MANDATORY PETROLEUM DATA REPORTING

REGIME

Public Discussion Paper

May 2013

Submissions Close: 5 July 2013

© Commonwealth of Australia 2013

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Table of Contents

Executive Summary...........................................................................................41. Introduction...............................................................................................5

1.1 The need for a mandatory petroleum data reporting regime.................51.2 Australia’s petroleum supply chain.........................................................61.3 The Australian Petroleum Statistics.........................................................91.4 Mandatory Reporting Regime - General Approach...............................11

2. Regime elements......................................................................................132.1 Data coverage........................................................................................132.2 Validation..............................................................................................162.3 Confidentiality.......................................................................................182.4 Timing....................................................................................................20

3. Australian petroleum data.......................................................................213.1 Existing data collection processes.........................................................223.2 Existing data use for the mandatory reporting regime..........................263.3 Related and future data needs..............................................................29

4. Stakeholder consultation and next steps..................................................294.1 Consultation process.............................................................................304.2 Guidance................................................................................................304.3 Next steps..............................................................................................31

References......................................................................................................32Appendix 1 – Data reporting and publication categories..................................33Appendix 2 – IEA stockholding obligation........................................................40

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EXECUTIVE SUMMARY

On 25 January 2013, the Australian Government announced its decision to pursue the development and implementation of a mandatory petroleum data reporting regime (Mandatory Reporting Regime) in consultation with relevant stakeholders.

This Discussion Paper begins the stakeholder consultation process on the design and im-plementation of the Mandatory Reporting Regime. The main objectives of this paper are to:

identify the data and data reporters required to develop a precise and comprehens-ive petroleum dataset for Australia

determine whether existing regulatory activities and/or the business data systems developed for them could separately or collectively be used as part of the mandat-ory petroleum data reporting regime

facilitate future government data requirements in a manner which minimises the regulatory burden on reporting entities.

Information on Australia’s liquid fuels market is required to provide a sound basis for Australia’s domestic liquid fuels policy, respond to national liquid fuels emergencies and meet international reporting obligations.

Australian petroleum data is currently collected under the voluntary petroleum report-ing regime – the Australian Petroleum Statistics. However, recurring data coverage and associated data quality issues have meant that it has not been possible to determine an accurate picture of Australia’s petroleum market. This voluntary data collection system will continue until – and for a transitional period after – the commencement of the Man-datory Reporting Regime.

The Mandatory Reporting Regime is proposed to be designed to capture information on how much petroleum and other feedstocks (e.g. crude oil, biofuels) and associated pet-roleum products (e.g. petrol, diesel, liquefied petroleum gas) enters, is moved and stored within the Australian petroleum supply chain. Natural gas is out of scope of this process; however consideration of the need for gas information during the development of the Mandatory Reporting Regime may enable efficiencies to be identified for any fu-ture processes.

Petroleum producers, refiners, importers, exporters, distributors, retailers, final users (e.g. mining and petrochemical) and users of Australian petroleum data are encouraged to lodge a submission. Your feedback is important so that an approach to the Mandat-ory Reporting Regime can be developed which aligns with the Australian Government’s needs and principles (outlined in Section 1.4) and minimises the regulatory burden on business.

The timeframe to develop and implement the Mandatory Reporting Regime will be in-formed by stakeholder responses received throughout the consultation process. Further phases of consultation are envisaged prior to the introduction of legislation.

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1. INTRODUCTION

1.1 THE NEED FOR A MANDATORY PETROLEUM DATA REPORTING REGIME

Information on Australia’s liquid fuels market is required to provide a sound basis for Australia’s domestic liquid fuels policy, respond to national liquid fuels emergencies and meet international reporting obligations. Key Australian Government uses of Australia’s petroleum data include:

meeting International Energy Agency (IEA) membership treaty commitments includ-ing monthly reporting of oil stockholding levels

informing and supporting the Minister for Resources and Energy’s decisions to activ-ate the Liquid Fuel Emergency Act 1984 (LFE Act) and subsequent use of powers

assessing Australia’s liquid fuels energy security position

liquid fuels and energy security policy development.

Currently, the most comprehensive set of petroleum data to inform policy development and emergency management is collected under the voluntary petroleum reporting re-gime – the Australian Petroleum Statistics (APS). However, recurring data coverage and associated data quality issues have meant that it has not been possible to determine an accurate picture of Australia’s petroleum market.

These issues have been exacerbated by Australia becoming a net importer of petroleum and structural changes in the Australian liquid fuels market, which has included greater importation of refined petroleum products and an increasingly diverse mix of businesses in the market. Due to the voluntary nature of the existing reporting regime, previous efforts to resolve these issues have not resulted in enduring improvements.

The credibility of Australia’s ongoing monthly liquid fuels data reporting has been identi-fied as an issue by key stakeholders. The 2012 IEA In-Depth Review of Australia recom-mended that “Australia take necessary steps to improve oil (and gas) data reporting. This may include placing a data reporting obligation on all industry participants.” The National Oil Supplies Emergency Committee (NOSEC) – which provides advice to the Minister under the auspices of the LFE Act – have also expressed support for improving the ability of monthly liquid fuels data to better support emergency response.

The Australian Government acknowledged the need for quality liquid fuels data in its En-ergy White Paper 2012. On 25 January 2013, the Australian Government announced1 its decision to pursue the development and implementation of a mandatory petroleum data reporting regime in consultation with relevant stakeholders. A regulation impact statement2 was also released following the announcement.

1 Media release, Mandatory Reporting to Improve Petroleum Data, 25 January 2013, http://minister.ret.gov.au/MediaCentre/MediaReleases/Pages/MandatoryReportingImprovePetroleumData.aspx2 The Regulation Impact Statement is available at: http://ris.finance.gov.au/2013/02/05/improv-ing-australias-liquid-fuels-data-regulation-impact-statement-department-of-resources-energy-and-tourism/

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1.2 AUSTRALIA’S PETROLEUM SUPPLY CHAIN

The Australian petroleum supply3 chain is complex, involves participants of varying size and contains many input and output points. The downstream industry has evolved around the five largest capital cities - Sydney, Melbourne, Brisbane, Perth and Adelaide - as a series of predominantly state-based refining, import and wholesale markets.

As illustrated in Figure 1, there are four general pathways for petroleum to flow into the Australian market and two pathways out.

Figure 1: Petroleum input and output pathways4

Upstream production

Imports

Exports

Downstream production

Distribution / sale

Final users

Crude & ORF

Biofuels production

The first inward pathway is the domestic production of crude oil, condensate, natural gas and liquefied petroleum gas (LPG) from naturally occurring sources. This production occurs both onshore (including within the 3 nautical mile limit from the coast) and in Australia’s offshore waters (past the 3 nautical mile limit). The distinction reflects that responsibility for petroleum exploration and mining licensing rests with State or Territ-ory governments for onshore activity and the Australian Government for offshore activ-ity.

The second inward pathway is the domestic production of biofuels. Biofuels are sup-plied to downstream producers as blending components for the manufacture of ethanol and biodiesel blended fuels.

3 Natural gas is excluded from oil/petroleum data in accordance with the IEA Energy Statistics Manual approach.4 Imports included biofuels, particularly biodiesel; ORF = other refinery feedstock.

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The third inward pathway is the downstream production of refined petroleum products. Australia currently has six operating petroleum refineries with total capacity of 44,040 ML per annum compared with domestic demand of 54,000 ML per annum. The refineries are located in Sydney (Kurnell – Caltex), Melbourne (Altona – Mobil), Geelong (Corio – Shell), Brisbane (Bulwer Island – BP and Lytton – Caltex), and Perth (Kwinana – BP). Following the cessation of operations at Caltex’s Kurnell refinery in mid-2014 and conversion to a fuel import facility, Australia’s refining capacity will reduce to 32,620 ML per annum. In addition, Shell announced on 4 April 2013 that its Geelong refinery is for sale and if a sale cannot be concluded other options could include converting the site to an import terminal.

Figure 2: Location of Australian refineries and major import terminal facilities5

The fourth inward pathway is the importation of crude oil, other refinery feedstock, bio-fuels and refined products. Imports occur as there is insufficient domestic production of crude oil to meet Australian demand and some Australian upstream production is better suited for export markets. In addition, Australian demand for refined petroleum products exceeds the domestic supply capacity of Australia’s refineries. Imports gener-ally occur in three ways:

imports of crude oil, other feedstocks and refined products by participants that un-dertake downstream production (refining and/or fuel blending) activities

imports of refined products by wholesalers (which may or may not include fuel blending activities) that supply bulk commercial customers and/or to retail operat-ors that subsequently on-sell supply to the general public

5 Shell’s Clyde infrastructure in Sydney is now being operated as a fuel import terminal. Mobil’s Port Stanvac refinery closed in 2002. Map sources: Australian Institute of Petroleum (2012) and BREE (2012).

