Key facts
- Experts argue a proposed new oil refinery in Western Australia represents 'dinosaur technology'.
- The Australian government is funding a $4m feasibility study for the refinery.
- Experts believe the project would be uneconomic and require government subsidies.
- Australia's domestic crude oil production is projected to cease within seven years.
- A new refinery would likely rely on imported crude oil, not enhancing fuel security.
- Six of Australia's eight oil refineries have closed since 2003.
Leading climate policy experts have described a proposed new oil refinery in Western Australia as an investment in "dinosaur technology" that would not solve Australia's fuel security issues and would require public subsidies. The Australian government recently announced a $4 million early-stage feasibility study for the project in the Pilbara region.
Experts argue that the money would be better allocated to green technologies to reduce the nation's reliance on fossil fuels. Greg Bourne, a councillor at the Climate Council and former regional president of BP in Australia, stated that achieving a profitable return over the next 20 to 30 years would be difficult, given the projected decline in oil and gas demand. He suggested that by 2035, oil and gas would be less necessary.
Professor Frank Jotzo, director of the Centre for Climate and Energy Policy at Australian National University, criticized the refinery proposal at the Clean Energy Summit in Sydney, calling it a "big signal against the clean energy transition." He noted that Australia's domestic crude oil production is rapidly declining and is projected to cease within seven years without new discoveries. Jotzo believes that any new refinery would likely need government subsidies to compete with more efficient mega-refineries in Asia and that future liquid fuels should come from renewable electricity.
Baethan Mullen, chief executive of the Superpower Institute, pointed out that Australia currently relies on foreign imports for 95% of its fuel. He explained that a new refinery would likely process imported crude oil, offering little improvement to sovereign capability. Mullen also highlighted that condensate, a byproduct of gas extraction, is not typically used to produce diesel, a critical fuel for sectors like mining and agriculture in Western Australia. He concluded that rebuilding refining capacity in Australia is not a viable prospect, as evidenced by the closure of six of the country's eight oil refineries since 2003 due to economic unviability against Asian competitors.