New Australian Refinery Plan To Ease Fuel Crisis

Common sense says refineries process oil, not make it, so more Australian refining capacity would be useless in the current oil shortage.  But common sense isn’t always right.  Here’s how the federal government’s New Australian Refinery Plan will help the nation power through the fuel crisis.

On Saturday, January 28, 2026, the United States attacked Iran.  This has made a lot of people very angry and been widely regarded as a bad move.  And not only in Iran.  This is because, in response, the Strait of Hormuz was closed.  Despite regional pipelines going all out and Iran allowing some tankers through, it has reduced world oil supply by around 10%.  While good news for EV sales, it’s a disaster for the world economy.

Many regard Donald Trump’s attack on Iran as a terrible blunder, but before we condemn him, I think it’s only fair to consider how much pressure the American President is under.  Think about how you’d feel if you were falsely accused of horrible crimes.  Now imagine how much worse it would be if you knew you were 100% guilty.

Here in Australia, some have come close to panic over the fear we’ll run out of fuel.  Fortunately, that won’t happen.  A lot of the concern has revolved around our lack of oil refining capacity.  Politicians calling for more on-shore refining capacity have been widely sledged because refineries only process oil; they don’t make it.  But this isn’t entirely true, and is why the federal government is launching the New Australian Refinery Plan (NARP) to improve access to petroleum products.

There Will Be Fuel, But It Won’t Be Cheap

Lately, many have made themselves miserable by larping online as logistics experts and convincing themselves we’re running out of fuel.  But that’s not on the cards.  We have a whole heap of cards in this situation, and it’s not on any of them.

The three main reasons why Australia will have no problem maintaining a supply of fuel from overseas are:

1. World oil supply is down by around 10%. While enough to have severe economic effects, 10% less is nowhere close to running out.
2. Australians are in the world’s richest 5%.  So long as we’re willing to pay current high prices, we can afford to bid supply away from poorer nations. Basically, 10 people in the Philippines will leave their scooters at home and walk so one Australian can drive an SUV.
3. Australia is the world’s 3rd largest exporter of energy.  We export 6-7 times more than we import.  No one is going to intentionally piss off the country that supplies a large chunk of the world’s energy during an energy crisis by withholding petroleum products.  Liquid Natural Gas (LNG) prices are currently through the roof, and Australia is the world’s second largest exporter.  Because LNG is so expensive, coal prices are up, and Australia is also the second largest exporter of that.  Finally, we produce petroleum equal to 30% of our own consumption, and we’re not about to send that to an overseas refiner in return for nothing.

Despite the poor average fuel efficiency of Australian passenger vehicles and our heavy reliance on diesel, Australia is in a better position to weather this crisis than any other developed country.  And that’s a lead we’ll maintain until the US gets a new President.  (An event that will also put Canada in front of us.)  But this doesn’t mean fuel prices won’t be sky high, or there will be no temporary disruptions, or no rotten economic consequences.  It also doesn’t mean things can’t get worse.

Some are certain the situation is doomed to deteriorate because Trump is not the very stable genius he makes himself out to be.  Personally, I’ve known isotopes with 160 neutrons that are more stable than he is.  Saying the President is unhinged is an understatement, because the last time his hinges were seen, they were exiting the solar system at high velocity.  But if you point out to his supporters that the Emperor has no sanity, they simply say that because hinges require oil, being unhinged is a conservation method.

This shows fuel prices in regional Queensland are sky high. And if I’d gotten there a little earlier, they would have been moon high.

Australia’s New Refinery Plan

Over the past month, the fact that Australia only refines 20% of the fuel we use has been a point of contention.  But it’s not strange because our crude oil production is only equal to 30% of our consumption, and the blends we produce don’t match our consumption profile.  Also, while there have been disruptions in refinery production resulting from the world’s oil supply falling 10%, we’ve only effectively lost around 3.2% of refining capacity. This means the world can now refine more oil than it has available.   So even if Australia had additional capacity, it wouldn’t help, as refineries only process oil and don’t create it.

