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Australia and the US have signed a landmark deal, allowing Australia to lease space in the US Strategic Petroleum Reserve (SPR) to ensure access to emergency oil supplies in the event of a major global disruption.

The Australia-US Arrangement will make it easier for Australia to access locally-owned oil during a global emergency.

Energy and Emissions Reduction Minister, Angus Taylor, signed the new Arrangement with US Secretary of Energy, Dan Brouillette, during the Minister’s visit to the US in early March.

The Arrangement stems from discussions between Australian Prime Minister, Scott Morrison, and US President, Donald Trump, in Washington in August 2019.

“This landmark Australia-US Arrangement represents our joint commitment to maintaining fuel security and improving Australia’s resilience, as well as strengthening the close bonds between our two great nations,” Mr Taylor said.

“The Strategic Petroleum Reserve is the world’s biggest emergency stockpile of oil. The US is a trusted ally which has been essential for global oil security and we are glad to be building on our strong, long standing relationship, while ensuring Australia is best prepared to act during a global oil disruption.”

US Secretary of Energy, Dan Brouillette, said that the US Strategic Petroleum Reserve is a critical asset for energy and national security that America has had at its disposal for decades. 

“There is no more secure or resilient place to store emergency oil reserves than the SPR, and we are glad that Australia is choosing to entrust us with their reserves.

“This Arrangement with Australia will strengthen the energy reliability of one of our strongest allies, providing them options in case of an emergency, and bolstering their energy security.”

Under the Arrangement, Australian Government-owned stocks held in the Strategic Petroleum Reserve can be counted towards Australia’s compliance obligations with the International Energy Agency (IEA).

Under International Energy Agency obligations, Australia is required to hold 90 days of oil reserves and can hold these reserves offshore where a bilateral arrangement is in place.

A separate leasing agreement is currently being negotiated between Australia and the US. This would detail any future purchases Australia may make now the Arrangement is in place.  

Charlotte Pordage is Editor of Utility magazine, a position she has held since November 2018. She joined the team as an Associate Editor in October 2017, after sharpening her writing and editing skills across a range of print and digital publications. Charlotte graduated from Royal Holloway, University of London, in 2011 with joint honours in English and Latin. When she's not putting together Australia's only dedicated utility magazine, she can usually be found riding her horse or curled up with a good book.

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