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imports of bulk quantities of refined products by final users that by-pass refiners and wholesalers.

Imports are sourced from many countries and given Australia’s location, can take up to five weeks to arrive (see Figure 3). This diversity in supply enhances Australia’s liquid fuel energy security position by providing a range of alternatives.

Figure 3: Import sources and typical transport times

Source: Australian Institute of Petroleum

The internal pathway options within metropolitan and to regional areas include the use of pipelines, shipping to coastal terminals, road and/or rail transport to depots or retail sites. There are approximately 120 distribution businesses and 6400 service stations across Australia to facilitate the supply to final users.6

The two outward pathways relate to export opportunities. Australian upstream produ-cers export crude oil, condensate, natural gas and LPG on a commercial basis. Domestic downstream producers export a relatively small volume of refined petroleum products on a commercial basis. In addition, crude oil, other feedstocks, biofuel blendstocks, in-termediate and/or refined petroleum products are stored at each point of the supply chain.

6 Australasian Convenience and Petroleum Marketing Association data, 2011.

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1.3 THE AUSTRALIAN PETROLEUM STATISTICS

The collection of petroleum industry information – for example crude oil, aviation gasol-ine, diesel, motor gasoline, other refinery products, LPG and natural gas liquids7 - by Government predates Australia joining the IEA. However, the current APS form reflects the requirements of IEA reporting and the historical structure of the petroleum industry.

Currently, data is collected from petroleum market participants on a voluntary monthly basis and aggregated trade data is sourced from Customs via the Australian Bureau of Statistics. An aggregated subset of this data is published on a monthly basis in the Aus-tralian Petroleum Statistics publication on the Bureau of Resources and Energy Econom-ics (BREE) website www.bree.gov.au.

The APS has been the subject of a number of internal Government reviews over several years. While these reviews have consistently identified issues related to liquid fuels data coverage due to non-reporting by relevant stakeholders, they have also identified other associated data quality issues. Although many of the issues are possibly related to non-reporting, it is important to acknowledge that other issues exist that require considera-tion in order for the Mandatory Reporting Regime to be an improved data set.

Non-Reporting

Liquid fuel data is required from across the petroleum supply chain. From initial supply to final consumption, current reporting entities can be described in the following cat-egories:

• importers and exporters

• upstream petroleum producers

• downstream producers (refining)

• petroleum product wholesalers

• major petroleum product distributors

• petroleum product terminal operators

• biofuels blenders.

APS data collection has historically only involved approximately 75 businesses. It is es-timated that up to approximately 200 businesses could be reporting including future market entrants. The downstream sector has been dominated by the major oil refining businesses; however, more recently the market has changed.

7 Refer to Table 1 and Appendix 1 for information on the petroleum data collection.

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A greater number of ‘independent’ wholesalers, importers and biofuel producers and traditionally non-fuel market participants have entered the sector. These newer entrants are importing (or producing) and on-selling to wholesale and retail businesses that control their own storage facilities. The ACCC reports8 that the level of independent imports has increased more than four-fold since 2007-08 and accounted for about 30 per cent of total imports in 2011−12. The ACCC also notes that one of the key factors driving the growth in independent imports has been greater access to import terminals in the capital cities and to dependable sources of Australian standard refined petrol from overseas refineries.

The pace of change in the industry has led to a number of market participants being un-aware of the APS or not reporting on a consistent monthly basis. This has resulted in un-der reporting and inconsistent time series data for downstream petroleum sales, stocks and production.

Similarly in the upstream sector, issues exist with non-reporting by businesses or incom-plete data coverage. This has also resulted in under reporting of indigenous production, sales and stock holdings.

One example of the impact of non-reporting is the discrepancy around fuel oil sales data. A comparison of BREE’s Australian Energy Statistics9 (AES) annual data for 2010-11 with the APS for the same time period indicates that the level of APS reported fuel oil sales is around one-third of the combined production and import of fuel oil in the AES.

Incomplete Reporting

Instances of incomplete reporting are particularly difficult to identify as they are effect-ively obscured by non-reporting. Notwithstanding these difficulties, there are cases where new arrangements within the industry have led to incomplete data reporting. For example, petroleum products loaded onto ships or aircraft for use as bunker fuel do not appear to be completely captured in the import and export data. Quantifying the im-pact of this situation is difficult as the data provided to the APS is aggregated to a level which prevents analysis being undertaken.

Inaccurate Reporting

Even when businesses have provided complete petroleum data sets, inaccuracies have occurred and subsequently affected data quality.

8 Australian Competition and Consumer Commission (2012), Monitoring of the Australian Petroleum Industry – Report of the ACCC into the prices, costs and profits of unleaded petrol in Australia 2012.9 The Australian Energy Statistics is the authoritative and official source of energy data for Australia and forms the basis of Australia’s international reporting obligations. It is updated annually and consists of detailed historical energy consumption, production and trade statistics compiled from various sources.

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Liquid fuel data is reported to the IEA on a mass basis which requires both the volume and the density of a fuel to be known. While volumes of specific fuels are reported, density values are not always provided. In the absence of specific density values, aver-age density values for these fuels are used to calculate the APS data. The use of average density values can result in significant data quality issues as the density of some liquid fuels (e.g. crude oil) can vary by over 20 per cent.

It is also unclear whether some of the data currently provided to the APS is appropri-ately categorised. For example, the quantity of “other products” stocks appears very large when compared to the corresponding level of sales. In July 2012, stocks of “other products” corresponded to three years of sales. A possible explanation is that stocks of unfinished products, which require further refining, were being classified as “other products”.

1.4 MANDATORY REPORTING REGIME - GENERAL APPROACH

It is acknowledged that businesses in the petroleum market are already required to provide substantial information to various parts of the Australian Government to comply with existing regulatory requirements related to climate change, customs and excise. Obtaining the information directly from relevant agencies or utilising the systems set up by business to comply with existing regulation may assist in minimising the additional regulatory burden on businesses of the Mandatory Reporting Regime.

Accordingly, a number of overarching principles are proposed to guide the Mandatory Reporting Regime’s development, including that it:

minimises the additional regulatory burden on reporting entities (consistent with COAG’s National Partnership Agreement to Deliver a Seamless National Economy)

improves Australia’s petroleum data and addresses existing issues with the current APS

fulfils Australia’s international petroleum data reporting obligations

supports Australia’s domestic liquid fuels and related policy development and imple-mentation.

Essential to satisfying these principles will be that the Mandatory Reporting Regime’s development process is informed by petroleum industry participants and users of Aus-tralian petroleum industry data.

This Discussion Paper begins the stakeholder consultation process on the design and im-plementation of a mandatory petroleum data reporting regime for Australia. The main objectives of this paper are to:

identify the data and data reporters required to develop a precise and comprehens-ive petroleum dataset for Australia

determine whether existing regulatory activities and or the business data systems developed for them could separately or collectively be used as part of the mandat-ory petroleum data reporting regime

facilitate future government data requirements in a manner which minimises the regulatory burden on reporting entities.

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Section 2 describes the key regime elements of the Mandatory Reporting Regime includ-ing data coverage, data validation, data confidentiality and timing issues.

Section 3 provides an overview of other existing government activities which directly or indirectly may be utilised to provide petroleum data, future petroleum and related data needs to minimising the regulatory burden of the Mandatory Reporting Regime.

Section 4 outlines the stakeholder consultation process, submission timeframes and next steps in the development process.

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2. REGIME ELEMENTS

Petroleum industry participants collect and store detailed data to manage their invent-ory levels, operational logistics and supply chains. Such information includes:

location, capacity and throughput rates of storage tanks

feedstock, intermediate and finished product stock volumes

domestic production and import/export volumes

purchase and sales volume data including volumes held under bond and entered into the market for home consumption

location, volume and expected delivery timeframes for petroleum in transit (do-mestic and international).

The key regime elements discussed in this paper include data coverage, validation, con-fidentiality and timing.

