The 2024 Defence Fuel Symposium, held in early September in Canberra, highlighted the urgent need for a strategic overhaul of Australia’s fuel security in response to increasing global instability.
The rules-based international order that has helped maintain stability in the Indo-Pacific for decades is under threat. China’s rapid military expansion, coercive pressuring of neighbours such as the Philippines in the South China Sea, and aggressive words and actions regarding Taiwan have raised tensions and increased the risk of conflict. Simultaneously, climate change presents a profound threat, demanding a fundamental shift in how we manage our national fuel supply and reserves.
Fuel security is crucial for the Australian Defence Force (ADF). Without it, the ADF goes nowhere fast. To operate, it requires reliable access to the right fuel in the right quantities and right locations at the right time. While efficiency has been the focus for a long time, a shift towards effectiveness of fuel supply is now imperative.
As early as 2008, Australia’s liquid fuel vulnerability was identified as a strategic concern. This was further emphasised by the 2013 report on liquid fuel security. This report exposed our reliance on imported crude and declining domestic refining capabilities. Although the 2017 Defence Fuel Transformation Program made strides in addressing safety and resilience of the fuel network, the strategic landscape has evolved significantly since its inception.
Since 2012, Australia has lost six of its eight sovereign oil refineries, leaving us dependent on imported crude oil. The globalisation of our economy and reliance on a rules-based order exposes the fragility of our fuel supply chains.
Our sea lines of communication, vital for economic and military needs, pass through maritime chokepoints such as the Strait of Malacca and highly contested waters such as the South China Sea. These areas, which handle over a third of global trade, are increasingly threatened by geopolitical tensions and the risk of disruptions from military actions, piracy or blockades. The Ukraine war, global energy disruptions and the Houthi attacks on shipping routes in the Red Sea give a sense of what impact those actions would have if conflict were to occur in the Indo-Pacific. Similarly, the 2021 urea shortage, which disrupted diesel supplies and negatively affected the transport sector, exemplifies our vulnerability to external disruptions most acutely and shows what would happen in a moment of global crisis.
Given these global challenges, policymakers must consider the value of resilience. The current strategic environment demands enhanced preparedness. Any disruption to oil transport through critical maritime chokepoints could lead to significant delays, increased costs and the need for costly security measures and possibly naval resources.
Australia’s domestic force posture, which includes resilient bases in northern Australia, faces growing pressure from increased fuel demand and potential forward staging of allied forces. Despite efforts, our fuel reserves have not met the International Energy Agency’s 90-day minimum requirement since 2012.
These external challenges are then compounded by domestic ones. Limited road networks in northern Australia leave RAAF Base Tindal and ‘bare bases’ Sherger, Curtin and Learmonth—which have no permanent ADF presence but which can be rapidly activated in a crisis—reliant on fuel delivered by roads. These roads are vulnerable to wet season closures and dry season road melt, increasing operational risks. Moreover, additional fuel storage doesn’t mitigate the risks of supply shock if demand surges due to disruptive weather, regional unrest or direct military threats.
For these reasons, renewable energy and alternative fuels are essential for enhancing capability and should be evaluated based on specific platform needs. Advances in battery and hybrid propulsion systems, already adopted by commercial ships, could be applied to Naval support vessels. The Army’s Bushmaster electric vehicle prototype demonstrates the potential for electric power in military applications, highlighting the need for more prototype testing across ground platforms.
With aviation consuming two-thirds of Defence’s fuel, developing sustainable aviation fuel (SAF) is crucial. The recent SAF test by the RAAF Roulettes is promising, but industry needs a steady demand to justify investment in ramping up sovereign production capability. Countries like the US and Britain have led the way in using alternative fuels, enhancing operational capability and reducing fossil fuel dependence. Australia should follow by certifying alternative fuels for the ADF, enhancing interoperability with coalition partners.
Producing fuel domestically is also a strategic necessity for achieving net-zero targets, supporting the agriculture sector, reducing reliance on imported oil, and utilising the new northern fuel storage facilities. As shown elsewhere, sovereign biofuel production requires joint ventures, low-interest loans, grants, streamlined approvals, increased research and development funding, long-term supply agreements, government-funded training and tax incentives.
The evolving global landscape necessitates reducing reliance on imported fuel, diversifying sources across ADF platforms and strengthening strategic fuel reserves. Investment in research and development for renewable energy and alternative fuels would extend their capabilities and positioning Australia as a leader in clean energy technology.
With legacy platforms set to operate beyond 2050, balancing sustainability with operational feasibility is key to meeting net-zero challenges.
The 2024 Defence Fuel Symposium reinforced that fuel is a capability, not a commodity. Strengthening industry partnerships, enhancing interoperability and prioritising innovative, cost-effective solutions are key to ensuring Australia’s defence fuel network can adapt to modern demands.