WEBVTT - Can Singapore help with Australia’s fuel problem?

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<v Speaker 1>I'm Daniel James and you're listening to seven AM. The

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<v Speaker 1>fighting may have temporarily eased in the Middle East, but

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<v Speaker 1>the fallout are still moving through the global economy. Shipping

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<v Speaker 1>through the Strait of Horror Moves remains disrupted, fuel markets

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<v Speaker 1>are unsettled, and Australia is exposed. Now. Anthony Alberizi is

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<v Speaker 1>in Singapore trying to secure a supply as the opposition

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<v Speaker 1>presses the government over how prepared the country it really is.

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<v Speaker 1>Today Energy and Climate Change Senior Fellow at the Gratton

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<v Speaker 1>Institute Tony Wood on the state of the Strait and

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<v Speaker 1>the ongoing risks for Australia and the politics taking shape

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<v Speaker 1>around another global shock. It's Saturday, April eleven.

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<v Speaker 2>Okay, Ellie, I have to pause because I'm just hearing

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<v Speaker 2>a may hear that the President has agreed to start

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<v Speaker 2>bombing for two weeks.

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<v Speaker 3>Control Room, do you have any more information.

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<v Speaker 1>Around the forumst so confirming the reopening of the critical

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<v Speaker 1>streets of four Moves during this season five period, Tony.

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<v Speaker 1>This ceasefire has raised hopes that the Strait of Homus

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<v Speaker 1>could reopen, but there are still reports that ships need

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<v Speaker 1>permission from Aram's navy to pass, and that shippings at

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<v Speaker 1>a knee stand still. So, firstly, is homus actually opening

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<v Speaker 1>in any sort of meaningful.

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<v Speaker 4>Sense half open, half close, like I think, it's obviously

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<v Speaker 4>just reflecting a lot of the tension that's still both

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<v Speaker 4>sides of the conflict negotiating their position. Chris Barron said

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<v Speaker 4>it accurately. It's not a bit too carried away that

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<v Speaker 4>it's all going to reopen, but it is heading in

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<v Speaker 4>a better direction.

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<v Speaker 1>Obviously.

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<v Speaker 2>We hope a cease fire takes hope and becomes the

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<v Speaker 2>permanent arrangement, obviously, and the sooner that happens, the better

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<v Speaker 2>it'll be for field prices around the world. If you're

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<v Speaker 2>asking me to say, with a great deal of certainty

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<v Speaker 2>to predict avens in the Middle East coming days, in

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<v Speaker 2>which I'm not going to do that because it's a

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<v Speaker 2>fast moving situation.

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<v Speaker 4>But boy, this could easily tip either way. I still

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<v Speaker 4>think about what's going on. So what that means is

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<v Speaker 4>that the things that the government's been doing almost have

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<v Speaker 4>to continue on the basis that nothing has changed.

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<v Speaker 1>Shit, if it's not really open, what would companies need

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<v Speaker 1>to see before traffic starts moving properly again?

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<v Speaker 4>I think there's two things. What is the actual shipping

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<v Speaker 4>If the strait is open and there's no other impediment,

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<v Speaker 4>then that was simply could start pretty quickly. When there's

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<v Speaker 4>a whole lot of ships basically sitting their way to go,

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<v Speaker 4>there's a debate going on about whether or not they

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<v Speaker 4>run like apparently as evidence, they've already tried to change

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<v Speaker 4>some sort of toying fee to use Australia. That would

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<v Speaker 4>be something everyone's going to react adversally toned any fuel

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<v Speaker 4>that's already on the way. This is an issue that

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<v Speaker 4>government had our government in Australia had already been concerned about.

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<v Speaker 4>But if people were buying fuel at one hundred and

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<v Speaker 4>ten hundred and twenty dollars a barrel, but with the

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<v Speaker 4>time the ship to Australia the price has dropped from

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<v Speaker 4>eighty dollars a barrel, you can see there's a bit

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<v Speaker 4>of a commercial exposure there and the government had looked

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<v Speaker 4>to even underwrite that risk. And then the other one

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<v Speaker 4>of their courses, has there been any significant physical damage

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<v Speaker 4>to the resources, to the facilities in the Persian Gulf,

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<v Speaker 4>because there certainly has been to the L and G

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<v Speaker 4>reduction from the gas field in their Katari field, and

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<v Speaker 4>so that's a big problem because that's going to take

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<v Speaker 4>people have said more than three to five years to

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<v Speaker 4>get some of the effects. Now it's not the whole thing,

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<v Speaker 4>but that would be a problem. So it's a been

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<v Speaker 4>out of clear whether they our physical strange on that.