2.1 DATA COVERAGE

Data

The Mandatory Reporting Regime will enable Australia to meet IEA membership com-mitments relating to monthly reporting of oil stockholding levels and inform other liquid fuel related responsibilities and policy considerations. In order for this to occur, data on all sources of petroleum supply, including crude oil, natural gas liquids, refinery feed-stocks, additives/oxygenates (including biofuels) and other liquid hydrocarbons (such as synthetic crude oil), and the uses of the derived products (e.g. petrol, diesel) could be within scope.

The Australian Government also reports natural gas data to the IEA. The indigenous pro-duction and final consumption of natural gas (such as the use of LNG and CNG for trans-port purposes) is reported in the IEA Natural Gas Questionnaire, which is separate to the IEA Oil Questionnaire and Monthly Oil Survey. Therefore natural gas data is not being considered in the development of the regimes elements at this time. However, gas will be considered in the context of a related data set which – if taken into account at this time – may potentially minimise possible future reporting burdens on reporting entities (refer to Section 3.3 below).

Table 1 illustrates the primary and secondary oil product categories used for IEA pur-poses.

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Table 1: IEA Energy Statistics headings10

PRIMARY OIL PRODUCTS

Crude oil

Natural gas liquids

Other hydrocarbons

SECONDARY PRODUCTSINPUTS TO REFINERY

Additive/blending components

Refinery feedstocks

SECONDARY OIL PRODUCTS

Refinery gas Transport diesel

Ethane Heating and other gasoil

Liquefied petroleum gasesRes. Fuel: low-sulphur

content

NaphthaRes. Fuel: high-sulphur

content

Aviation gasoline White spirit + SBP

Gasoline type jet fuel Lubricants

Unleaded gasoline Bitumen

Leaded gasoline11 Paraffin waxes

Kerosene type jet fuel Petroleum coke

Other kerosene Other products

Boundaries

As noted in Section 1, Australia’s petroleum supply chain has been evolving over time and the boundaries of the Mandatory Reporting Regime need to reflect these changes. The most marked change is Australia’s increasing reliance on imported crude oil and pet-roleum products, which is generally transported by sea.

Accordingly, it would not be possible to provide a comprehensive picture of Australia’s petroleum supply chain without considering the inclusion of liquid fuel stocks and flows in tankers en route to and around Australia. It is understood that major importers have the ability to track their international shipping consignments from the time when the crude oil or products have been loaded onto tankers ready for departure to Australia. However, the ability of stakeholders to provide this “stock-on-water” data and its level of detail will be important determinants.

A clear picture of the distribution and storage of petroleum within Australia is also im-portant to enable the Australian Government to manage liquid fuel emergencies. More complete data on petroleum storage would also enable Australia to more accurately de-termine its stockholding position in relation to its IEA obligation.

10 More detailed fuel sub categories are listed in Appendix 1.11 While leaded gasoline was phased-out in Australia in 2002, it is included here as it remains an IEA category which applies to all IEA countries.

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For example, the IEA stockholding position provides for the inclusion of stock on inter-coastal shipping routes and at import and inland terminals. The 2009 Petroleum Import Infrastructure Audit Report only provides storage capacity and throughput information for about 64 import terminals. Further information about the 450 distribution and stor-age locations12 across Australia would assist with determining the boundaries of the Mandatory Reporting Regime and to manage emergencies.

While there have been many changes in the petroleum supply chain, the exit point (home consumption) has not altered. However, determining an appropriate exit bound-ary for the Mandatory Reporting Regime is more complex as it is not feasible to seek in-formation from all consumers. Under the APS, the exit boundary for data collection is the last point in the supply chain prior to the point of retail sales of fuel.

In general, this has meant that data has only been sought from the downstream produc-tion and distribution sectors. Again, the changes in the nature of the petroleum sector will impact the ability to rely solely on this approach in the future. In particular, where petroleum is imported directly by retailers or consumers that bypass the downstream production and distribution sectors, it will be necessary to determine a boundary which will ensure this data is captured.

Respondents

Within the boundaries of the regime it will be necessary to determine which businesses should be required to report. Table 2 depicts the type of data that may need to be provided by businesses operating in various parts of the liquid fuel supply chain.

Table 2: Liquid fuel supply chain, by data categories

DATA CATEGORIES

PRODUCERS

REFINERS

WHOLESALERS

DISTRIBUTORS

RETAILERS

FINAL USERS*

Crude Oil/ Other refinery inputs/Unfinished product

production

import

export

purchases/sales

stocks

Finished products

production If blending

If blending

import

export

sales/pur-chases

stocks

*Some major consumers are direct importers of final product and hold significant stock.

12 Australasian Convenience and Petroleum Marketers Association, ACAPMA Federal Budget Sub-mission 2013-14.

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To enable compliance with IEA reporting obligations, it is necessary to obtain a precise record of domestic consumption of liquid fuels by collecting sales data. A comprehens-ive and precise set of sales data may be able to be obtained without requiring reporting by retailers (e.g. service stations). Consideration needs to be given to whether it is ne-cessary to obtain sales data from distributors or whether the relevant data can be ob-tained from refiners, importers and wholesalers. This highlights the need to determine who owns the liquid fuels and where changes of ownership occur in the supply chain.

One aspect of the petroleum supply chain not illustrated in Table 2 is the complexity of the commercial arrangements that occur between businesses. For example, one busi-ness may be responsible for importing a petroleum product while other businesses may be responsible for wholesaling and distribution. Furthermore, it is not uncommon for li-quid fuel stocks to be owned by a petroleum business and stored in a facility owned by an independent terminal operator.

In order for a comprehensive and precise data set to be collected it will be necessary to define the relevant businesses across the supply chain and identify which ones will be required to provide data. This may be possible by simply requiring the owner of the fuel to be responsible for data reporting and for changes of ownership to identify reporting points across the supply chain. However, situations where one business could report on others behalf (i.e. joint ventures) may also need to be accommodated to minimise regu-latory burden and data complexity.

Alternatively, it may be possible to define the respondent by applying data thresholds, below which reporting will not be required. This approach of using thresholds to ex-empt parties from regulatory activities is already applied in clean energy legislation. However, determining a threshold which does not capture respondents from outside the regime boundaries or has a significantly detrimental impact on Australia’s calcula-tion of total stockholding of liquid fuels would need careful consideration.

A third option would be to place the data reporting obligation on the facility owner where the fuel is stored on behalf of a number of businesses. However, it is acknow-ledged that the facility owner may neither track the fuel as closely as the fuel owner and contractual obligations may also create additional reporting difficulties which may render this option impractical.

2.2 VALIDATION

A critical requirement for development and implementation of the Mandatory Reporting Regime is that it not only improves coverage but that it is also more accurate than the current APS. In order to achieve this, it will be important that the individual respondent data and the complete data set have been – or are able to be – validated.

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Data accuracy

There are a range of factors which affect data accuracy including the need to estimate missing information and avoid the misclassification of data. In determining the required accuracy of the Mandatory Reporting Regime, it will be necessary to consider the ac-ceptable levels of error. The IEA Energy Statistics Manual suggests that the percentage difference between calculated and observed data which is considered acceptable will depend on the magnitude of the supply of the energy commodity.

For major supplies (e.g. total petroleum products) the IEA recommends that statistical differences are kept below 1 per cent. On the other hand, for a minor commodity (e.g. lubricants), a 10 per cent error can be tolerated. The United Kingdom has set a toler-ance of 0.5 per cent13 for its annual statistical balance in its petroleum statistics.

An approach to reducing avoidable error is to require the use of a reporting template which contains clear product and category definitions. While the APS regime incorpor-ates a reporting template, reporters are not required, and many have not used, the tem-plate.

In developing a data reporting template for the Mandatory Reporting Regime, it is in-structive to compare the liquid fuel data categories reported and published by the US Energy Information Agency (EIA) with the corresponding APS categories (Appendix 1). Some of the EIA reported categories appear to be more clearly defined than the APS re-porting categories. For example, the categories used by the EIA draw a clear distinction between stocks of finished and unfinished product.

It will be necessary to ensure that the reporting categories and units of measurement are consistent with Australian practices and existing Australian reporting regimes which include petroleum data. As business names for products differ, an agreed set of generic category names may facilitate accurate and consistent reporting. Further, while the mandatory template could be based on the US EIA template, it may be possible to re-duce the number of reported categories without unduly compromising data required for reporting to the IEA or for LFE Act purposes.

Business validation

The reporting template used by the IEA for determining a country’s stockholding obliga-tion incorporates a data quality check to determine the statistical difference between calculated14 and observed sales data. In addition, a Mandatory Reporting Regime tem-plate could be designed to aid checking that – for example – opening stock data in the current month is consistent with the previous month’s closing stock data and that it is internally consistent (i.e. the parts add up to the total).

