The government's proposal for a new oil refinery raises serious questions. Building a refinery is extremely capital-intensive, with costs running into billions of dollars. Australia has not built one in decades because it was uneconomical. International competition from large, efficient refineries in Asia makes domestic production likely more expensive. The cost would ultimately fall on taxpayers or consumers.
Additionally, a new refinery would be a long-term commitment to fossil fuels at a time when the world is moving toward electric vehicles and renewable energy. Investing heavily in oil infrastructure risks creating stranded assets and missing the net-zero target. The government should instead focus on accelerating the transition to clean transport and energy storage.
There are also environmental concerns. Even with modern technology, refineries produce significant emissions and local pollution. The plan could face strong community opposition. Instead of doubling down on oil, Australia could use its resources to become a leader in green hydrogen or battery manufacturing. The debate should be about future-proofing the economy, not doubling down on the past.