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<v Speaker 4>And then you've got the fact that it takes a

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<v Speaker 4>long time to fill up a global supply chain, so

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<v Speaker 4>it's not going to have it over night. But you know,

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<v Speaker 4>the prices react very quickly, and we've seen that already,

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<v Speaker 4>up and down, up and down, and I think we'd

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<v Speaker 4>see some improvement in price pretty quickly if it became

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<v Speaker 4>clear that the stroke was going to effectively stay open.

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<v Speaker 1>Just to give us a sense of how important Australia

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<v Speaker 1>is tony. When it is open, what does it mean

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<v Speaker 1>in market terms? And when it does properly reopen sometime

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<v Speaker 1>in the hopefully not too distant future, when will we

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<v Speaker 1>start to see sort of any real impact here in

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<v Speaker 1>Australia in terms of our fuel security.

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<v Speaker 4>Well a couple of week. Firstly, about twenty percent of

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<v Speaker 4>the Wills oil crude or comes through the straight now

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<v Speaker 4>only a modest proportion that is Iranian oil Iran, together

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<v Speaker 4>with Saudi Arabia and Venezuela have the big resources globally

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<v Speaker 4>of oil. Most of what Iran has exported has been

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<v Speaker 4>able to China in recent times. But what has been

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<v Speaker 4>prevented by the australiaanmus problem isn't Iranian oil. It's oil

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<v Speaker 4>coming from Kuwait, Saudi and those sort of places. And

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<v Speaker 4>just the oil, by the way, it's also things like fertilizer.

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<v Speaker 4>So that's been the big problem. Now if that opens up,

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<v Speaker 4>then you would start to see that flowing. Now, what

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<v Speaker 4>Australia has been doing, we've depended upon companies like Singapore

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<v Speaker 4>and Malaysia to a smaller extern Japan for our finished

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<v Speaker 4>products and also for our crude or that goes through

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<v Speaker 4>our two refineries. We already diversified that a fair bit

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<v Speaker 4>over the last twenty years as we shut down our refineries. Obviously,

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<v Speaker 4>this is giving us a reason to even think about

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<v Speaker 4>for more so and maybe the relationships with some of

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<v Speaker 4>those countries can we see as strong long term energy partners,

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<v Speaker 4>will mean we'll get more from them. But also recognize

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<v Speaker 4>that companies like Singapore and Malaysia themselves they depended upon

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<v Speaker 4>getting the crude which they refine in products from places

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<v Speaker 4>like the Middle East, and so I think this complex

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<v Speaker 4>global supply chain of liquid fuel products is going to

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<v Speaker 4>change a lot, and what people we depend upon of

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<v Speaker 4>those we don't depend upon, is going to change a lot.

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<v Speaker 4>And at the same time, we are and will be

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<v Speaker 4>and should be looking forward to. Okay, now what do

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<v Speaker 4>we have to think of? You thinking about almost at

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<v Speaker 4>the same time to ensure that we don't become complacent

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<v Speaker 4>if things return to something like normal.

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<v Speaker 3>Our Prime Minister has to fly halfway around the world

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<v Speaker 3>to beg for liquid fuels, which is what he's had

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<v Speaker 3>to do in this last minute flight to Singapore today.

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<v Speaker 3>We should instead have been drilling for the last few decades.

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<v Speaker 3>We probably would have found a new source of liquid

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<v Speaker 3>fuels to replace the bats straight just a generation of

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<v Speaker 3>is all.

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<v Speaker 1>Of this tony? As the opposition is suggesting a case

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<v Speaker 1>for more domestic refining, bigger reserves, and different trading partnerships.

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<v Speaker 1>Were all three, but.

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<v Speaker 4>Going through the trading partnerships makes a lot of sense.

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<v Speaker 4>I think the idea that we're going to rapidly find

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<v Speaker 4>more oil and build more refineries is far more challenging.

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<v Speaker 4>Its the history that's a very big ask and would

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<v Speaker 4>acquire huge amounts of government effort because we already know

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<v Speaker 4>the reason we don't have refineries because they are un economic.

