Oil vulnerability: out of sight, out of mind

By ignoring transport energy, Matthew Groom’s proposed energy strategy will be looking at less than half the picture [19 August 2014 | Peter Boyer]

Oil price volatility is our biggest energy threat. PHOTO SAM ROSEWARNE, MERCURY HOBART

Oil price volatility is our biggest energy issue. PHOTO SAM ROSEWARNE, MERCURY HOBART

Energy minister Matthew Groom has rightly identified a state-wide energy strategy as an important government priority, and last week he invited Tasmanians to help out by putting in submissions.

An issues paper covers power generation, building thermal efficiency, billing information and just about everything else a government and its community should consider in planning and managing energy used in homes, offices, factories and other buildings.

Which would be fine if that’s all there is to an energy strategy. But it’s not even half of it.

The biggest single component of energy costs in Tasmania is transport. All our petrol and diesel fuel is imported, costing Tasmania about $1 billion annually or about $2000 a year for every person in the state. Transport fuel consumes about 56 per cent of household energy budgets.

While noting that high petrol prices encourage more fuel-efficient motoring, the issues paper says that because we’re completely dependent on oil imports the government can do little to bring those prices down. So does that mean it’s pointless to include it in an energy strategy?

An increasingly volatile global oil market in coming years is expected to have a significant impact on business and household budgets, which may be enough to cripple an already-stressed Tasmanian economy. No sensible government would leave this policy field entirely in the hands of others.

And there’s plenty we can do, if we put our minds to it. The government needs look no further than two important publications dating from late last year.

The Tasmanian Oil Price Vulnerability Study was commissioned by Nick McKim, then Greens leader and a minister in the Labor-Green government, and released publicly in December 2013.

The release was a low-key affair, as if the government didn’t want it to be noticed. But it offered valuable data and expert analysis about the impact of a volatile global oil market on the Tasmanian economy, pointing out our island’s special vulnerability to supply and price fluctuations.

The study found that the Tasmanian economy was much more dependent on freight- and fuel-intensive export industries than the Australian average. Our big exporting industries of aluminium and other metals, mining and forestry products were significant losers from oil price rises.

Analysis of past trends showed a big rise in Tasmanian oil consumption over the past decade, while projections for the next 20 years showed demand for freight transport nearly doubling.

According to Monash University modelling for the study, if Tasmania’s present level of reliance on imported fuel continues, real wages will fall further behind the rest of Australia while declining productivity and investment will have a severe impact on our exports.

But the oil price study wasn’t all bad news. It identified changes to transport operations and other measures in non-transport areas which, while reducing our oil price vulnerability, would also make us more resilient in dealing with other challenges, including climate change.

Some of these suggestions, such as minimum fuel efficiency standards, depend on national policy shifts, but most of them are capable of being largely or wholly implemented by a Tasmanian government with a bit of political nous.

Some of them were also listed in the second publication I mentioned that came out in late 2013, Climate Smart Tasmania.

Like the oil price study, this was guided through its difficult development by a dedicated band of public servants and some expert consultants’ advice. It was a multi-year exercise with extensive public consultation involving a wide cross-section of the Tasmanian community.

The result is a treasure-trove of ideas that which would enhance policy development for any government of any political persuasion. Among its 81 carbon abatement and adaptation measures were 11 actions designed to make Tasmanian transport less reliant on imported fuel.

I downloaded these files when the two reports were published. But here’s a thing: neither of them now seems to be accessible on the relevant departmental websites. I did a search for them and drew a blank in both cases.

This isn’t surprising. Though the two documents were non-partisan and refreshingly non-political, incoming governments of whatever colour like to foster the illusion that good comes only from their own side of politics, so they had to be quietly pushed off the stage.

Matthew Groom has given assurances that he has read the “Climate Smart” strategy, and that’s to his credit. He may well pick up on some of the good ideas there and adopt them as his own. I hope so.

I hope, too, that in developing his energy strategy he’ll consider the elephant in the room which is transport, and take time to consult the oil price study of last year with its fine analysis of the closely-coupled future of transport energy and the Tasmanian economy.

His energy strategy process may yield a perfectly sound guide to planning electrical and other stationary energy. But if he ignores the transport conundrum he’ll fail to deliver any sort of comprehensive solution, to the detriment of our whole economic future.

Securing the best energy strategy possible for Tasmania will require Groom to break a mould. He’ll have to accept that this is bigger than party politics and that good ideas can come from anywhere. And he’ll need to reach out for support from across the Tasmanian community.

It won’t happen, you say? Maybe you think that politicians don’t have the bottle or the largeness of mind to take such a step, but I’d like to think Groom has it in him to prove you wrong.

• The deadline for submissions about an energy strategy is September 8. Emailed submissions may be lodged with the Department of State Growth, energystrategy@stategrowth.tas.gov.au

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One Response to Oil vulnerability: out of sight, out of mind

  1. Thanks for highlighting this issue, Peter. I was looking myself for where the Tasmanian Oil Price Vulnerability Study document could be found and came up against the same blank as you on the relevant department web sites.
    I also recommend the NRMA commissioned report on fuel security (available at http://www.mynrma.com.au/about/australias-liquid-fuel-security.htm ) which indicates Australia only has approx. 3 weeks supply of liquid fuels in stock at any given time and no real contingency plans for fuel security.

    Time for Tasmania to seriously look at electric vehicles as part of our future energy strategy. Particularly as Melbourne has a growing number of EV charging stations (32 at last look), so presumably a lot of “green” tourists that would love to bring their electric vehicle with them to Tasmania, if only we had a few charging stations here to service that need!

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