13 UK Department of Energy and Climate Change, Crude oil and petroleum products – methodo-logy note https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/65736/58-crude-oil-methodology.pdf14 ‘Observed’ data is the reported value. ‘Calculated’ data is the result of a data validation tool (a formula) used to check whether data reported is balanced. For example, Sales (calculated) = Re-finery production + Imports – Exports – Stock Change.

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A data validation approach which is cognisant of businesses’ existing practices and that ensures consistency internally and with past data could be incorporated into the Man-datory Reporting Regime’s template to reduce the reporting burden.

Incorporating data validation checks into the reporting template could also help to cla-rify whether any data quality issues are associated with data provided by individual re-porters or are associated with incomplete coverage of data across the liquid fuel supply chain. This approach to data validation could also reduce the need for more costly data validation options such as audits of individual reporters.

Government validation

With any regulatory regime, the Australian Government will need to institute its own in-ternal and external validation processes to ensure information is being provided by busi-nesses and that the information provided is accurate.

Government validation of data could include:

providing training to respondents on expectations

reviewing and comparing reported data with other publicly available data sets

undertaking audits of obligated parties where an appropriate audit has not already been undertaken under other existing reporting regimes.

2.3 CONFIDENTIALITY

Non-reporters approached to commence or recommence reporting petroleum data to the APS consistently raised concerns about confidentiality of business-level data within the system. Specific issues related to publishing information in the Australian Petroleum Statistics publication and contractual restrictions on third party reporting.

Accordingly, a key consideration for the Mandatory Reporting Regime will be the need to store and maintain an appropriate level of confidentiality for business-level data. The legislation required to implement the Mandatory Reporting Regime will therefore need to include confidentiality clauses15 to ensure information provided to the responsible agency is handled and potentially shared appropriately where this aids in minimising regulatory burden.

Aggregation and publication of data

The petroleum industry, financial market participants and other interested parties use published Australian petroleum data to inform their analysis of the current status and potential future of the sector for investment decisions and broader economic analysis.

Most of the existing activities where petroleum data is available (see Section 3) result in some form of publication16 of aggregated data for public consumption. For example, the

15 Part 4 of the National Greenhouse and Energy Reporting Act 2007 may in part provide some guidance on how this can be achieved.16 Due to legislated confidentiality provisions, the publication of data under some reporting regimes is delayed. Further discussion on the restrictions on data publication and/or sharing is

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existing voluntary APS reporting regime results in the monthly Australian Petroleum Statistics publication and provision of data to the IEA for its Monthly Oil Survey (MOS), Joint Oil Data Initiative (JODI), website information on Australia’s oil stock holding posi-tion and other publications. A description of how Australia’s 90-day net import figure is calculated from the MOS is provided at Appendix 2.

Currently, business-level data is collected and the Australian Government publishes and/or reports aggregated petroleum data at the national, State, Territory and/or re-gional level. For example, business-level product sales data is aggregated and published in the APS as total sales of discrete finished products on a national and State/Territory level.

For international reporting purposes, petroleum data is aggregated at the national level. For example, the IEA MOS requires Australia to report the quantity of “total stocks” (i.e. stocks of crude oil + stocks of condensate + stocks of ULP + etc.) on a national level. However, reporters provide discrete stock quantities for the various feedstocks, inter-mediate and finished products at the refinery-level.

The potential future growth of domestic production, consumption and trade in niche products (e.g. alternative transport fuels) will require particular consideration when de-ciding how best to protect the confidentiality of market sensitive information. For ex-ample, if there are only one or two suppliers of advanced biofuels or shale-to-liquids in Australia in the future, the publication of production or sales figures at any level could essentially result in the identification of business level information.

Contractual restrictions on the provision of data

A common feature of commercial contracts is the confidentiality clause. Such clauses usually restrict the ability to share general information about the contracted activity (i.e. volumes, scheduled transfers, pricing) and can even prevent acknowledgement of the existence of the contract. This is a possible reason that third party stock holders are un-able/unwilling to provide information on who owns the (or how many businesses have) stock which is being held in their facility and/or the breakdown of volumes held for those businesses. However, commercial contracts also provide for exceptions to the confidentiality of information such as in the circumstance where disclosure is required in accordance to an applicable law.

There are also restrictions on the Australian Government’s ability to share petroleum data, which is discussed further in Section 3.2. However, it is worth noting that it is not uncommon for the Australian Government to require commercially sensitive informa-tion to enable regulatory functions to be performed such as occurs for tax purposes.

2.4 TIMING

Under the IEA reporting obligation, Australia is required to report its net import petro-leum stockholding position on a monthly basis to the IEA17. This stockholding position

provided in Section 3.17 Oil data is collected from businesses on a monthly basis, one month in arrears on the 19th of each month.

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represents the end-of-month (EOM) status. As such, it will be necessary to continue this monthly reporting timeframe.

As noted in the discussion on boundaries, it is understood that importers, for example, have the ability to track their international shipping consignments and this could pos-sibly be close to a real time basis. Excise reporting for many businesses is undertaken on a weekly basis with smaller businesses able to report on a monthly basis. Currently those businesses that provide petroleum data voluntarily for the APS provide it on a monthly basis.

To determine an appropriate timeframe for reporting, the time requirements for both respondents and Government will need to be taken into account. For respondents, data extraction and collation of the data into a report to government all has to be considered. For government, business validation, data entry, comparative assessment and possible compliance actions need to be considered.

One possible approach is for businesses to collate and report their data within seven days following the end-of-month. If the +7 day reporting requirement is achievable, this will provide more time for government data validation prior to submission of interna-tional reports. However, it is also acknowledged that providing more time for busi-nesses to validate their data may contribute to better data accuracy.

Alternatively, it may be justifiable for reporting to occur on a more frequent basis than monthly. For example, in the event that the LFE Act is activated, reporters may be re-quired to comply with the Minister’s direction to report on a daily, weekly, or some other basis. To cater for this situation, it may be beneficial for reporting to occur on a more frequent basis. For example, reporting in the US is on a weekly basis.

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3. AUSTRALIAN PETROLEUM DATA

The Australian Government requires petroleum data for a number of purposes including to meet international and domestic reporting, manage liquid fuel emergencies and de-velop liquid fuel policies. Industry participants collect petroleum data to satisfy their own market disclosure, investment decisions and logistics management needs.

In addition to the APS, there are a number of legislative mechanisms (Australian, State and/or Territory government level) that currently require, or could potentially require, the collection of information which could contribute to the requirements of the Mandatory Reporting Regime. The relationship between data sets collected, or potentially collected, from petroleum supply chain participants through various legislative mechanisms are shown in Figure 4.

A brief description of each of the existing legislative mechanisms which may have associated petroleum data, and some of the publications which Australian petroleum data is publicly reported follows.

Figure 4: Relationship of existing legislative mechanisms to petroleum data collection 18

<-----------------Customs Act 1901, Customs Tariff Act 1995, Excise Act 1901 and Excise Tariff Act 1921 ---------------->

<-- State & Territory--> <-- State & Territory--->

<--------------------- NGERS Act -------------------> <----- NGERS Act ------>

<----------------------------------- LFE Act ---------------------------------------->

<---- OPGGS Act ------><---------------------------------------- ACCC -------------------------------------->

<------------------------------------------------------------------- ABS ------------------------------------------------------------------------>

Upstream production

Imports

Exports

Downstream production

Distribution / sale

Final users

18 It should be noted that whilst petroleum data is collected from across the supply chain not all of this data would be required and/or suitable for the reporting requirements being considered in this paper. The key issue for this process is to avoid, where possible, reporting duplication.

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3.1 EXISTING DATA COLLECTION PROCESSES

Liquid Fuels Emergency Act 1984

In the event of a fuel shortage with national implications or the need for Australia to meet its commitments to the IEA under treaty obligations, the LFE Act provides the Minister for Resources and Energy with wide-ranging powers to control the drawdown, transfer and sale of industry stocks of crude oil and liquid fuels. It also provides the Minister with the power to control the range of products produced by Australian refineries and to direct bulk and retail sales of fuel across Australia.

In the lead up to and during a national liquid fuel emergency, the Minister can direct companies to collect and provide specific information to support the Minister’s decision making and subsequent media statements to inform the public of the emergency. The National Liquid Fuel Emergency Response Plan (NLFERP) was developed and agreed by NOSEC19 and notes that the following types of information may be requested in such emergency events:

the nature of the event

the geographic area affected

time the event occurred

current demand

current stock position and level of stock accessibility

response strategies implemented

estimated time to restore normal supplies.

