Drill, build, approve: How Australia fixes its energy crisis

First published in the Financial Review

The uncertain EPBC and the deeply unsophisticated domestic political debate on energy has guaranteed 42 years of Australian oil stays underground.

It seems unbelievable that so few lessons were learnt from the COVID-19 pandemic about Australia’s resilience and security.

Australia is literally at the end of the supply chain for a range of basic products that keep our economy and society afloat – liquid fuels being one of them.

The development of gas and condensate oil fields in Browse, North West Shelf and Barossa each took seven or eight years to achieve EPBC approval.  

We look like a totally dependent nation. We have a last-minute Band-Aid approach to everything. We don’t have a plan, and it’s no way to run a country.

One of the reasons there is such distrust in politicians is that the typical Australian feels their leaders have failed to prepare the nation for shocks. Now we have had two major shocks in the space of half a decade.

We could not get enough masks in 2020, and we could not get enough fuel in 2026.

The almost 50 per cent increase in petrol prices is the highest in the Organisation for Economic Co-operation and Development and vastly higher than the 15 per cent OECD average and in nations such as Japan and South Korea, both of which have next to no oil mining prospects.

Australia has been operating on the basis that everything will be OK all the time. Sure, there has been a huge amount of talk about critical minerals and trying to promote more manufacturing.

“At the most basic level, EPBC rules should promote the basic national security interests of Australians.”

But when the Iran war opened up, Australia was exposed because there was not enough fuel to run the country.

In the wash-up, there will no doubt be much debate about the 30 days of liquid fuel reserve and the capacity of Australian fuel generation.

One thing that must be on the table is the ability of Australia to exploit its natural resources.

It is clear environmental laws, particularly the Environmental Protection and Biodiversity Act (EPBC), have piled on costs and red tape while holding back our resilience as a nation because energy developments do not get approved or are delayed forever. This includes gas and oil, but also renewable energy projects.

There are two reasons that we must fix this. First, we need oil, and other sources of energy such as gas, and we have heaps of it.

Australia has 42 years of oil. The US government found there were six basins across Australia holding an estimated 403 billion barrels of shale oil, with 17.5 billion barrels considered to be recoverable.

Our economy is transitioning but as we transition we need plentiful amounts of liquid fuel. Our current model seems to be that we ignore our own endowment and simply import refined and unrefined fuel by ship from Asia.

Worse still, we are fine to export our fuels overseas so they are expended there, but somehow don’t deem it OK to use them here. It’s the same fuel.

Leaders should be honest. The Australian debate on energy is embarrassing. The truth is that we need energy of all forms.

The current model has left our economy exposed, and our security as a nation is threatened.

We should want Australian oil as much as we want Australian critical minerals or Australian renewable energy. We need it all.

It’s pretty simple. If we don’t get more oil, we will have to import more. Just as if we do not get more industrial-scale renewable energy, we won’t get the data centres needed to support artificial intelligence.

Secondly, we are going nowhere with Labor’s EPBC laws.

The development of gas and condensate oil fields in Browse, North West Shelf and Barossa each took seven or eight years to achieve EPBC approval.

As the current crisis has shown, there’s a competitive market for resources and energy. Given the nature of mobile capital, delays in decision-making of this magnitude will just push investment away.

Environment Minister Murray Watt said last November that he’s fixed the environment laws for business. The truth is, he gutted the primary legislation and left most of the details to future regulations and bilateral agreements with the states.

Industry was hoping the new EPBC rules would streamline the process for energy projects, but oil and gas ventures were specifically removed from the fast-track process in a deal agreed by Labor and the Greens. This deal directly undermines our energy security.

After six months, we have not even seen the regulations and no state bilateral agreements have been signed. We have more uncertainty than ever.

Australia needs energy security and the EPBC is the biggest handbrake.

It appears some 90 renewable projects are caught up in EPBC bureaucracy, as well as 40 gas and oil projects.

The Taroom Trough in Queensland is the latest Australian opportunity to drill for oil. It’s imperative that EPBC promotes developments such as these, but you can’t even see the rules.

EPBC should protect the environment as well. But at the most basic level, EPBC rules should promote the basic national security interests of Australians.

The uncertain EPBC and the deeply unsophisticated domestic political debate on fossil fuels versus renewables have guaranteed that 42 years of Australian oil stays underground.

The lack of resilience specifically on liquid fuels was identified by the late Senator Jim Molan after the last pandemic. Let’s make sure we don’t make the same mistake again. Our federal environment laws must promote the security and wellbeing of the Australian people as well as the environment.

We owe it to future generations that well-intentioned but poorly functioning laws do not result in Australia becoming a weak and dependent nation.

Andrew Bragg is a Liberal senator for NSW, and shadow environment minister.