National News

Australia in talks with US over oil supply

Car and truck drivers are split over a plan to access millions of barrels of oil from America's emergency reserves to boost Australia's supplies.

The Morrison government is negotiating with the Trump administration to access America's own fuel reserve, as Australia hunts for a way to boost dangerously low levels of fuel held on domestic soil.

Australia's largest automotive association, NRMA, said the plan is a good approach in theory.

"It would definitely solve some of our low reserve problems but it's only one short-term solution," NRMA spokeswoman Bridget Ahern told AAP on Monday.

"It will take time for the oil to get over from the US so it's not a matter of just clicking your fingers and it being here."

But the Australian Trucking Association said any emergency stock must be in Australia.

"The United States is on the other side of a very wide ocean," chair Geoff Crouch said.

"It would not provide security for the Australian economy if there is a disruption to international supply chains."

Labor backed the truckers, saying the government's plan wasn't good enough.

"I'll tell you what would shore up Australia's fuel security, and that's to actually have fuel security here in Australia," Opposition Leader Anthony Albanese told reporters in Sydney.

"So a strategy here, not a strategy that says if we run out, the US will send us some in support."

So-called exchange deals allow countries to boost immediate fuel levels in return for giving the same amount of higher quality oil back to the US.

It would take between 20 and 40 days for oil reserves to be sent to Australia from the US, Energy Minister Angus Taylor told ABC radio.

It would also need refining once here.

His own department's figures showed in May there was enough crude oil and automotive gasoline onshore to last Australians 28 days, and 22 days' worth of diesel including industrial fuel.

On the measure of an international agreement mandating 90 days of oil stockholdings, Australia had 60 days.

Mr Taylor has not outlined how much such a deal with the US would cost, merely saying it would be "effective but also efficient" for taxpayers.

"We can solve this problem, make sure we can avoid the worst impacts of disruptions to the oil industry globally and at the same time avoid an impost on taxpayers," he told reporters in Goulburn.

Negotiations with the US started "some time back", based on the early findings of a fuel security review, and Mr Taylor hopes they will finish quickly.

Independent MP Andrew Wilkie said it was "cooking the books" to spruik this as a solution.

"It also relies on the goodwill of the US, but Donald Trump can't be trusted to honour agreements at the best of times, particularly if there was a global shock and we actually needed to access this oil," he said.

The Greens echoed a call for Australia to embrace electric cars and public transport.

Mr Taylor also wants the International Energy Agency treaty, which sets the 90-day supply agreement, to be rewritten to take into account oil in transit to Australia.

If oil on its way to Australia was counted, the country would have 92 days in stock.

The government is yet to release the final findings of its fuel security review, launched in May last year.

-----

AUSTRALIA'S OIL STOCKS MAY 2019

* Onshore:

- 28 days of crude oil

- 28 days automotive gasoline

- 22 days of diesel

* Under International Energy Agency definition, 60 days of fuel

* 28 days more onboard ships destined for Australia

* 4 days held overseas awaiting delivery

LOWEST POINTS

* Crude oil: 20 days in January 2013, October 2013, May 2015

* Automotive gasoline: 15 days in December 2010, 16 days in November 2014

* Diesel: 10 days in November 2012

* IEA definition: 50 days in November 2018

(Source: Department of Environment and Energy)

© AAP 2019