Don’t bail out Viva Energy

November 25, 2020
Viva Energy refinery in Geelong.

As environmentalists prepare for a national day of action against the federal government’s gas-led recovery plans, oil refinery Viva Energy, has asked the state Labor government to bail it out while it plans to set up a shipping terminal to import gas.

Viva Energy was formerly the Shell Refinery for almost of its 65 years and employs about 700 workers. During the COVID-19 pandemic it lost $80 million as the shut-downs wiped out demand for petrol and jet fuel.

According to the November 4 Sydney Morning Herald, the Victorian Labor government may be considering whether to enter a co-investment deal to “transform the oil refinery's site into an ‘energy hub’, which would include the development of a shipping terminal to import liquefied natural gas (LNG) and a solar farm alongside the refinery”.

The proposal raises a number of questions for the Geelong community, who have not been consulted about the proposal and know little about it.

These include what corporations receiving public subsidies must commit to, whether it would be better that they be nationalised and Viva’s stated expansion into gas.

In recent years, multinational companies have taken significant government handouts and then shut up shop, putting thousands of Geelong workers out of work.

The Alcoa smelter closed its Point Henry operations in 2014 despite being subsidised by the Victorian government since 1962. Even the business-oriented Financial Review claimed that the figure for the Victorian government’s power subsidy to Alcoa in Portland and Geelong was somewhere around $100 million a year.

Yet, when Alcoa could no longer make its Geelong operation even more profitable without a huge overhaul of the aging plant, it sacked 1000 workers and closed the smelter.

Similar concerns were raised when car maker Ford shut up shop in 2016, putting 600 workers out of work across its two factories in Broadmeadows and Geelong.

Three years earlier it announced that it was seeking greener pastures in Asia, even though it had received $1 billion in taxpayer assistance over the previous 10 years alone.

The Maritime Union of Australia said on September 8 that the oil refinery should be “nationalised rather than subsidised”, and called on the federal government to explore a public takeover.

MUA Victorian Branch Secretary Shane Stevens said: “The corporate sector is only interested in profits … which is why taking this essential facility into public hands is a far better outcome than simply pouring taxpayer dollars into the pockets of Viva’s shareholders.”

The loss of more jobs is bad enough, but the buy-in to gas is alarming environmental activists.

“Gas is not going to transition Geelong, or Australia, out of the fossil fuels market and help address the catastrophic impacts of climate change”, environment activist Sarah Hathway said. Hathway is helping organise the Geelong action on November 28.

There would be better outcomes for workers if the state government was prepared to run the new energy hub itself, after consulting workers and the community through their unions and Geelong Trades Hall to formulate a serious, job-rich transition plan away from fossil fuels.

Gas is not a clean transition energy: it is a dangerous polluting fossil fuel, mostly made of methane, with a global warming potential 84–86 times more potent than carbon dioxide.

A transition plan with an energy hub that quickly phases out fossil fuels should be considered. Viva’s "energy hub", led by oil and gas with solar added as an afterthought, sounds more like a desperate grab for taxpayer money, not a transition plan for green jobs.

[The Green recovery not gas recovery rally on November 28 is at 1pm on the corner of Little Malop and Moorabool Streets in Geelong.]

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