a HAZMAT team was still conducting aerial surveillance around the area.
Viva chief executive Scott Wyatt would not commit to when the station would return to full production, saying the priority for now remains maintaining safety.
“I think there will be no impact on what we supply to the Victorian market as a result of this incident,” he said, vowing not to pass on any increase in fire-related costs to consumers.
To visit the Viva refinery, Albanese shortened trip to Brunei and Malaysia aiming to get more oil shipments.
An extra 100 million liters of fuel will arrive in Australia as a result of the visit, and Marles said that would significantly reduce Viva’s output cuts.
Albanians visited Singapore last week for the same reason.
— with Daniel Lo Surdo
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Mike Foley is the climate and energy columnist for The Age and The Sydney Morning Herald.Connect through email address.
