The latest conflict in the Persian Gulf has exposed just how vulnerable Australia is to disruptions in global energy supplies, particularly diesel.
This briefing paper examines the potential for freight rail to reduce Australia’s exposure to future energy shocks, quantifying the energy savings available from shifting future freight growth onto rail.
It shows that rail freight is around 10 times more energy efficient than road transport per tonne-kilometre, and that directing just the next 10% of freight growth to rail rather than road could save over 2 billion litres of diesel per year, worth billions of dollars and equivalent to 23 additional days of national fuel supply.
While road transport remains the best option for many freight tasks, including short-range and ‘last mile’ delivery, Toner and Stanford argue that Australia’s chronic underinvestment in rail infrastructure, combined with hidden subsidies for road transport, has left the freight rail network underutilised despite its efficiency and security advantages.
Finally, Toner and Stanford respond to the federal government’s recent decision to suspend the northern leg of the Inland Rail project, arguing this move will deepen Australia’s reliance on road freight and diesel imports at exactly the wrong moment.