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<v Speaker 4>So building new refineries for a market it's relatively small,

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<v Speaker 4>like Australia with physically spread around a very large country

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<v Speaker 4>with a small population is a really big hard thing

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<v Speaker 4>to do. There's been some suggestions recently that there's a

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<v Speaker 4>potential new oil and gas resource in Queensland. Premier has

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<v Speaker 4>been talking it up. I think it's very very early

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<v Speaker 4>days just where that's real or not and is it

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<v Speaker 4>a the size that would justify the enthusiasm that we're seeing. So,

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<v Speaker 4>you know, it seems to me that looking for a

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<v Speaker 4>more oil be our process in ourselves is going to

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<v Speaker 4>be a really long term hard challenge. There are better

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<v Speaker 4>things we could be doing. One of them forces to

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<v Speaker 4>really continue to push our acceleration of electric vehicles to risks.

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<v Speaker 4>What is because it reduces our dependence upon the sort

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<v Speaker 4>of problems we've been talking about. And secondly, it also

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<v Speaker 4>is consistent with producing our impact on climate change, and

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<v Speaker 4>it means that we can do both. That would seem

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<v Speaker 4>to be a double benefit for going down that route.

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<v Speaker 4>At the same time, probably looking to increase the level

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<v Speaker 4>of stories we have on shore. And also probably this

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<v Speaker 4>is a little bit less clear what the government's be

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<v Speaker 4>talking about to produce biodiesel rather than fossil diesel.

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<v Speaker 1>Coming up, What Albinize's flash trip to Singapore help Australia's

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<v Speaker 1>fuel problems.

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<v Speaker 5>This is a relationship of trust and of mutual interests

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<v Speaker 5>as well. We know that it is in both of

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<v Speaker 5>our country's interests to engage with each other to make

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<v Speaker 5>sure that we are both reliable suppliers and our word

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<v Speaker 5>means something.

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<v Speaker 1>Tony Anthony Abenezi has flowing to Singapore to meet with

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<v Speaker 1>his counterpart Prome Minister Lawrence Wong. You've touched upon it,

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<v Speaker 1>but why is Singapore so important to Australia's fuel needs?

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<v Speaker 4>Well, we get three finished products we're important we use.

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<v Speaker 4>One is petrol, one is diesel. What is aviation field?

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<v Speaker 4>Now you know people who have been carrying up that

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<v Speaker 4>bowsers know that there's a couple of variations on that,

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<v Speaker 4>but fundamental that's what we're talking about now. We buy

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<v Speaker 4>about half of our petrol or Singapore big refineeries they've

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<v Speaker 4>got there very important for us. The other side of

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<v Speaker 4>why Singapore is interesting is because Australia in this part

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<v Speaker 4>of the world is a globally important supplier of LERG

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<v Speaker 4>and now even more so with what's happened to the Kata,

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<v Speaker 4>And so Singapore has some very important challenges because they

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<v Speaker 4>produce most of it ninety percent of electricity from gas,

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<v Speaker 4>so they need us if we need them. You can

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<v Speaker 4>see the opportunity for reciprocal roadment. Now, Governments do not

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<v Speaker 4>do commercial deals. Governments do not threaten each other with

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<v Speaker 4>unless you do this, I'm going to do that. What

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<v Speaker 4>they do is so let's work together and see if

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<v Speaker 4>we can find some solutions here. They're going to be

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<v Speaker 4>better for both of us, clearly in both countries have

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<v Speaker 4>got a very strong common interest and that's what I

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<v Speaker 4>think Prime Minister of Australia is trying to shore up

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<v Speaker 4>with the Prime Minister of Singapore, for example, not doing

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<v Speaker 4>commercial deals, but making it very clear that the government

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<v Speaker 4>is not going to intervene in ways to adversity affect

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<v Speaker 4>Singapore and looking for assurances the Singapore government won't do

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<v Speaker 4>the same thing. Remembering that Singapore produces more fuel than

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<v Speaker 4>they need. How they allocate that will be important for us.

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<v Speaker 1>So in purely political terms, what can Alberdas realistically achieved

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<v Speaker 1>during his visit Tony.

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<v Speaker 4>I think the highest priority would be too thing. Firstly,

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<v Speaker 4>we know s reciprocally what we're planning to do if

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<v Speaker 4>things don't improve, And what I mean by that is

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<v Speaker 4>that Singapore will not if they do decide they've got

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<v Speaker 4>some real problems meeting all their customers requirements for the

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<v Speaker 4>products they produce, that we won't be adversey affected by that.

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<v Speaker 4>I mean there's no guarantees here, But equally, will they

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<v Speaker 4>be looking for the same thing. We won't do anything

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<v Speaker 4>on the L and G side that would affect them.

