Fuel, Energy and Power Resources (Declaration of State of Emergency) Order 2026

6 May 2026

Hon Stephen Dawson (Leader of the House) (5:32 pm) : I move:

That the Fuel, Energy and Power Resources (Declaration of State of Emergency) Order 2026 made on 1 April 2026 and tabled in the Legislative Council on 14 April 2026 under the Fuel, Energy and Power Resources Act 1972 be and is hereby ratified.

Hon Dr Steve Thomas (5:32 pm) : Did you say to filibuster?

Hon Stephen Dawson : No; I have to talk, too.

Hon Dr Steve Thomas : Leader of the House, you get to respond at the end, don't you?

The President: Hon Dr Steve Thomas, you have the call so I insist you take it!

Hon Dr Steve Thomas : Thank you, President. I am fighting off the Leader of the House and his enthusiasm!

I indicate that, obviously, given the circumstances, the opposition will be supporting the motion before the house that this order be ratified. For those who do not think that there is some form of significant impact to the state of Western Australia, I suggest that they borrow a diesel ute and fill it up to see how much they have to pay. Is yours diesel, Hon Dan Caddy?

Hon Dan Caddy : Yes.

Hon Dr Steve Thomas : Excellent. Take out a second mortgage; it is an expensive process!

I will run through the process a little before I make some general comments about the fuel shock and its impact. I suspect members are aware that this is a relatively limited debate in that it is not open slather in all sorts of areas. We will effectively ratify an order, and that order is to determine whether a state of emergency exists as determined by the Governor. I will not spend a lot of time pontificating upon things that I think are solutions. I will have an opportunity to do that next week when we deal with an amendment bill; indeed, I will talk through some of those issues in more detail. But it is worthy to have some discussion around how we got to this particular position as a part of the ratification of the process.

The motion is part of the process that is covered under the Fuel, Energy and Powers Resource Act 1972 and a process within that is to work out whether an emergency exists in terms of energy and fuel and then there is a process moving forward. This particular part is covered under section 43(1) of the Fuel, Energy and Power Resources Act 1972, which states:

At any time, if the Governor is satisfied that by reason of embargoes by oil producing countries, disruption of shipping services, disruption of other transport whether outside or within the State, natural disasters, or other events, circumstances or causes affecting or likely to affect the provision, supply, or distribution of the resources of fuel, energy or power in or to the State, the community, or any substantial portion of the community, is or may be deprived of essential supplies or services or a shortage may result, the Governor may, by order in writing, declare that a state of emergency shall exist, either in the whole State, or in any part of the State …

I understand that the Governor did exactly that on 1 April this year. I am not sure whether April Fool's Day was at all pertinent to that. That set in play further sections of the act. Subsection (5) says that no more than 14 days from the making of the declaration of the state of emergency, Parliament must be called together because it has to be tabled within 14 days and it must be ratified within 30 days from the day in which the order was laid in the house. The tabling is covered under section 43(5), which was achieved with the order being set by the Governor on 1 April. On 14 April, just inside the 14-day period, Parliament met in an urgent sitting to have those things tabled. I note that the lower house, that place that shall not be named, debated the motion on the same day. The upper house, as usual, took its time to consider in great detail how we will progress forward. It took a far more sensible and educated approach to this order having not being rushed. Section 44 deals with the ratification. Ratification must take place within 30 days of the order being tabled. That happened on 14 April and we have yet to hit the 14th of next month. That is the process.

The emergency order itself is an interesting document. I have a copy of the order. It is tabled paper 1102 for those who are looking. I note that the preamble has two separate sections but bear in mind there are two paragraphs in the preamble and five clauses in the bill, all of which could comfortably fit on one page. We are not talking about a large bill with a great degree of information. Once again, because we are focused on the ratification of the order, that is the focus of the debate before the house. I do note, minister, that there are two paragraphs in the preamble. They both start with "The Governor is satisfied" and they both end with "the provision, supply or distribution of the resource of fuel in or to the State is being, or is likely to be, affected and the community or a substantial portion of the community is being or may be deprived of essential supplies or services or a shortage may result." As I understand it, this comes specifically from the wording in section 43 of the act. It is fairly word for word from that section, so I have no doubt that that is where it comes from. The minister can check that at some point, but I am pretty confident that it is just a cut and paste.

