Paul Murray: Australia doomed to squander its good fortune if it can’t lift its performance on energy security

Does Climate Change and Energy Minister Chris Bowen not read his own department’s reports that detail Australia’s critical reliance on fossil fuels? Or is it that ideological blinkers don’t allow him to understand them? Bowen surely can’t have missed the most recent departmental update report which showed oil remained Australia’s biggest source of primary energy consumption, at 41 per cent of the total, with gas and coal each 25 per cent of the primary energy mix. So that makes fossil fuel dependency in Australia 91 per cent of energy demand. Renewables provide less than 10 per cent of the nation’s needs, the proportion falling to about half that figure in the economy’s powerhouse, WA. Against that stark reality, this was Bowen’s simpleton argument in favour of renewables when grilled by reporter Liam Bartlett about our fuel shortages this week: “Renewable energy is a secure form of energy. The Australian sun cannot be interrupted by a war or anything else. “Solar energy has to travel 150 million kilometres from the sun. It doesn’t have to travel the 150km of the Straits of Hormuz.” Australian coal, oil, gas and uranium are already here. Right under his feet. And the “Australian sun” is interrupted at sunset every single night. What a dropkick. One of the possibly few good things to come out of the war in the Middle East is that it changes the way Australians think about energy and economic self-reliance. But is our political class up to grasping the challenges exposed by their policy failures that are now starkly evident to many more people? The modern deification of renewable energy was unfortunately based on the demonisation of fossil fuels and an illogical and outdated antipathy towards nuclear power. That was never going to be a sound basis for a national energy policy. Nor a prospering economy. The war has rammed home that the world’s machines still run predominantly on fossil fuels and petrochemicals are essential to produce fertilisers that make it possible to feed the nation. However, we no longer produce enough of either and when imported supplies are threatened our nation looks weak and vulnerable. Which we are. The blighted closure of the Kwinana oil refinery detailed here a week ago was a case in point. But even if it had remained open, would there ever be Australian-drilled oil to feed it when the penny eventually dropped about energy security? Here’s a few more facts that are so often missing in the green energy fantasy of a renewables-only future, the pathway to it paved in unending subsidies of inestimable billions. About 80 per cent of the world’s total energy consumption still comes from fossil fuels. It remains around 95 per cent for global transport. Those figures have barely budged in recent years, even though renewables are growing in the electricity sector. Transport, industry, heating and chemicals still overwhelmingly rely on oil, gas, and coal. The International Energy Agency’s 2025 review is the source of that data and it noted “global energy demand grew by 2.2 per cent in 2024 – faster than the average rate over the past decade. Demand for all fuels and technologies expanded in 2024.” All fuels. For the greenies, “renewables accounted for the largest share of the growth in global energy supply (38 per cent), followed by natural gas (28), coal (15), oil (11) and nuclear (8).” Note those figures are only percentage shares of the amount of growth, not the total supply. None of the four targets of green hate declined, despite the growth in renewables and the massive subsidies paid to encourage their use. These are the cold, hard facts. Even an over-abundance of Bowen’s gaseous emissions cannot change them. This war has irrevocably shown that we need to do something about our fossil fuel supply security – namely increasing self-reliance. At the moment, the Albanese Government is scratching around Asia for extra refined oil products to plug the holes in our shattered supply chain. It has also leaned heavily on our relationship with Indonesia – the biggest Muslim country in the world – to boost our urea stocks. But does anyone have confidence that when this crisis is over, this government has the wit, desire or ability to address the vital issues of fuel supply, fossil fuel production and energy self-sufficiency? Because the crisis that likely follows this one – which didn’t involve us directly and was not regional in nature – will almost certainly be worse if China continues its current expansionist path. As Opposition leader in 2022, two months before the election, Anthony Albanese replied to the Morrison government’s Budget saying Australia needed to be self-reliant in fuel with a plan to ensure supply. But in government he did not follow through. It took this war for him to extend the coalition’s financial support for the two remaining refineries and drop Labor’s “clean fuel” regulations to allow more product to remain in Australia. Labor talks up insignificant biofuel projects based on renewables, but won’t go anywhere near plans for self-sufficiency from exploiting our fossil fuel resources. So what needs to be done? It is a given that renewable energy is worthwhile. Australia has an abundance of sunshine and wind and it makes sense to harness what is available if it can be done economically. However, meeting the challenges highlighted by this crisis and remaining on the government’s Net Zero pathway will not be possible. Something has to give. Labor’s renewables-only destination is based on policies designed to make fossil fuel development uncompetitive. Penalising fossil fuels allowed subsidised renewables to grow. Albanese Government Ministers deceitfully argue there is no investment in coal-fired power generation because of cost and reliability issues, but the truth is their policies drove it out of the market. Intentionally. Those policies are incompatible with future energy security. They hamper all fossil fuel projects. However, we have very big untapped oil resources that could again supply the feedstock for Australian refineries, which currently use virtually no local crude. Australia produced 69 million barrels of light crude and condensate last year, mainly from LNG operations, but over 90 per cent was exported to Asian refineries. Our two refineries are now configured to process the 320 million barrels of heavier crude we import. Some big thinking about how we can expand our oil refining capacity to handle local crude is needed in a big hurry. However, Australia has ample supplies of easily-accessible coal that could be more quickly turned to the purpose of producing liquid fuels, given the timeframes also involved in cranking up oil production. China is rapidly expanding its coal-liquids (CTL) capacity because it is short of domestic oil and gas resources. It uses German technology developed before WW2 and which provided 90 per cent of the fuel for its war machine. About 8 per cent of China’s coal production from its massive reserves is used as feedstock for CTL and chemicals. The International Energy Agency expects this to grow 5-10 percentage points in the next few years. Victoria has huge lignite reserves and many proponents have long considered using them for petrochemicals as the State wound down its coal-fired power plants. Unlike most Chinese projects, some of the proposed Victorian ventures were based on carbon capture and storage, repurposing spent Bass Strait oil wells, because CTL projects have considerable emissions. However, Victorian Labor – in power for all but one term in the past 30 years – has stopped any new coal developments. Just this month, a major consortium advancing a $2 billion coal-urea project in the Latrobe Valley gave up and moved the proposal to New Zealand, principally blaming ideologue Energy and Climate Change Minister Lily D’Ambrosio, who has held the portfolio since 2014. Allan Blood, the executive director of the proponent, said the same urea technology could be used to make diesel and petrol. He had signed 25-year offtake agreements for the urea. “The war in Iran should be a national wake-up call to make more critical goods in Australia like fuel and fertiliser,” Blood said. Similarly, Labor’s intransigence on nuclear energy needs to be reversed immediately. We are increasingly burning gas to underpin the intermittency of renewables supplies. A smarter country would reserve gas for petrochemicals. Nuclear is a better baseload power choice. “As of February 2025, there were a total of 62 nuclear reactors under construction in 15 countries around the world with a total capacity of nearly 70 GW,” the previously-quoted IEA review reported, noting half were in China. For perspective, Australia’s average output of electricity is about 33GW – the amount of new nuclear capacity China is building. Egypt, India and Turkey each have about 5 GW under construction with another 9.5 GW from two reactors in Japan – reversing its post-Fukushima aversion – two in Korea, two in the United Kingdom and one in Slovakia. The Lucky Country is doomed if it pushes its luck any further.