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<v Speaker 4>Now that's the political decision. At the same time, obviously

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<v Speaker 4>there will be a lot of interest in the way

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<v Speaker 4>that will work out commercially long the term. What I

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<v Speaker 4>think this does is absolutely supports a better long term

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<v Speaker 4>relationship with Singapore, because if we are going to be

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<v Speaker 4>dependent upon imported fuels for some time yet, and I

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<v Speaker 4>think it's quite likely, then deepening those relationships with countries

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<v Speaker 4>like Singapore and Malaysia and so forth makes a lot

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<v Speaker 4>of sense. And secondly, as we think about building our

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<v Speaker 4>own onshore storage, that will also be important so I

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<v Speaker 4>think there's two levels of arrangements that the Prime Minister's

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<v Speaker 4>visit could bring to a future.

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<v Speaker 1>Beyond the Singapore trip. The government has announced a series

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<v Speaker 1>of measures underwriting extra shipments, cutting exercise further with states,

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<v Speaker 1>releasing twenty percent of the minimum stockholding obligation, changing fuel

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<v Speaker 1>standards and backing some the refineries that we do have.

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<v Speaker 1>So how would you rate the government's response to this

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<v Speaker 1>so far?

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<v Speaker 4>Look, I only the government in terms of responding to

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<v Speaker 4>is they leaded to situation has been developing where we

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<v Speaker 4>refer it has been pretty good. Actually, they were trying

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<v Speaker 4>to run a fine line between being too optimistic and

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<v Speaker 4>two prisonistic. And so you know this idea that as

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<v Speaker 4>soon as the government says Doug, panic, what does everybody

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<v Speaker 4>do panic? Of course that's what happens, right, So the

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<v Speaker 4>government was trying to assure people that and so far

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<v Speaker 4>it's been true. Overall Australia has not run out of fuel.

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<v Speaker 4>What we have that is putting more for it. And secondly,

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<v Speaker 4>because of our large country, we're on the end of

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<v Speaker 4>the many of our many people in regional Australia are

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<v Speaker 4>in the longer supply chains. When you start to see

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<v Speaker 4>panic buying in those supply chains, then quickly you can

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<v Speaker 4>get local problems. So I think broadly speaking, what my

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<v Speaker 4>governments does been appropriate. But I think most Australians will say, Okay,

0:12:19.320 --> 0:12:22.320
<v Speaker 4>we understand this wasn't caused by Australia. We're comfortable what

0:12:22.360 --> 0:12:24.400
<v Speaker 4>my government's doing. We all know we're going to if

0:12:24.400 --> 0:12:26.560
<v Speaker 4>it gets worse, we're going to have to do our part.

0:12:26.920 --> 0:12:27.680
<v Speaker 4>Let's get on with that.

0:12:28.440 --> 0:12:30.640
<v Speaker 1>A question you may or may not be able to answer, Tony,

0:12:30.679 --> 0:12:32.840
<v Speaker 1>but it's something that's I've always sort of fascinated me

0:12:32.920 --> 0:12:36.040
<v Speaker 1>since this thing broke out, is that during normal times,

0:12:36.080 --> 0:12:37.920
<v Speaker 1>do we have any sort of idea of how many

0:12:37.960 --> 0:12:41.320
<v Speaker 1>surveys would actually run out of petrol on a normal day.

0:12:42.679 --> 0:12:44.520
<v Speaker 1>You'd like to big zero, wouldn't it look?

0:12:44.559 --> 0:12:46.400
<v Speaker 4>I think it does happen from time to time. And

0:12:46.600 --> 0:12:49.200
<v Speaker 4>I've driven up the stud Highway from Adelaide to dar

0:12:49.280 --> 0:12:52.359
<v Speaker 4>on a couple of times, and it's not that unusual

0:12:52.840 --> 0:12:55.560
<v Speaker 4>to to come to one that is out of one

0:12:55.600 --> 0:12:57.880
<v Speaker 4>particular feel like diesel or petrol or something like that,

0:12:57.960 --> 0:13:01.520
<v Speaker 4>or a particular home lettered petrol or something. So it's

0:13:01.559 --> 0:13:06.160
<v Speaker 4>not off the planet at all. But I can recall

0:13:06.240 --> 0:13:08.440
<v Speaker 4>when we did have more refiners in this country, it

0:13:08.480 --> 0:13:10.439
<v Speaker 4>seemed to me that we had had more disruptions to

0:13:10.440 --> 0:13:15.679
<v Speaker 4>supply because those in those days a very strong unionized workforce,