I am interested in why there are two parts to the order's preamble. The first one reads:

… by reason of armed conflict and other events and circumstances in Iran, the Persian Gulf and other places in and near the Middle East …

The second reads:

… by reason of disruption of shipping services in the Persian Gulf and other places in and near the Middle East …

I would have thought one is sufficient. I am not sure whether there is a high level of enthusiasm to increase the amount of information available, but having fairly comprehensively read over the Fuel, Energy and Power Resources Act 1972 a number of times, either one of those would probably do the job. There might be a reason they had to be written that particular way.

The rest of the order is pretty simple. There is the citation, terms used, which is just the name of the act, and then clause 3, which says:

State of emergency declared

A state of emergency is declared to exist in the whole State.

Section 4, "Administration of Act vested", states:

While this order is in force, the administration of the Act is vested in the Minister for Energy and Decarbonisation.

Section 5, "Duration of the order", states:

For the purposes of section 43(2) of the Act, this order continues in force for the period ending at the end of 30 September 2026.

Timing is also covered in the Fuel, Energy and Power Resources Act 1972. As I understand it, six months is a standard time. If the government seeks to extend this period, it effectively has to put another order and set of regulations in place to continue it. It is actually a fairly simple document. It says that the Governor has decided that the circumstances around fuel in this state have come to the point of a state of emergency. In the circumstances, I challenge anybody to disagree with that, but I will spend a little time talking through what it means and how it compares with previous events in Australia and previous fuel shocks.

There have been a number of fuel shocks over the last 50 years, and I guess the part that interests me the most is why this one is different, because I do not think this act has been used in any significant way since its inception in 1972. Prior to that, there was fuel rationing around the world wars, but I do not think we have seen a rationing process since this act was put in place in 1972. That is not to say there were not fuel crises in that particular period of time. The first recognised world oil crisis was in 1973–74, and there was a fair bit of ruction in the world economy about that. It was the Arab oil embargo; members of the Organization of the Petroleum Exporting Countries declared an embargo against any country supporting Israel in the Yom Kippur War. It resulted in a 400% increase in the price of oil, but, interestingly, as far as I can tell, flows of oil were not impacted as much as the price. It is an interesting thing that we can see as we go through some of the next oil crises. The second oil crisis was in 1978–79, around the Iranian Revolution. It saw a doubling of prices. The Iran–Iraq War from 1980 to 1988 saw another shock. The first Persian Gulf War in 1990—we all remember that one—was through the invasion of Kuwait. There was a bit of a move in the 2007–08 global financial crisis.

Interestingly, in terms of major impacts on oil prices, 2014 to 2016 saw the only significant decline in oil prices. They were corrections back down, but it was a significant decline. It was when America decided to engage in the shale oil process in a massive way, and in doing so cheapened the price in the US. It might be noted that that was during the period of the first Trump presidency and it had an impact on world oil supplies. The US went from being a significant importer to a significant exporter of fuel, and it remains an exporter to this day. The rest of that debate is one for another piece of legislation. Then of course we had another decrease with COVID-19, as industry effectively went on hold. Since then, we have had the Russo–Ukrainian war, which has seen prices increase. But the most significant one for Australia in particular is the current one with the closing of the Strait of Hormuz, which has seen a number of significant price increases. Just for the interest of members, I am happy to table a document that contains those events and the oil price changes that occurred.

Leave granted.

(See paper 1143.)

Hon Dr Steve Thomas : That document will just give members an indication of how often we have been down this path. What is different this time? We are now seeing the act being used and orders and regulations in place. The regulations fall out of the declaration of the state of emergency. I probably should have done this earlier, but just in case members have not noticed, the set of regulations were tabled at the same time. They are tabled paper 1102, Fuel, Energy and Power Resources (State of Emergency) Regulations 2026. They have been tabled and are obviously in force unless disallowed. It is the power that gives the minister the imprimatur to make an order requiring information to be provided. Interestingly, today we are debating the declaration of the state of emergency. When the state of emergency went through, it allowed a couple of different things to happen. In particular, it allowed the regulations to be tabled at the same time. The regulations were drawn up and they give the minister the power to require information in the first instance. Should this circumstance get worse, we can expect to see further action and a shift to level 3 or level 4 emergency status. I suspect significantly enhanced regulations will be tabled at some point down the track.