Or at least, that’s what you’d think.  There are actually good reasons why the right sort of refining capacity can help Australia tackle the oil shortfall and ensure the supply of petrol that most private vehicles burn, as well as the diesel that agriculture and industry rely on.  This is why the government announced the NARP, which will result in a complete reorganisation of Victoria’s Geelong refinery.  This will increase its output, and the upgrade is expected to be fully online within three months.  In time to help meet demand and lower prices when the fuel excise reduction that starts today comes to an end.

The improved output will result from a four stage process.

Stage 1:  Refinery Gain

If you put 100 litres of crude oil through a refinery, you won’t get 100 litres of petrol, diesel, and potentially other fuels at the end.  While it will depend on the refinery and the type of black goop you’ve poured into it, in general, you can expect to get about 106.5 litres out.  This increase in volume is called refinery gain and results from longer hydrocarbon molecules being broken into smaller ones.  The weight stays the same, but it takes up more space.

If you have a mischievous bent, you may be wondering, “Can the fuel be put through the refinery several more times, causing it to increase in volume with each pass through?”  The answer to that is… yes it can.  That’s exactly what the NARP refinery reorganisation is designed to do.  However, there are some constraints that apply, and it’s not a matter of simply running it through the same process again.

Stage 2:  Green Hydrogen

Australia has a considerable number of hydrogen electrolysers left over from various harebrained hydrogen schemes.  South Australia has several.  There’s one that was used to add trace amounts of hydrogen to domestic gas at Tonsley, and several more left over from an abandoned plan to build a hydrogen power station.  All of Australia’s disused electrolysers are currently on their way to Geelong, where they will be used to hydrogenate refinery products, increasing both volume and energy content.

The electrolysers have a planned capacity factor of around 50% and will mainly run when renewable generation is high.  While the electricity they consume won’t be completely green, it will be greenish.

Stage 3:  Low Pressure Atmospheric Treatment

In the third stage, the hydrogenated fuel is forced into a flash chamber where it’s mixed with air at low pressure.  This allows atmospheric oxygen to combine with the fuel, increasing both its mass and volume, effectively making fuel from thin air.

Because times are tough, I sold the antique lighter my grandfather gave me for $200. After I handed it over, the buyer immediately emptied it into his car and threw the lighter in the gutter.

Stage 4:  Blockchains To The Rescue

If you’re familiar with chemistry, you’ll know that simply oxygenating the fuel won’t increase its energy content.  But this is where blockchains come to the rescue.  You may have noticed blockchains have faded from public view over the past couple of years.  This is because so many companies promoting them have either gone bust or been charged with fraud.  However, their blockchains are still around, with both defunct ones and those confiscated for legal reasons going into the government’s blockchain repository.  As part of the response to the Trump energy crisis, the contents of the repository have been made available to the Geelong refinery.

Blockchains can contain a lot of energy.  On average, one bitcoin represents around 35,000kWh, but a recent one from 2025 has an energy value of roughly 840,000kWh.  The blockchain energy is delivered to the fuel through pulsed fibreoptic cables.  The digital energy is mostly transmitted in base 4 to energise carbon atoms’ 4 valence electrons, but binary is also used to energise hydrogen, and base 6 for oxygen.

Only A Fool Wouldn’t Double Their Fuel

And there you have it — using this four stage process, the Geelong refinery will roughly double its fuel output and produce an estimated 207 litres of fuel for every 100 litres of crude oil.  Of course, this extra fuel doesn’t appear by magic, but through hydrogenation, thin air production, and the addition of blockchains.  Although I guess blockchains are magical, as curses are a type of magic.

The doubling of fuel production that can result from a properly organised oil refinery goes to show that the people and politicians currently calling for Australia to build expensive new refining capacity, at the exact point in time that Donald Trump is running the world’s largest and deadliest advertising campaign for EVs, are not idiots.  They are people intelligently seizing an opportunity for Australia to take control of its fuel.  Not just petrol, but all the fuels our country requires, including diesel and those used for aviation.  Having independent control of these fuels is of such national importance that I’m certain today will forever be known as April Fuels Day.