0:13:15.960 --> 0:13:18.959
<v Speaker 4>and we have industrial disputation more than we have physical disputation,

0:13:19.080 --> 0:13:21.439
<v Speaker 4>and so, you know, I think this is actually overall,

0:13:21.920 --> 0:13:23.840
<v Speaker 4>our fuel supply has been pretty good, but I think

0:13:23.840 --> 0:13:26.760
<v Speaker 4>it's important that we'd be thinking about what level of

0:13:26.760 --> 0:13:29.600
<v Speaker 4>insurance do we want to have against this thing happening

0:13:29.600 --> 0:13:33.240
<v Speaker 4>in the future. And we've had pretty small spot relatively

0:13:34.080 --> 0:13:36.000
<v Speaker 4>small stocks of fuel. I'm sure we may have to

0:13:36.000 --> 0:13:38.640
<v Speaker 4>revisit that the need for that has changed a lot,

0:13:38.679 --> 0:13:41.200
<v Speaker 4>because we're still produce crudeal or we used to also

0:13:41.360 --> 0:13:44.320
<v Speaker 4>profine it ourselves. We didn't need to have the same

0:13:44.320 --> 0:13:46.760
<v Speaker 4>amount of onshore storage as we probably do today.

0:13:47.160 --> 0:13:51.200
<v Speaker 1>And finally, Tony, a very simple question, really, what's the

0:13:51.240 --> 0:13:54.040
<v Speaker 1>best case scenario here and what's the worst case scenario?

0:13:54.440 --> 0:13:57.400
<v Speaker 1>And how long can we be feeling the impacts of this.

0:13:59.360 --> 0:14:03.520
<v Speaker 4>I think the best case would be if both sides

0:14:03.520 --> 0:14:05.800
<v Speaker 4>don't remember there are three sides to this bloody thing.

0:14:05.800 --> 0:14:09.840
<v Speaker 4>With Israel, I think its own very particular view, not

0:14:09.880 --> 0:14:13.480
<v Speaker 4>necessarily on with the United states. They've got to find

0:14:13.480 --> 0:14:16.880
<v Speaker 4>a way to back out of this withdraw, break it

0:14:16.920 --> 0:14:21.000
<v Speaker 4>all down, get some serious negotiations going on. Very tricky,

0:14:21.440 --> 0:14:23.640
<v Speaker 4>very sensitive. It only requires someone to say the wrong

0:14:23.680 --> 0:14:25.840
<v Speaker 4>thing on the wrong media interview. It all goes to.

0:14:25.800 --> 0:14:28.160
<v Speaker 1>Hell, right, But be careful what you say, Taming bob On.

0:14:28.400 --> 0:14:30.720
<v Speaker 4>You've got it now. The worst case, obviously, is that

0:14:30.800 --> 0:14:34.480
<v Speaker 4>doesn't happen. The most dramatically wordate worst case would be

0:14:34.640 --> 0:14:37.960
<v Speaker 4>something like what Donald Trumkt was threatening actually happened. If

0:14:37.960 --> 0:14:41.000
<v Speaker 4>we did fundamentally wipe out the physical infrastructure in a

0:14:41.040 --> 0:14:43.960
<v Speaker 4>way that Trump was talking about, recovery would take a

0:14:44.000 --> 0:14:46.880
<v Speaker 4>lot longer. The consequence will be a lot worse. That

0:14:46.920 --> 0:14:49.360
<v Speaker 4>would be so bad that I don't think anyone a

0:14:49.360 --> 0:14:50.920
<v Speaker 4>lot will be done to avoid that happening.

0:14:52.760 --> 0:14:54.920
<v Speaker 1>Well, Tony, we thank you for your insights and we

0:14:54.960 --> 0:14:56.520
<v Speaker 1>thank you for your time. Thanks for joining us.

0:14:56.880 --> 0:14:57.120
<v Speaker 4>Thanks.

0:14:57.200 --> 0:15:13.320
<v Speaker 1>Jan seven Am is a daily show from Solstice Media.

0:15:13.600 --> 0:15:18.720
<v Speaker 1>It's made by Adigus Bastow, Ariel Richards, Chris Dgate, Crystal Keller,

0:15:19.160 --> 0:15:25.400
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0:15:25.440 --> 0:15:27.960
<v Speaker 1>theme music is by Ned Beckley and Josh Hogan of

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0:15:32.240 --> 0:15:33.840
<v Speaker 1>Please have yourself a great weekend