At this point, I do not think we have seen the worst outcome of the conflict in the Middle East or the full impact of the blockage of the Strait of Hormuz, and it is now critical. The solution to this issue in the short term to medium term—by that I suggest probably the next 20 years or so—is to have the Strait of Hormuz reopen. No other significant alternative is on the table right now. The process we have in place and the logistics chain that currently exists is here because it is the most efficient and effective compared with all the other processes. It is a bit like Winston Churchill saying, "You know, democracy is a terrible way to run a country. It's just better than all the other ways." This is a bit the same. It is not necessarily the best way to manage fuel, but at this point it is better than all the other ways. It is the most cost effective way. However, as we have seen, we are all vulnerable to disruption. The whole world is vulnerable to disruption; it is just that we are particularly vulnerable given our closeness to the Middle East and our reliance on the supply chain that goes from the Middle East to refineries in Southeast Asia. It is then imported as refined product in Australia. That makes us vulnerable compared with the Americas, for example, which have separate resources, separate refining capacity et cetera. We are absolutely vulnerable in that process to disruption of supply.

I note that today there was an announcement of additional storage. I have not seen the full announcement yet, but I understand that National Cabinet in some way, shape or form met today to talk about adding additional storage as a part of the process. It is worth considering whether those things will actually prevent another state of emergency existing under similar circumstances. I understand the announcement today, in the briefest of terms, is a $10 billion plan, including $3.2 billion for a billion litres worth of additional storage and then $7.5 billion for loans, grants, investment and price support or equity for the private sector to do exactly that. The tricky part, of course, is that $3.2 billion buys a billion litres of storage, and the other $7.5 billion is nearly twice that. In total, we will get about 3.5 billion litres of storage for that. Whilst that is helpful and useful, and I am sure it makes people feel more comfortable, I want to throw a couple of key numbers into that process. Australian diesel consumption is somewhere around 90 million litres a day. Every 11 days or so, it is up to a billion litres. We use three to four billion litres in 44 to 50 days, which is more than we currently have in reserve. We have had 28, 29 and 30 days' worth of reserve. This is adding, let us say, half as much again. It is not enough to provide fuel security for Western Australia, let alone Australia. At that level, it will extend it slightly. That is just diesel. Western Australia consumes somewhere between six and eight billion litres of diesel fuel every year. That is just in Western Australia. An additional three to four billion litres in reserve is a small amount. That is not to say that it is a bad thing. I welcome that. Any additional storage is a good thing, as it takes additional pressure and concerns off industry, in particular, and also just people who drive. Diesel is obviously the most problematic component of this.

I think it is interesting that we have got to the point that the reserves in Australia are higher now than they were before the crisis hit in many cases. Obviously, governments have worked pretty hard to get reserves in place in a very difficult set of circumstances. Even though the price has skyrocketed, for the most part fuel has got through, which is a credit to the government. I accept that. My understanding from a couple of weeks ago is that, for the most part, the farming community has received 80-plus% of the fuel that it wanted in order to put crops in. In fact, I would say that a far bigger issue than diesel fuel right now is fertiliser. That is another logistics issue that has to be dealt with. In the same way that 20% of fuel goes down through the Strait of Hormuz, at least the same amount of fertiliser goes through in the same direction. That is going to be the big question mark going forward—I fully understand that. Obviously, we are not addressing fertiliser at this point—that will be part of another debate at some time.

Those are some basic numbers. The sheer size of the problem beggars belief. The federal energy minister said last month that Australia had a month of petrol in supply, at 1.7 billion litres; 29 days of diesel, at 2.6 billion litres; and 30 days of jet fuel, at 847 million litres, or 0.847 billion litres. We can see that a month's reserve was 1.7 billion litres of petrol and 2.6 billion litres of diesel. That is absolutely the case.

