Caltex Australia chairman Steven Gregg says the nation has never had a more flexible fuel supply arrangement despite recent concerns about how well oil reserves would hold up in a crisis.
Mr Gregg said while the number of refineries in Australia had fallen considerably in the past two decades, Australia has a greater capacity to import crude oil from different sources and store refined product.
‘We’re actually not running out of fuel,’ he said after Caltex’s annual general meeting in Sydney on Thursday.
‘We’ve actually got a more flexible supply arrangement as a country now than we’ve ever had.’
Caltex operates Brisbane’s Lytton refinery – one of four refineries still making fuel in Australia – and Mr Gregg said said the company is satisfied with the security of its fuel supply.
The International Energy Agency warned in a report this year that the closure of three refineries in the past decade and the lowest domestic production in four decades meant Australia had just 49 days’ worth of its net imports in reserve.
The nation isn’t expected to meet its IEA obligation to hold 90 days in reserve until 2026.
At present Imports cover almost half of the domestic demand for refined oil.
‘Oil stock levels are low by international comparison, resulting in a tight supply chain in a country where distances are long and considerable efforts are needed to respond to unpredicted fluctuations in demand,’ the IEA said.
But Caltex Australia chief executive Julian Segal said supply reliability was underpinned by importing from a range of Asian countries and the USA.
‘That’s really what reliability of supply is all about, not one or two more days of fuel sitting in tanks in Australia,’ he said.
Meanwhile, the company says it treats climate change seriously but said it was still two to three years away from disclosing an emissions reduction plan or its approach to climate change risk management.
Mr Segal said Caltex had ‘significantly increased efficiency’ at Lytton but said reducing emissions by half would require severely cutting production.
‘It is very easy to say you should reduce emissions,’ Mr Segal said.
‘We could reduce emissions by 100 per cent by closing Lytton but what would the implication be to the economy and to the wellbeing of Australians?’
* Queensland: Lytton, Brisbane (Caltex)
* Victoria: Geelong (Viva), Altona, Melbourne (ExxonMobil)
* Western Australia: Kwinana, Perth (BP)