Australian freight transport’s heavy reliance on diesel imports seen as an economic and social vulnerability
With the Energy Green Paper a year old and the White Paper due next year, the natural gas clamour has got louder with the release of a book and a report at Parliament House in Canberra.
The well-flagged launch of Transport Fuels from Australia’s Gas Resources– Advancing the nation’s energy security, a study backed by an alliance of gas-friendly interests, arrived along with the release of Engineers Australia’s Energy Security for Australia report.
Both focus to varying degrees on the nation’s abundance of natural gas and almost total reliance on liquid fuel from overseas.
The book is the product of research by the University of NSW, the Australian Strategic Policy Institute, CSIRO, Geoscience Australia, the Grattan Institute, the South Australian Department of State Development, the United States Studies Centre and CO2CRC.
Book editors professor Robert Clark and Dr Mark Thomson say it’s timely that the use of Australian natural gas as a transport fuel be considered as part of government policy to strengthen the nation’s energy security.
“One way to reduce Australia’s exposure to potential disruption of supply of imported oil is to start using more of our own natural gas for transport, particularly in the road freight sector,” Clark says.
“Australia’s fuel self-sufficiency could be increased to 50 to 70 per cent by 2030 through using natural gas as a transport fuel, compared to just 30 to 40 per cent using current fuel sources.”
Given 75 per cent of Australia’s road freight is carried by just 87,000 heavy articulated trucks, the publication calls for government and industry to work together to help accelerate increased uptake of domestically supplied natural gas as a trucking fuel.
It argues that the study offers a “focused strategy for insuring against oil supply disruption at a modest cost”.
In his chapter, ‘LNG for Australian Trucks’, Clark argues that a payback for operators of two years or less is crucial for its penetration into the diesel market and that, left solely to the market, the penetration rate is likely to be 5 per cent or less over the next five years.
“Regulatory factors which can drive this are incentives such as an NG vehicle rebate and fuel excise offset, for which there is established precedent internationally – particularly in the United States,” he writes.
“The key barrier for significant LNG transport fuel penetration is the cost and commercial risk for fuel suppliers of scaling up to LNG plant around 1Mt/a [1 million tonnes a year] capacity. Mitigation of this risk requires national coordination, infrastructure investment, and a business plan for supply chain rollout whereby margins are delivered for all industries involved in the chain.”
Among those supporting the publication in its pages are gas freight vehicle propulsion proponents SeaRoad and Isuzu.
“Chas Kelly Transport is one of the early adopters of LNG in road transport,” SeaRoad Holdings chairman Chas Kelly says.
“The recent investment by SeaRoad Holdings in a new LNG-powered ro-ro cargo ship will enable Tasmania to be linked to Australia with the cleanest and most efficient ship of its type in the world fuelled by Australian natural gas – a testament to the case put forward by professor Clark and his colleagues.
“Natural gas as a transport fuel is a real and valid option for Australia.”
Isuzu Australia director and chief operating officer Phil Taylor adds: “This authoritative work shows Australia has a natural gas advantage that should translate into a world-leading gas transport industry driving jobs and economic growth.”
Meanwhile, co-author − with Dr Athol Yates − and former Australian Defence Force engineer Neil Greet says Energy Security for Australia seeks to draw attention to Australia’s current energy security flaws and maps out a pathway to a stronger energy future.
A necessarily broader take on energy vulnerabilities, the report examines the issues from a public policy rather than transport industry perspective.
“Now more than ever it is important to acknowledge our current energy security policy settings are insufficient, and open the discussion up to a whole-of-society, whole-of-government perspective,” Greet states.
“Australia’s energy future is one of uncertainty and risk. We need to ensure resilience is built into our national energy strategy.
“There is a need to shift government perceptions of energy from just a market based economic view-point to broader thinking, which encompasses wider risks of energy policy aligned with national security issues.”
The energy security report can be found here.