Importantly, it should be noted that since its establishment, activation of the LFE Act has not been required, therefore regular collection of data under the Act has not occurred. However, to assist with the identification of potential issues the petroleum industry members of NOSEC voluntarily provide petroleum data regularly to the Australian Government via the APS process and to facilitate participation in IEA emergency responses.

Offshore Petroleum Greenhouse Gas Storage Act 2006

The Offshore Petroleum Greenhouse Gas Storage Act 2006 and Offshore Petroleum (Resource Management and Administration) Regulations 2011 provides the legal framework to compel companies to collect and provide offshore petroleum related data to the Australian Government.

19 NOSEC is chaired by the Department of Resources, Energy and Tourism and its members in-clude representatives from State and Territory Governments, the Australian Institute of Petro-leum, the Shell Company of Australia, ExxonMobil Australia, Caltex Australia Petroleum Pty Ltd, BP Australia Limited and Woolworths Petrol.

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Petroleum titleholders20 are required to keep records and provide information to the Titles Administrator21. Petroleum production licensees must provide monthly production reports22 which include information on well operations and the production, use, injection, storage and delivery of liquid and gaseous petroleum and/or water in the licence area.

National Greenhouse and Energy Reporting Act 2007

The National Greenhouse and Energy Reporting Act 2007 (NGER Act) introduced a single national framework for reporting and disseminating company information about greenhouse gas emissions, energy production, energy consumption and other information specified under NGER Act.

Companies must provide the Clean Energy Regulator (CER) with annual reports on greenhouse gas emissions, energy production, energy consumption and other information. The National Greenhouse and Energy Reporting Regulations 2008 and supporting National Greenhouse and Energy Reporting (Measurement) Determination 2008 provides detail on the required information and calculation methodologies. The CER publishes individual company information if the relevant publishing thresholds23 for scope 1 (direct) and scope 2 (indirect) greenhouse gas emissions are met.

Fuel Taxation and Trade Legislation

The Customs Act 1901, Customs Tariff Act 1995 and supporting regulations provide the framework to allow the import and export of goods and the collection of customs duties. The Excise Act 1901, Excise Tariff Act 1921 and supporting regulations provides the framework for the taxation of fuel which is domestically produced or manufactured.

Imports and exports of goods must be declared to – and receive clearances from – the Customs and Border Protection Service. Imports and exports of goods must be declared on the Customs’ Integrated Cargo System (ICS), which is the online tool for lodging declarations, with payments of excise-equivalent customs duty made to the Australian Taxation Office (ATO)24.

20 The term ‘petroleum titleholders’ refers collectively to persons defined as: (a) a petroleum ex-ploration permittee; (b) a petroleum retention lessee; (c) a petroleum production licensee; (d) the registered holder of a petroleum special prospecting authority; (e) the registered holder of a petroleum access authority; (f) the holder of a scientific investigation consent.21 The current ‘Titles Administrator’ is the National Offshore Petroleum Titles Administrator (NOPTA).22 Refer to Subdivision 3.4 (Other Reports), Regulation 7.19 of the Offshore Petroleum (Resource Management and Administration) Regulations 2011.23 See http://www.cleanenergyregulator.gov.au/National-Greenhouse-and-Energy-Reporting/About-NGER/published-information/Pages/default.aspx. 24 From 1 July 2010, responsibility for the administration of excise-equivalent goods that are warehoused moved from Customs and Border Protection to the Australian Taxation Office.

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For domestically produced or manufactured fuels, excise returns (manual, paper-based) must be lodged with the ATO prior to being entered for home (i.e. Australian domestic) consumption. Excise-equivalent customs duty is payable on specified imported goods prior to being released for home consumption. A periodic settlement approval can be obtained, which allows for eligible businesses to lodge excise returns on a periodic basis (i.e. weekly or monthly).

The information required for calculating excise or excise-equivalent customs duty on fuels includes total volumes and units of measurement, type of good, and (in the case of imports) the date of import and appropriate tariff classification number. It is acknowledged that businesses which are required to comply with the existing customs and excise regulatory requirements have developed systems which may minimise the additional regulatory burden of the Mandatory Reporting Regime, if directly or indirectly utilised.

Australian Competition and Consumer Commission directives

The Australian Competition and Consumer Commission’s (ACCC) main roles in the petrol industry include:

enforcement and compliance: ensuring compliance with and enforcement of the provisions of the Competition and Consumer Act 2010 (the Act) in the petrol industry

monitoring: including preparing annual monitoring reports as directed by the minis-ter

public information and education: informing the public about the fuel industry.

Under the Act, the ACCC may also be required to fulfil other specific functions including responsibilities to hold price inquiries.

The ACCC’s annual monitoring report collects information on the prices, costs and profits of unleaded petroleum products, including regular unleaded petrol (RULP), premium unleaded petrol (PULP) and ethanol blended petrol (EBP) as well as the prices of diesel and automotive liquefied petroleum gas (LPG). Information is sourced from refiner-marketers, refiner-wholesalers, supermarket chains, independent wholesalers, independent retail chains, terminal owners/operators.25

Australian Bureau of Statistics (ABS) survey and census activities

The ABS undertakes and publishes data from annual and quarterly survey and census activities on various issues. The ABS also has access to trade data declared to Customs and aggregates this data prior to making it publicly available to protect the confidentiality of commercially sensitive information.

25 Refer to page 4 of the ACCC’s 2012 Petrol monitoring report for the list of companies under each category.

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The ABS collects petroleum related data to inform publications such as the annual and quarterly National Accounts, the Input-Output tables, the Producer Price Indexes and annual Census of Motor Vehicles.26 Strict confidentiality restrictions are set out in the Census and Statistics Act 1905.

State and Territory Government activities

State and Territory Governments are responsible for the issuance of petroleum exploration and mining licenses, regulation of environmental protection requirements and the collection of royalties in their respective onshore and coastal jurisdictional areas. This role enables State and Territory Governments to, as part of licence commitments, require companies to collect and provide petroleum production and other data.

Petroleum data is commonly provided to jurisdictions on an annual basis. Due to confidentiality restrictions, petroleum data collected under State and Territory legislation is not usually publicly released until at least one year after it is provided to the government – in some cases, there can be a delay of up to five years27.

Some jurisdictions also collect fuel sales data to assist with the calculation for greenhouse gas emissions contribution of the transport sector. For example, the Environment Protection Act 1997 (EP ACT) provides the authority for the Australian Capital Territory Government to collect fuel data for the development of the ACT’s greenhouse gas inventory. It requires service station occupiers28 to report to the Director-General by 30 September each year sales of unpackaged volumes of liquid fuel by fuel type for the preceding financial year.

Australian Securities Exchange disclosure and market analysis

Another source of petroleum data available are company statements on the Australian Securities Exchange (ASX). ASX listed companies are required to publish quarterly, half-year and annual reports in accordance with the ASX listing rules29. In these reports, petroleum companies generally disclose information such as production volume(s), financial outcomes (e.g. sales revenue, profits/loss), infrastructure investment decisions and other key influences on – or changes in – the company’s actual and expected performance.

26 Refer to publication numbers 5204.0, 5206.0, 5209.0.55.001, 6427.0 and 9309.0.27 Under both the Victorian and Commonwealth Petroleum Acts, basic and interpretative data has to be submitted to the Government. After a short confidentiality period, this data is generally made available. The confidentiality period, of interpretative data, is dependent on a number of factors and requires a clearance process. For offshore data it is usually two years for basic data and five years for interpretive data. For offshore production licence areas, basic data is usually available after one year from submission.28 Fuel sales data is collected from each ACT service station in preference to local wholesalers be-cause service stations obtain fuel from wholesalers both within and outside the ACT or directly from fuel importers and refineries.29 See http://www.asxgroup.com.au/asx-listing-rules-guidance-notes-and-waivers.htm.

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3.2 EXISTING DATA USE FOR THE MANDATORY REPORTING REGIME

Consistent with the COAG objectives under the National Partnership to Deliver a Seam-less National Economy, the Mandatory Reporting Regime for petroleum data could provide a step towards harmonising petroleum data collection. In accordance with the principle to minimise the regulatory burden from mandatory petroleum reporting on ob-ligated parties, access to some – or all – elements of existing mechanisms which obtain petroleum data could help achieve the desired outcomes. As discussed in Section 2, the ability to access and/or publish petroleum data from these existing mechanisms may be prevented by existing legislation unless changed.