Transport costs are massive. I make this point. We have regular discussions about energy and alternative energy supplies. I am a believer in renewable energy as much as the next person, although that depends on which direction I look! Here is an interesting number. Clean energy has probably grown from 6% to 9% of the energy consumption of Australia over the last 10 to 15 years. We concentrate very much on electricity production, and for electricity production it is much higher, but our biggest energy consumption is around fuel and transport, and it is absolutely massive. That is why there is a crisis before the state today and that is why we are supporting the declaration of that crisis in the order made by the Governor and tabled in this Parliament last month—it is because of the sheer size of the issue. If 2.7 billion litres is a month's supply, even if we can get to four billion litres of national reserve, that will only be a month and a half. That is the size of the crisis that we face.

I would love to say that there are simple, easy ways to fix this problem. There are alternatives that we could ultimately put in place. Biofuels could probably make only a small contribution because feedstock would become an issue and there is competition in other markets. We need to look at all the alternatives. Coal to liquid technology is difficult in Western Australia given our coal reserves. Gas to liquid technology is probably more optimistic, and I think we need to look more seriously at that. Also, if we are going to become more resilient so that we do not need these orders going forward, we have to look at the reserves of oil that we have and whether we need to engage in a bigger oil industry. As I said a couple of months ago, the problem is that the reserves of conventional oil in Australia represent about three and a half years of supply. Even if we were providing only a quarter of the domestic supply, we would only have a 12-year industry, and that is not enough for a return on an investment because these things are multibillion-dollar exercises. If we went into unconventional shale oil reserves and fracking as America did, we would have 36 years, but we would have to be able to take the extra steps in relation to how the oil reserves are managed. That would also become absolutely critical. Decisions will have to be made going forward.

Interestingly, Western Australia is not the biggest player at this point. The most prospective fields in Australia are over east. The Taroom basin in Queensland and the Beetaloo basin in the Northern Territory are probably the two that are talked about the most. The Beetaloo basin is quite isolated, while the Taroom basin is in a fairly populated area, so there are obviously different problems. Nobody lives in Beetaloo in the Northern Territory, so it would probably be easy to do.

Hon Sophie McNeill : There are a lot of First Nations people who feel a lot of ownership of Beetaloo.

Hon Dr Steve Thomas : Well, there is not a huge population.

The President: Order! Member, I just remind you of your own words and encourage you to bring your contribution back to the terms of the debate.

Hon Dr Steve Thomas : Thank you, President; I will do that. Beetaloo could need tens of billions of dollars of investment because it is isolated. The Taroom basin is much less isolated but there would be more local objections. All those things mean that the industry here has a difficult path forward, which means that I think we will continue to see these shocks.

The truly interesting thing with this stated declaration is that it is the first time in my memory, and I am older than most people in the room, that the flow of oil has become a much bigger issue than the price of oil. That is the crisis that we face going forward. The flow of oil still has not started back in the Strait of Hormuz. As weeks go by, the depletion of the reserves in the Asian refining countries of South Korea, China, Singapore and Malaysia will see them start to look after their own communities, so this may well get worse. If we do not get oil flowing in the Strait of Hormuz, this may well get worse. The only solution is an end to the war and oil flowing; everything else is a piecemeal, stop-gap measure. I appreciate all the effort the government has gone to in relation to those things. We now apparently have 20 million litres of diesel in reserve. All those things are good and positive, and we welcome all those things, but they do not save us from the next steps of the disaster. If the Strait of Hormuz does not open, at some point we will face level 3 and 4 restrictions, and that will be another debate before the house.

This is an incredibly important process. The main thing it did, under stage 2, was to allow the minister to seek the information that I think the government should have had to be able to make decisions around fuel management. I think the government needed that information; I do not think there is any doubt that that is the case, because obviously the government would be blamed if it did not work, so it needed that information. There was some resistance amongst fuel distributors, based on the legal precedent that it might set. This legislation effectively takes that legal precedent out of the debate.

The minister might make comment, when he responds, on the interactions with the distributors themselves and how that has been going. I understand that the government meets regularly with the entire group of distributors. A report on that would be actually quite useful. I am still seeking briefings on more of the detail of that; I understand that most of it cannot be made public. In the end, this process is important and needs to be supported. I think the Legislative Council will take a sensible and—I was going say statesmanlike, but should we say "statespersonlike"? That is very hard to say!—"statespersonlike" approach to this. It is very difficult to argue that this declaration of emergency and the regulations and actions that stem from it are not in the best interests of the state.

I therefore support this order and the opposition supports this order.