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Interview with Peter Stefanovic, Sky News

16 June 2020

Interviewer: 
Peter Stefanovic

Subject: Fuel security, fuel reserves

E&OE

PETER STEFANOVIC: The Morrison Government is working with the fuel industry to bolster Australia's domestic fuel security and ease pressures on the nation’s refineries as well. Well, joining me now is Energy Minister Angus Taylor. Minister, good morning to you. Thanks so much for joining us. Just before we chat about fuel, can I get your view on this Chinese wind turbine company that we just talked about? Is it your expectation that that will go ahead?

ANGUS TAYLOR: Look, Pete, these are rumours, so I know no more about them than you. What I would say though, foreign investment is obviously extremely important to this country but it has to pass a National Interest Test. That's why we have a Foreign Investment Review Board, a whole regime around it, we're making reforms to that to strengthen it. And if investments are to proceed from foreign companies, then they have to pass that foreign investment review test, the National Interest Test, and that's one that considers all the factors that might be relevant in ensuring that this is an investment that's aligned with the national interest.

PETER STEFANOVIC: Okay. So, just to clarify, you're unaware of this deal?

ANGUS TAYLOR: Look, I know about as much about it as you, Pete.

PETER STEFANOVIC: Okay.

ANGUS TAYLOR: And the paper today said that they were rumours. But look, the point I would make and the assurance I would give all Australians is we have a strong foreign investment review regime and any investment has to comply with the national interest.

PETER STEFANOVIC: On this though, would you have any national security concerns?

ANGUS TAYLOR: Well, I'm not going to speculate on rumours. I'll wait until the facts are clear.

PETER STEFANOVIC: Yeah, but from the information that you've read, does any part of that concern you when it comes to national security? In particular, a Chinese company potentially buying, you know, a key asset?

ANGUS TAYLOR: What I've read are rumours. But look, again, I just repeat that the National Interest Test is extremely important. It's applied and increasingly so because of reforms that are being made. A rigorous regime. We've set up the Critical Infrastructure Centre that's all about making sure we have control over our own destiny when it comes to critical pieces of infrastructure. And so this, if it proceeds, like any other investment, will have to comply with that.

PETER STEFANOVIC: Okay. Minister, just on the fuel - stocks are up - how much more can Australia store?

ANGUS TAYLOR: We're looking to store a significant amount more. I mean, we've obviously begun an expression of interest process. We announced that yesterday - I talked about that on your program a short while ago, Pete.

PETER STEFANOVIC: Yes.

ANGUS TAYLOR: And this is a very important part of the process. We've begun the process of procuring a strategic fuel reserve. We've begun the process of getting more local storage in place. We're working with the refiners - and this is an important part of the picture - we've relaxed some of the restrictions on them so that they can produce less aviation gas, less jet fuel, and they can put that into diesel which of course is critically important as a fuel source for industry and for transport. All of these are a package of reforms that ensures we have control over our own destiny in an emergency situation. During COVID we've done well. It's been, in fact, we've seen stocks increasing, as you rightly pointed out. But not all disruptions will be like that, and we have to be in a position where we can have complete control over our own destiny in the event that there is a scenario less favourable to fuel stocks than we've seen with COVID-19.

PETER STEFANOVIC: Okay, so when, so we've got a certain amount of fuel that is here in the country at the moment, and there is also so much that's parked offshore - whether it's on ships, or whether it's in other countries as well.

ANGUS TAYLOR: Sure.

PETER STEFANOVIC: So, when you've got a situation that emerges that requires, that might stop that fuel from coming here - how do you get around that? So let's say, a hypothetical, just a hypothetical that, say, there's a conflict that breaks out perhaps in the South China Sea. What sort of a problem might we be in then?

ANGUS TAYLOR: Look, there's a range of different Defence scenarios you can run. The very extreme ones, the Pacific is blocked.

PETER STEFANOVIC: Yes.

ANGUS TAYLOR: But of course, you know, they are very extreme, which is why we want to have more storage here in the event that should occur. But look, the broader point I would make is that 50 years we've had these international obligations around fuel stocks, 50 years we've been secure when it comes to fuel stocks. The world has managed this very well. We have managed this very well. But we do want to be in a position where we've got more local stocks. The fundamental point I'd make here is that we've traditionally sourced our fuel from Bass Strait. Local supply, Bass Strait is running down. We're seeking to replace it as quickly as possible with more gas and oil coming out of the Northern Territory. The Beetaloo Basin and McArthur basins, which are very, very prospective. That will help enormously if they prove to be as strong as we think they may be. But in the meantime we do have to have more local storage in place, and that's why we've begun this process. We're moving through it pretty quickly, Pete. We're looking to have those expressions in by early July, and then we'll work from there to put in place a more complete process to actually begin procuring local storages. But this is an important process and it's all part of recognising that we've got to have control. Government shouldn't be involved in every supply chain, that's for sure. But really critical ones we do need to be.

PETER STEFANOVIC: And just finally, Minister, on the Marinus Link - a $3.5 billion project, a massive project that was talked about by the Prime Minister yesterday. It's a bit unclear who's paying for that, though. So who is paying for that?

ANGUS TAYLOR: It'll be an investment like any other. These are regulated assets that deliver a return. Obviously, the Federal Government has indicated very clearly that we're interested in playing a role. We've already invested $56 million in getting early work done on business planning and some of the early works, and we'll work closely with the Tasmanian Government over the coming months to ensure that this has a path forward. We do think it's an important project. We do think it has great potential. It has the potential to deliver about 3,800 jobs, in northern Tasmania. A $7 billion investment in total. And it will provide firm dispatchable power, which is what we desperately need. More supply of firm dispatchable power in our system, in our electricity system that puts downward pressure on prices and keeps the lights on. It's good for industry and manufacturing at a time when we really want to encourage industry and manufacturing in this country. It's good for all Australians.

PETER STEFANOVIC: There is just, finally, just a question mark over the use of that money. There's some businesses that are quoted in the paper today as saying there are better uses such as solar and batteries that businesses might examine first. Is that a concern for you?

ANGUS TAYLOR: We know these pumped hydro projects are very low costs of storing electricity and they are a very effective way to give us dispatchable power. That's power that's available when you flick the switch, and you've got to have that. I mean, when the sun goes down you've got to have an alternative - I'm stating the obvious there, Pete - and it's complementary with all the solar people are putting on their roofs. So this is exactly the kind of project we need to shore up our system, put downward pressure on prices, keep the lights on, and of course it will be a huge job boom for northern Tasmania.

PETER STEFANOVIC: Okay. Energy Minister, Angus Taylor, appreciate your time this morning. Thanks for joining us.

ANGUS TAYLOR: Thanks, Pete.

ENDS