However, as noted above, participants in the petroleum market have developed systems to facilitate the provision of data to these existing mechanisms. As such, utilising these systems set up by business to comply may be an alternative to assist in minimising the additional regulatory burden on businesses of the Mandatory Reporting Regime.

As the existing voluntary APS reporting regime will cease following a transition period upon the commencement of the Mandatory Reporting Regime, consideration and com-parison of the APS is not included in this section.

Comparison of data categories

On the face of it, the existing mechanisms appear to fulfil coverage needs in respect to the breadth of participants in the Australian petroleum supply chain. However, a comparison of the data categories collected by each mechanism is required to determine the extent of data coverage.The categories of common, core petroleum data required for the existing mechanisms data can be described in the following generic terms:

Fuel types

o Upstream production – crude oil, condensate, natural gas, natural gas li-quids, ethane, liquid petroleum gas (LPG)

o Downstream refining and marketing – feedstock (incl. crude oil / condens-ate), finished products (e.g. petrol, diesel, biodiesel, jet fuel, ethanol-blends, LPG, heating oil, residual fuel oil, bitumen, other products) and unfinished products.

Supply points / stages – upstream production facilities, downstream refiners, ter-minals, wholesale distributors, retail outlets (demand), trade (import / export) and stocks.

Key metrics – volume, tonnage, density, location, capacity, throughput and temper-ature30.

Figure 5 highlights some of the fuel type categories which are covered under the existing

30 The petroleum industry standard for reporting is for the fuel to be measured at a temperature of 15 degrees Celsius and at a pressure of 101.325 kilopascals.

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trade, taxation, offshore petroleum, NGER, LFE Act and State/Territory government mechanisms.31

Figure 5: Comparison of existing petroleum data reporting regime data categories, by fuel type

Crude oil Crude oil Crude oil Crude oil Crude oil Condensate Condensate Condensate Condensate Condensate Natural gas Natural gas Natural gas Natural gas Natural gas Other refinery feedstock Petroleum/refinery coke Gasoline Gasoline Motor spirit Petrol Diesel Diesel Automotive distillate Diesel Diesel oil Industrial diesel fuel Ethanol / biodiesel Biofuel / biogas Ethanol / biodiesel Biofuels LPG / CNG / LNG LPG LPG / CNG / LNG LPG / CNG / LNG LPG Aviation gasoline Aviation gasoline Aviation gasoline Aviation kerosene Aviation kerosene Aviation turbine fuel Fuel oil Fuel oil Fuel oil Heating oil Heating oil Heating oil Petroleum based oils / greases Petroleum based greases Lubricating oil / grease Mineral turpentine Waxes Synthetic fuels White spirit Kerosene Lighting kerosene Kerosene Hydrogen Power kerosene Liquid aromatic hydrocarbons Liquid aromatic hydrocarbons Bitumen Bitumen Naphtha Naphtha International bunker fuel Methanol

Customs and Excise Acts

OPGGS Act NGER Act LFE Act State / Territory

As discussed below, there may be legal restrictions on the ‘ring-fencing’ and/or sharing of data between agencies. If stakeholders consider that a combination of the existing mechanisms could adequately fulfil the needs of the Mandatory Reporting Regime, the Government would need to seek advice on the ability to share particular unit level data between agencies, and/or amend legislation or regulation to make it possible.

Timing

The timing of reporting under the existing mechanisms varies from potentially an ad-hoc basis under the LFE Act, through weekly and monthly reporting requirements for excise, to annual reporting under the NGER Act. As such, the ability to use a combination of existing mechanisms will be dependent on the timeframes being aligned around the requirements outlined in Section 2.4 for end-of-month reporting.

31 The reference to Natural Gas in the Customs and Excise category relates only to that which in-curs a charge such as CNG/LNG for transport purposes.

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Restrictions on data publication and/or sharing

The Offshore Petroleum Greenhouse Gas Storage Act 2006 Chapter 7 deals with information relating to petroleum and provides the authority for the Titles Administrator to direct title holders to keep records and samples, give reports and establish regulations in relation to data management. It also restricts the release of technical information and samples obtained by the responsible Commonwealth Minister or Titles Administrator. The Offshore Petroleum Greenhouse Gas Storage (Resource Management and Administration) Regulations 2011 sets out the reporting requirements for petroleum data in detail and Regulation 8.02 outlines the four circumstances where documentary information can be classed as “permanently confidential information”.

The ABS has a legal obligation to ensure that confidential data is not released under the Census and Statistics Act 190532. The ABS can prevent the identification of the activities of individual exporters and importers by suppressing33 international merchandise trade statistics through the aggregation of two or more sets of data. For this to occur, individuals or organisations concerned can request a confidentiality review and provide relevant information including the reasons for data suppression. The ABS investigates every request for a restriction in terms of the number of traders and the respective significance of their trade. However, regardless of the reason for requesting confidentiality, if the person or organisation has shown that disclosure would enable the identification of that person or organisation, then the ABS is legally required34 not to disclose the information.

Similarly, division 355 of the Taxation Administration Act 1935 prohibits the disclosure of information about the tax affairs of a particular entity except in certain specified circumstances, and Section 16 of the Customs Administration Act 1985 also provides for the sharing of information in certain circumstances. Those exceptions primarily relate to disclosure to other Australian Government agencies to facilitate the administration of related taxation and other legislation. The exceptions are designed having regard to the principle that disclosure of information should be permitted only if the public benefit derived from the disclosure outweighs the entity’s privacy.

Data collected by the ACCC for its annual petrol monitoring report is provided by monitored companies on a confidential basis and cannot be provided to third parties.

The above examples of confidentiality provisions also inherently prohibit the provision of data collected under these mechanisms to all (or some) other Australian Government agencies. Therefore if the use of any of the existing petroleum data collected by government is to be considered as part of the Mandatory Reporting Regime, the ability to make – and the type of – consequential amendments to the relevant legislation would need to be considered.

32 In relation to International Trade statistics, the relevant ABS legislation which makes provision for the protection of confidential data is: (a) the Census and Statistics Act 1905 (CSA), subsection 12(2), and subsection 13(1); and (b) the Statistics Determination under section 13 of the CSA.33 Details of confidentiality restrictions are advised each month in International Merchandise Trade: Confidential Commodities List (cat. no. 5372.0.55.001).34 See Paragraphs 10 and 12 of the Census and Statistics Act 1905. Penalties apply if such infor-mation is disclosed.

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Part 4 of the NGER Act provides some insight into how confidentiality issues could be addressed. The NGER Act specifies the types, levels and when information must/may be published and the circumstances when information cannot be published. This Part also includes penalties of up to two years imprisonment and/or 120 penalty units for the offence of disclosing particular information.

3.3 RELATED AND FUTURE DATA NEEDS

The Australian Government is proposing to reduce business reporting burdens by expanding use of electronic Standard Business Reporting (SBR) to include all business electronic reporting to the ATO; employer reporting obligations to the Department of Human Services; and paper-based reporting to the Insolvency and Trustee Services and the new Australian Charities and Not-for-Profit Commission. In addition, the development of a core set of data items is being considered by Government with a view to reducing the data provision burden.

Another consideration related to the Government’s efforts to minimise reporting burdens, is the ability of the Mandatory Reporting Regime to either accommodate or negate the need for duplicate data collection. As such, the Mandatory Reporting Regime not only has the ability to use existing mechanisms as its basis, but there is also the potential for the Mandatory Reporting Regime to remove the need for other data collections by other Government agencies. An example would be to collect petroleum pricing information that is currently collected and published by the Australian Bureau of Statistics under the Mandatory Reporting Regime.

Further, it may be possible to design the Mandatory Reporting Regime in a way that facilitates future collection of other petroleum related data and/or information about other commodities in an efficient manner. While natural gas data is out of scope of the petroleum Mandatory Reporting Regime, considering the need for gas information during the development of the Mandatory Reporting Regime may enable efficiencies to be identified.

If these initiatives are taken into account during the development of the Mandatory Reporting Regime it would potentially minimise possible future reporting burdens on reporting entities.

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4. STAKEHOLDER CONSULTATION AND NEXT STEPS

4.1 CONSULTATION PROCESS

Stakeholders are invited to lodge written submissions to inform the development of the Mandatory Reporting Regime. The submission period closes 5.00pm Friday 5 July 2013. Submissions should be sent electronically to TransportFuels@ret.gov.au or mailed to:

Manager - Petroleum Statistics MeasureEnergy Security Branch

Department of Resources, Energy and TourismGPO Box 1564

Canberra ACT 2601

Any questions regarding the submission process or requests for meetings with the Petroleum Statistics Measure project team should be directed to TransportFuels@ret.gov.au in the first instance.

