Michael McLaren:
Thanks. Maybe baby steps. Daniel Wild is the deputy executive director at the Institute of Public Affairs. I always enjoy speaking with Daniel. He’s with me on the line. He’s looked into it. Good day, Daniel.
Daniel Wild:
Good Day, Michael. How are you?
Michael McLaren:
I’m all right. A lot of media yesterday. People are getting the impression that we had this thing sign, sealed and on the way to being delivered. It’s typical government. We’re going to have a feasibility study and there’s probably then going to be an environmental study. I mean, you and I might be dead before-
Daniel Wild:
Yeah.
Michael McLaren:
… a decision’s made. I don’t know. I think we both agree a third oil refinery would be a very good idea, but we’re nowhere near there yet, are we?
Daniel Wild:
It’s never going to happen. It’s a sick joke. It’s a pre… What do they call it? A pre-feasibility study. Albanese’s going out there saying it’s going to create all these jobs. Well, yeah, if you build the thing. Last time I checked, Michael, a feasibility study does create jobs, it creates jobs for bureaucrats and politicians and advisors, but it doesn’t create jobs for normal Australians.
At the end of the day, we’re not going to be building any more refineries or any other high value industry while we have the policy of net zero. So, if the government wants to get faired income with Australians and say that we’re going to build this thing, then that’s great. We’re all behind it, but let’s get rid of net zero and all of the other impediments, the red tape, the regulation, and everything else before we can get on with it.
Michael McLaren:
I was going to ask you about that net zero thing because everyone’s… Well, not everyone. A lot of people assume it only applies to the electricity grid, but it really will be an economy-wide situation. I’d imagine Chris Bowen isn’t that keen in his own portfolio and now as the president of the global climate religion. I don’t think he’d be that keen to be having a third refinery built in Australia processing oil, would he?
Daniel Wild:
No. Well, that’s his net zero gone, isn’t it? I mean, I imagine he’s apocalyptic about this. Has he talked to Anthony Albanese? Have they talked to each other? I can’t imagine Chris Bowen likes this at all. I haven’t heard him say anything positive about it. And what we know is one of the key policies under net zero is something that we call the safeguard mechanism. Now that sounds like a great thing until you learn that it’s basically a carbon tax. What it does is it says that large projects that include refineries, by the way, have to reduce their emissions or purchase carbon credits in order to keep operating.
This is a massive cost. We crunched the numbers on this, and you mentioned there’s two refineries we have left, one in Brisbane, one in Geelong. The total annual cost is $165.5 million to these two refineries because of the net zero policy or just that one.
Michael McLaren:
They’re paying that at the moment or are they still exempt or-
Daniel Wild:
No, they pay it. This is the cost to those two refineries. How can you have a policy that is imposing $165.5 million cost on the two remaining refineries and then you tell us you’re going to build another one? Why don’t you just get rid of the cost to start with? I mean, there’s a reason why we’re not getting private investment because of the massive costs that are there, so get rid of the damage first.
Michael McLaren:
Well, I agree with that. Let’s assume. We’ve got to be a bit positive. It’s late on a Wednesday afternoon, c’mon Dan. We build this thing in 2030-something, and we then say, all right, well, it’s open for business. Let’s start refining. Oh, hang on. It’s a bit like the hospital. We don’t have the patient yet. So, we’ve got to bring in the crude or we’ve got to bring in the product to refine.
Once upon a time, Australia was pumping out of the Bass Strait and whatever. These days we import 90-something… I think 90% of our petroleum is imported refined product, so we’d be importing the base product from somewhere else. Okay, so yeah, good, we’ve increased our refining capacity, but if we can’t get access to the product it refines because the Strait of Hormuz is blocked or China’s blocked, the South China Sea or whatever it is, what’s it going to be doing with itself?
Daniel Wild:
Well, you make a very important point, and this is what happens when you have government by press release is they’re just trying to manage one day at a time. They’ve been caught out with the Iran war, and fair enough, external events happen, no one’s blaming the government for what’s happening overseas. But it has to be said, it’s not just the Labour government, but the previous Coalition government federally also oversaw the decline of our capacity to actually get the oil out of the ground and to refine it here in Australia. So, this has been going on now for many, many years.
So, you’re spot on. You need two things. You need the oil itself, because here we’re talking about sovereign capabilities. What does that mean? It means we have the ability to do everything end-to-end so we’re not dependent upon anyone else. There’s nothing wrong with importing things, that’s great. But when things stop working internationally, when there is a war, when there is a supply chain disruption, we want to know that we have the fundamentals that we need in this country so that we have oil and other liquid fuels available for our youth. But you’re quite right, if we don’t have the oil out of the ground, then you’re not fixing the sovereign component of the problem.
Michael McLaren:
You’ve made a move toward it, but there’s still a long way to go. Mind you, with that said, and look, I’m no geologist, I know people that say there’s oil out there, there’s others that say it’s just too prohibitively expensive and difficult to get what oil there might be from the Australian economic zone. Have you got any sense of how much oil might be out there, how easy it would be to drill? And indeed, is it near Western Australia if this is where the refinery’s going to be?
Daniel Wild:
These are all good questions. And no, I don’t know the details of the practicalities of getting the oil out of the ground. What I do know is that for a number of years, we’ve had a very hostile policy environment to doing any of these activities. To begin with, you need to have the exploration. There needs to be an incentive for investors and the private sector to actually go out there and explore the possibility of where this oil might be to see whether it’s economically feasible to get it out of the ground.
I think if you can’t get past stage one, which is, well, no matter what we do, it’s going to be too costly, which is often the case in this country at the moment, sadly, then we’re never going to have an idea of this. I just think we’ve got to get on with it, get rid of the barriers, let’s see what oil is out there, and then make a decision.
Michael McLaren:
Just finally then, the talk about a third refinery, Labour state government in Western Australia, a Labour federal government. As you said, we’ve got all the net zero stuff and the electrification of the fleet and all of these things going on from a policy point of view at the moment, but what is all of this actually saying about the likelihood of Australia becoming a fully electric fleet? I’m thinking particularly trucking here and given our geography and the like.
If indeed we were well on the way to electrifying everything, I mean, you wouldn’t be bothered with a third refinery, you’d probably be shutting one of the two down. What is this actually saying about the economy?
Daniel Wild:
Well, I think what it’s saying is it’s getting mugged by reality, as they say, isn’t it? I mean, it’s okay to have these ideas of electrification. I think there’s many problems with it no matter what side you’re on. The reality is that you need to have liquid fuels to power an economy from many different vantage points. And our economy and most other developed economies rely upon that. I think even this government now is saying, hang on a minute, we’ve had this big shock. It’s showcased how important it is to have the traditional sources of power in this country.
And also, the other point I make is I haven’t actually heard Anthony Albanese say the words net zero for a while. He certainly hasn’t defended the policy for a while, so maybe they are coming to their senses.
Michael McLaren:
Well, polling might be suggesting that he shouldn’t do it. Good to speak, Daniel. Thank you for your insight as always.
Daniel Wild:
My pleasure. Thank you.
Michael McLaren:
All the best, Daniel Wild there from the IPA.
This transcript of Daniel Wild speaking on Afternoons with Michael McLaren 2GB from 29 July 2026 has been edited for clarity.
