18 January 2021

SUBJECTS: The Morrison Government’s failure to protect Australia’s fuel refining capability; closure of BP’s Kwinana fuel refinery. 



SUBJECTS: The Morrison Government’s failure to protect Australia’s fuel refining capability; closure of BP’s Kwinana fuel refinery. 
OLIVER PETERSON, HOST: An IBISWorld report is showing that the closure of the BP refinery in Kwinana is going to wipe out more than one-fifth of Australia's fuel-making capabilities. Does that fly in the face of what Angus Taylor, the Energy Minister, told you right here on Perth Live only a matter of months ago that we were going to be stockpiling, we were going to be making and storing as much fuel as possible to prepare Australia for what may lay ahead? On the line is the Member for Brand, Labor's Madeleine King, and she joins me live on the program. Madeleine, you'd be very, very disappointed about this. I know you have a personal connection to this refinery. Good afternoon.
MADELEINE KING, SHADOW MINISTER FOR TRADE: Hi Ollie. Yes, it is extremely disappointing and I do, as many people know, have a personal connection. My dad was one of the first workers at BP Kwinana in the late 50s when it first opened. And I still have a lot of old friends from school who have been working there and are about to lose their jobs. There's the capability issues, as you say, but we must remember that there's over 600 families that are going to be affected very shortly, quite frankly, and these are jobs that are hard to come by and they're hard to replace with any other jobs.
PETERSON: As you say, 590 jobs will go as a result of this closure. It will be converted into an import terminal when the production stops. It'll obviously affect your electorate as well Madeleine?
KING: Yes, absolutely. That's a lot of jobs and those workers, those permanent workers and the contract workers, come from all around Rockingham and Kwinana and nearby. It's been the mainstay of the community and the economic backbone of the whole of the Kwinana industrial strip, so it's a massive loss and it can't be underestimated. You mentioned at the start about the capability issue, and there's not much refining capacity left in this country. This is the biggest refinery in the country and losing it means a fifth of our capacity goes and when you lose this capacity and capability to refine crude oil, you have less and less options available to you in times of crisis. That's what WA is going to run into. We are an isolated capital city. Through COVID, as we know, we've been able to shut borders but it also has other ramifications where we can have our supply chains disrupted from other events. So imports have to come in by sea and when you have crude oil that has been imported forever into BP, you can store that for as long as you want. But there's no point having crude oil if you don't have a refining capacity and that's the option that's taken away from this state now. We can't stockpile the crude oil that that you could stockpile forever, because we can't refine it anymore and that's a real loss of our capability, our capacity, our fuel security integrity. It beggars belief that Angus Taylor and the government of Scott Morrison haven't thought about this. They announced the rescue package in the Budget in October. Three weeks later BP announced it is closing. So it was meaningless. It was always meaningless. And now it means nothing.
PETERSON: They put $200 million on the table, the Federal Government, for fuel security, for new storage facilities, but as you mentioned there, if we face some sort of a crisis somewhere down the track, Madeleine, where we're unable to import as much as we thought we could, there's been a disruption to the supply chain, all of a sudden particularly over this side of the country on the west coast, we're even more isolated than ever.
KING: Yeah, absolutely, that’s right Ollie. This rescue package is going to work for the other three refineries on the east coast, and that’s good and I'm happy for them. But it leaves us even more isolated and vulnerable than we were before. We've got the biggest naval base in the country just opposite the BP refinery and we've got a whole agricultural industry that needs those fuels to keep going. Obviously, there are less planes flying, but in WA a lot of Avgas still gets used, keeping the mining industry going. So there's a lot at stake here. And what's going to happen is we will be reliant on imported refined fuels, but you can only stockpile them for a few months. Refined fuel doesn’t last forever, and you can't stockpile the quantities you need forever. So, this is how we've run out of options because of an inability to make sure we keep a refining capacity and keep nearly 600 jobs going on the Kwinana strip.
PETERSON: Is this something that you can put pressure on the Government and your own party, Madeleine King, to come up with some sort of a policy at a federal level, to give an incentive or to give that fuel security to keep a refinery open or reopen and rebooted, if Labor were to come into office, say at the next federal election?
KING: There's a lot of people working on this problem. BP announced this without warning, they dropped this bombshell leaving many of the possibilities, they're apparently not willing to sell the assets that is the BP refinery that they built many years ago. So without their cooperation there's not much others can do, and because it was such a sudden announcement the options just aren’t there so much. We're in opposition and I dare say if we were in government we would be putting a lot of pressure on BP, but the actual government of the day, Scott Morrison’s government, is not putting any pressure on them at all.
PETERSON: Could the refineries be nationalised?
KING: Well, I'm not a fan of nationalisation, I want to be very clear on that. But there is no doubt it’s a sovereign capability. We talk a lot about these things these days. I don't think it should be nationalised but I do think there has to be options for government to make sure these capacities are retained. It is in a time of crisis, too. There is less fuel being used, no doubt about it, but that'll kick back again. And the other thing is, fuel usage will change in the next 20 to 30 years. And everyone knows that, refineries know that. But there's a difference between planning for that change of usage and just cutting and running like BP is, and the government allowing that to happen. So it's pretty grim times for fuel refining in this country, and certainly terribly negative for the women and men that have worked at BP for many years.
PETERSON: Appreciate your time, you have a good afternoon.
KING: Same to you Ollie. Take care.