4.2 GUIDANCE

Petroleum producers, refiners, importers, exporters, distributors, retailers, final users (e.g. mining and petrochemical) and users of Australian petroleum data are encouraged to lodge a submission. Your feedback is important so that an approach to the Mandatory Reporting Regime can be developed which aligns with the needs and principles outlined in Section 1.4 and minimises the impact on business. Your feedback will inform consideration of the preferred implementation option; particularly the regime boundaries which determine which industry participants will be included or excluded from reporting.

Submissions should provide your perspective on the Regime Elements (Section 2), the potential to utilise existing mechanisms in an amended format (Section 3) and/or preference for a separate system (which could accommodate other data requirements) to minimise disruptions to existing systems and minimise the regulatory burden. In particular, you should comment on the elements of data coverage, regime boundary setting; respondent identification; data accuracy and validation; confidentiality and timing of reporting and any other matters you consider may be useful in determining a preferred option for implementation.

Stakeholders may find the following set of questions useful to guide responses:

1. Does your business currently provide petroleum related information to the Aus-tralian Government and does this include voluntarily reporting to the APS?

2. Has your business developed a data system to facilitate providing petroleum related information to the Australian Government?

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3. Are the APS data categories in Table A of Appendix 1 similar to those you use in a system not used for voluntary APS purposes? If not, do you consider that you could extract the information for Appendix 1 from your existing data system?

4. What are the appropriate entry boundary, exit boundary and key intermediary points for measuring and reporting petroleum in the Australian supply chain?

5. Who should be responsible for reporting petroleum data (e.g. petroleum producers, owner of petroleum stocks, storage facilities, distributors) and should there be any exemptions?

6. Do you consider that a reporting template (which could be specific to each part of the petroleum supply chain) would be helpful? Should the template include inform-ation regarding data validation?

7. What approach should the Mandatory Reporting Regime take in respect to confid-entiality?

8. Are you in favour of publishing aggregated petroleum data, similar to the current APS publication if individual business information cannot be identified?

9. What is a reasonable timeframe (e.g. +7 days) to require the reporting of end of month data?

Please note that submissions will be treated as unclassified material and may be pub-lished on the RET website, unless otherwise specified or requested. Therefore, any con-fidential material should be clearly identified and be provided in an appropriately marked appendix. Freedom of Information may still apply to such material.

4.3 NEXT STEPS

Given the range, complexity and technical nature of data within the Australian petroleum industry and the need for thorough stakeholder consultation throughout the process, the timeframe to develop and implement the Mandatory Reporting Regime will be informed by responses throughout the consultation process.

As such, the consultation process is anticipated to involve further consultation via a Preferred Option Paper in late 2013, Exposure Draft Legislation in 2014 and ongoing meetings with stakeholders. Introduction of legislation into Parliament is anticipated to occur in late 2014 and provide for a commencement date in 2015.

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REFERENCES

Australian Bureau of Statistics (2001), 5497.0.55.001 - Information Paper: Request to Confidentialise International Trade Data.

Australian Competition and Consumer Commission (2012), Monitoring of the Australian Petroleum Industry – Report of the ACCC into the prices, costs and profits of unleaded petrol in Australia 2012.

Australian Institute of Petroleum, Downstream Petroleum 2011.

Department of Environment and Sustainable Development, ACT Fuel Sales Data Report 2010-11, ACT Government.

Department of Resources, Energy and Tourism (2012), Energy White Paper, Commonwealth of Australia.

Department of Resources, Energy and Tourism (2011), National Energy Security Assessment, Commonwealth of Australia.

Department of Resources, Energy and Tourism (2011), Strategic Framework for Alternative Transport Fuels, Commonwealth of Australia.

International Energy Agency (2012), Energy Policy of IEA Countries: Australia 2012.

UK Department of Energy and Climate Change, Crude oil and petroleum products – methodologynote https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/65736/58-crude-oil-methodology.pdf

US Energy Information Administration (2013), Petroleum Supply Monthly, January 2013.

US Energy Information Administration, Survey Forms http://www.eia.gov/survey/

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APPENDIX 1 – DATA REPORTING AND PUBLICATION CATEGORIES

The Mandatory Reporting Regime will identify particular petroleum data categories that businesses will need to report. Tables A and B summarise the data reporting and publication categories used for the Australian Petroleum Statistics and US Energy Information Agency respectively to meet international reporting requirements (e.g. IEA Monthly Oil Survey).

The Mandatory Reporting Regime may be guided by the data categories from these existing reporting systems.

Table A: Australian Petroleum Statistics data categoriesPublished Categories Reported Categories (PSIMS)

Crude oil

Crude oil & other refinery feedstocksCrude OilCrude oil - localIndigenous Stabilised Crude Oil - excluding condensate (Part A)Crude oil – importedCrude oil and condensate

Condensate CondensateLPG (naturally occurring) LPG (naturally occurring)

Refinery input

Input – totalInput - percentage indigenousRefinery Fuel Used - Natural GasRefinery Fuel Used - Other GasRefinery Fuel Used - OilRefinery Fuel Used - CokeOther refinery feed - localRefinery gasOther refinery feed – importedRefinery gain/loss

Natural Gas Natural GasEthane Ethane

LPG LPGPropaneButaneLPG Autogas - PropaneLPG Autogas - MixLPG ResidentialLPG LeisureLPG ForkliftLPG Commercial & Industrial

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LPG mixturesAUTOGAS - sold to retailers (sales)AUTOGAS - sold to wholesalers (sales)

Automotive Gasoline

Lead replacement petrolLeaded petrol - 96 RONPetrol - other RON leadedProprietary BrandPremium Unleaded Automotive GasolineRegular Unleaded Automotive GasolineEthanol blended Automotive GasolineAutomotive gasolineAutomotive gasoline - of which sales to retailers

Aviation Gasoline Aviation gasoline

Aviation Turbine Fuel

Wide cut jet fuelAviation turbine fuel (MOS)Aviation turbine fuel – domesticAviation turbine fuel – internationalAviation kerosene - domesticAviation kerosene – international

Kerosene KeroseneKerosene - Lighting & Power

Automotive Diesel Oil

Automotive Diesel OilDiesel fuelAutomotive Diesel Oil – InlandAutomotive Diesel Oil – BunkersAutomotive Diesel Oil - of which sales to retailersADO - inland - retailADO - inland – wholesaleADO - inland - otherADO - bunkers – internationalADO - bunkers - coastal

Heating Oil Heating oil

Industrial & Marine Diesel Fuel

Industrial & Marine Diesel FuelIndustrial & Marine Diesel Fuel - inlandIndustrial & Marine Diesel Fuel - bunkersIMDF - InlandIMDF - Bunkers - internationalIMDF - Bunkers - coastalBunker

Fuel Oil Fuel oilFuel oil - inland

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Fuel oil - bunkersFuel oil - bunkers - internationalFuel oil - bunkers - coastalFuel Oil - Low Sulphur (<=1%)Fuel Oil - High Sulphur (>1%)

Lubricating Oils, Greases & Basestocks

SolventsBlended oilsGreases (Incl Petroleum Jelly)Lubricating Oil BasestockGasoline engine oilsDiesel engine oilsAutomotive oilsAutomotive Oils - TransmissionAutomotive Oils - GearAutomotive Oils - Brake FluidsAutomotive Oils - SpecialityAviation OilsMarine Oils - CoastalMarine Oils - InternationalRailway Diesel Engine OilsOther transport oilsIndustrial oilsIndustrial Gear OilsIndustrial HydraulicsIndustrial - Metal WorkingIndustrial - OtherProcess OilsGreasesGreases (Incl Petroleum Jelly)OtherBasestocksOther LubricantsLubricants and greasesLubricating Oil ExtractLubricating oils, greases and basestocks

Bitumen BitumenPetroleum bitumen

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Other Products

Other ProductsOther Products N.E.ILSR / Virgin NaphthaNaphthaOther unfinished productsPetroleum cokeWaxesSulphurPetrochemical Feed - Refinery GasPetrochemical feedstockPetrochemical Feedstock - LPGPetrochemical Feed - NaphthaPetrochemical Feed - ADOPetrochemical Feed - IMDFPetrochemical Feed - Fuel OilPetrochemical Feedstock - OtherBitumen Feedstock ProducedLube Feedstock ProducedSolvent Feedstock ProducedOther Unfinished in RefineriesFCCU FeedstockHydrogenMiscellaneous

