The assessment of how well each meets the key criteria set for the emergency stockholding system is shown below. 1 Model 2 Model 3 Model 4 Compliance Meets the IEA obligation Uncertain – volume may not be available Good Good Good Time to secure first stock (tickets) Good: ~ 1 – 1.5 Good: ~ 1 – 1.5 Good: ~ 1 – 1.5 Poor:~ 4-5 Possible time to full compliance Average: 5-10 if possible at all Average: ~10+ years Average: ~10+ Poor 10-15 years Security Allows participation in collective international action (stock release) Good Good Good Good Improves domestic security Poor - Average Good Good Good Cost estimate 2016 assuming full compliance all models Estimated capital required (AUD millions) $0 $4,163 $4,148 $4,121 Estimated per cost including capital recovery (AUD millions) $264 $296-495 $305-496 $492-696 Per litre charge if on products (AU cpl) 0.5 0.6-1.0 0.6-1.0 1.0-1.4 Cost estimate 2022 assuming full compliance all models Estimated capital required (AUD millions) $0 $9,738 $9,722 $9,695 Estimated per cost including capital recovery (AUD millions) $573 $840-1,106 $649-1,107 $1,103-1,582 Per litre charge if on products (AU cpl) 1.1 1.2-2.2 1.3-2.2 2.2-3.1 Other items Flexible to meet changing target Good (but volume limited) Good Good Average
Key contractual requirements In line with the requirements for ticketing and/or physical stock Additional requirements for government including: Legislation for establishing obligation and rules around whether obligation can be traded or transferred Legislation for reporting, monitoring and compliance Possible need to have legislation allowing industry to set up a stock agency Industry would have to set up their own systems for contracting stock Funding Option of either general budget or levy on fuel use With obligation on market the cost would be passed through to consumers by industry. International and domestic security Provides international compliance – domestic security impact will depend on choice between physical stock and tickets. Government would control release. Likely to provide some improvement to domestic security as well as international compliance. Government would control release though control of the obligation level. Issues Do not gain any benefit from having a strong link between industry and government in provision of emergency stock. Complex implementation and much more resource intensive to operate – may be difficult to justify with the current commercial stocks reported as sufficient for supply security. Synthesis of options With two primary ways of holding stock and two key options for who takes responsibility, there would be four options for managing emergency stock. However with a combination of the type of stock and who has responsibility, there can be hybrid options, giving a total of nine options as shown in Table 9. Based on the preceding discussion the table indicates the trend or direction in cost, complexity and ability to manage different volumes against the options (with examples of the countries that use each system type). Table 9: Emergency stock options Ticket Stocks Tickets and physical stocks Physical Stocks
Table 22: Model comparison Model 1 Model 2 Model 3 Model 4 Responsibility Government Government Government and Industry Industry Stock type Tickets only Physical stock and tickets Physical stock and tickets Physical stock and tickets Funding General budget or levy Probably levy Budget or levy + industry pass through Industry pass through Compliance Meets the IEA obligation Uncertain – may not be volume available Good Good Good Time to secure first stock (tickets) Good: ~ 1 – 1.5 years Good: ~ 1 – 1.5 years Good: ~ 1 – 1.5 years Poor:~ 4-5 years Possible time to full compliance Average: 5-10 years if possible at all Average: ~10+ years Average: ~10+ years Poor 10-15 years Security Allows participation in collective international action (stock release) Good Good Good Good Improves domestic security Poor - Average Good Good Good Cost estimate 2016 assuming full compliance all models Estimated capital required (AUD millions) $0 $4,163 $4,148 $4,121 Estimated per annum cost including capital recovery (AUD millions) $264 $296-495 $305-496 $492-696 Per litre charge if on products (AU cpl) 0.5 0.6-1.0 0.6-1.0 1.0-1.4 Cost estimate 2022 assuming full compliance all models Estimated capital required (AUD millions) $0 $9,738 $9,722 $9,695 Estimated per annum cost including capital recovery (AUD millions) $573 $840-1,106 $649-1,107 $1,103-1,582 Per litre charge if on products (AU cpl) 1.1 1.2-2.2 1.3-2.2 2.2-3.1