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Table B: US Energy Information Agency data categories

Published Categories Reported Categories

Crude Oil

Crude Oil (inc. Lease condensate), TOTAL: - Domestic (incl. Alaskan) - Alaskan - Foreign

Natural Gas Plant Liquids and Liquefied Refinery Gases

Pentanes Plus Pentanes Plus

Liquefied Petroleum Gases: - Ethane/Ethylene - Propane/ Propylene - Normal Butane/ Butylene - Isobutane/ Isobutylene

Ethane/Ethylene, TOTAL: - Ethane - LRG - Ethylene

Propane/ Propylene, TOTAL: - Propane - LRG - PropyleneNormal Butane/ Butylene TOTAL: - Normal Butane - NGPL - Normal Butane - LRG - Butylene

Isobutane/ Isobutylene, TOTAL: - Isobutane - NGPL - Isobutane - LRG - Isobutylene

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Other Liquids

Hydrogen/Oxygenates/Renewables/Other Hydrocarbons: - Hydrogen - Oxygenates (excluding Fuel Ethanol) - Renewable Fuels (including Fuel Ethanol) - Fuel Ethanol - Renewable Fuels Except Fuel Ethanol - Other Hydrocarbons

HydrogenOxygenates (excluding Fuel Ethanol), TOTAL : - Ethyl Tertiary Butyl Ether (ETBE) - Methyl Tertiary Butyl Ether (MTBE) - Other OxygenatesRenewable Fuels, TOTAL: - Fuel Ethanol - Biomass-Based Diesel Fuel - Other Renewable Diesel Fuel - Other Renewable Fuels

Other Hydrocarbons

Unfinished Oils

Unfinished Oils, TOTAL: - Naphthas and Lighter - Kerosene & Light Gas Oils - Heavy Gas Oils - Residuum

Motor Gasoline Blend. Comp. (MGBC) - Reformulated - Conventional

Motor Gasoline Blending Components: - Reformulated Blendstock for Oxygenate Blending (RBOB) - Conventional Blendstock for Oxygenate Blending (CBOB) - Gasoline treated as Blendstock (GTAB) - All other Motor Gasoline Blending Components

Aviation Gasoline Blend. Comp.Aviation Gasoline: - Blending Components

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Finished Petroleum Products

Finished Motor Gasoline: - Reformulated - Conventional

Finished Motor Gasoline: - Reformulated, blended with Fuel Ethanol - Reformulated, Other

Conventional, Blended with Fuel Ethanol - ED55 and Lower - Greater than ED 55 - Conventional Other

Finished Aviation Gasoline

Aviation Gasoline - Finished - Blending Components

Kerosene-Type Jet Fuel

Kerosene Type Jet Fuel, TOTAL - Commercial - Military

Kerosene KeroseneDistillate Fuel Oil: - 15 ppm sulfur and under - Greater than 15 ppm to 500 ppm sulfur - Greater than 500 ppm sulfur

Distillate Fuel Oil, TOTAL: - 15 ppm sulfur and under - Greater than 15 ppm to 500 ppm sulfur - Greater than 500 ppm sulfur

Residual Fuel Oil: - Less than 0.31 percent sulfur - 0.31 to 1.00 percent sulfur - Greater than 1.00 percent sulfur

Residual Fuel Oil, TOTAL: - Less than 0.31 percent sulfur - 0.31 to 1.00 percent sulfur

- Greater than 1.00 percent sulfur

Petrochemical Feedstocks: - Naphtha for Petro. Feed. Use - Other Oils for Petro. Feed. Use

Petrochemical Feedstocks: - Naphtha for Petro. Feed. Use <401 - Other Oils for Petro. Feed. Use > or equal to 401

Special Naphthas Special Naphthas (solvents)

Lubricants

Lubricants, TOTAL: - Naphthenic - Paraffinic

Waxes Wax

Petroleum Coke: - Marketable - Catalyst

Petroleum Coke: - Petroleum Coke, Marketable - Petroleum Coke, Catalyst

Asphalt and Road Oil Asphalt and Road OilStill Gas Still Gas

Miscellaneous ProductsMiscellaneous Products: - Non-fuel use - Fuel Use

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APPENDIX 2 – IEA STOCKHOLDING OBLIGATION

Australia, as an IEA member country, has an obligation to hold oil stock levels that equate to no less than 90 days of net imports. Australia currently holds some 70 - 75 days of net-imports and this position has declined over a number of years (see Figure A).

Australia does not hold government-controlled or regulated industry stocks for drawdown in an emergency, and our capacity for short-term surge production and fuel-switching is limited. Therefore, we rely on commercial stockholding practices of industry and market flexibility to maintain supply during short-term global and domestic supply disruptions. To manage deeper disruptions without activating the LFE Act, we can only participate in an IEA-coordinated emergency response, or collective action, through a combination of market and industry mechanisms and voluntary demand restraint.

Figure A – Australia’s Emergency Reserve History 2009-2012

Australia's Emergency Reserve History 2009-2012 (in equivalent days of net imports)

65

70

75

80

85

90

95

100

105

Jan-0

9

Mar-09

May-0

9Ju

l-09

Sep-09

Nov-09

Jan-1

0

Mar-10

May-1

0Ju

l-10

Sep-10

Nov-10

Jan-1

1

Mar-11

May-1

1Ju

l-11

Sep-11

Nov-11

Jan-1

2

Mar-12

May-1

2

Day

s

Source: DRET. Data Source: IEA Website.

90 day emergency reserve calculation

The IEA minimum stockholding obligation is based on net imports of all oil, including both primary products (such as crude oil, natural gas liquids [NGLs]) and refined products. The obligation specifies several types of stocks that cannot be counted toward the commitment, including military stocks, oil in tankers at sea, in pipelines or at service stations or amounts held by end-consumers that are not controlled by Government (tertiary stocks). It also does not include crude oil not yet produced or naphtha.

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The IEA minimum stockholding obligation is based on the average daily net imports of the previous calendar year. This covers all petroleum, including both primary products35 (such as crude oil and natural gas liquids [NGLs]) and refined products, with the exception of naphtha and volumes of oil used for international marine bunkers. Refined products are converted to crude oil equivalent, the amount of crude necessary to produce a given amount of product.

A country’s 90 day emergency reserve commitment is defined as: daily net imports x 90. Days of net import cover is the result of: emergency reserves ÷ daily net imports.Daily net imports are defined as:

net imports (adjusted for stock changes)36 of primary products, from which is deduc-ted a naphtha yield of 4%37;

plus net imports (adjusted for stock changes) of all refined oil products (excluding naphtha and international marine bunkers, including additives, such as biofuels, which have already been blended into the fuel) converted to crude oil equivalent by multiplying by a factor of 1.065;

divided by the number of days in the year.

Emergency reserves are defined as total oil stocks38 (net any bilateral stockholding arrangements), adjusted in the following way:

a naphtha yield of 4% is deducted from stocks of primary products;

refined oil product stocks (with the exception of stocks of petrochemical naphtha and of international marine bunkers) could be counted as emergency reserves in either of the following ways:

o all existing product stocks, converted to crude oil equivalent by the general IEA factor of 1.065;

o only stocks of the three main product groups (gasoline and naphtha for gas-oline production, middle distillates and heavy fuel oil) which are converted to crude oil equivalent by an average factor of 1.239.

a 10% deduction is made in order to account for unavailable stocks (such as tank bottoms).

35 “Primary products” consists of crude oil, NGLs, refinery feedstocks, additive/oxygenates (in-cluding biofuels) and other hydrocarbons (such as synthetic crude oil from oil sands).36 Net imports are adjusted for stock change such that increases of stocks in a given year are not counted as part of the daily net imports amount, while stock reductions in a given year are added to the daily net import figure. Thus, oil imported for the purpose of building emergency reserves does not add to the emergency reserve commitment.37 For most IEA countries, a 4% deduction is made to reflect a naphtha yield, based on a weighted average across the IEA. Countries for which the national yield is above 7% may opt to use their actual national naphtha yield factors or volume to adjust their net imports.38 “Total oil stocks” include stocks of additives such as biofuels which are destined for blending with fuels or for fuel use.39 This factor is used to convert an aggregate of the three main products into an amount of crude oil required in average refinery operations to produce those products. The use of this factor as-sumes that products, other than the three main products and naphtha, are stocked in proportion to their refinery yield.

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