Hazard by ERPG
Hazard by IMO
Products & uses
|Why ACTED?||Economic commentary||Products||Overview||Key recommendations|
UP to 15 firefighters who battled the 1991 Coode Island chemical disaster are suffering from cancer including lung disease. Four more have taken their own lives in what has been described as a 15-year time bomb.
September 2001 (From the Financial Review 24 August 2001)
Huntsman Chemical Co of Australia is seeking urgent assurances from the operator of Melbourne's Coode Island hazardous liquids facility. This follows a July 31 decision by Huntsman, Dow Chemical Australia and the State Government to take the Coode Island monopoly away from Terminals Pty Ltd, owned by Burns Philp, and award three-fifths of the work to a New Zealand rival, Marstel Terminals. A week later, Terminals suspended capital spending and withdrew its tanks for benzene, from service. Huntsman had to divert two shiploads of benzene to Sydney at a cost of half a million dollars. The problem could escalate next year because Terminals plans to evict Huntsman and Dow, which stores propylene oxide at the site to make foam, in June, and Marstel's new facility will not be ready until the first or second quarter of 2003, up to a year later. Dow lost $10 million last year, while Huntsman, which brings in two or three shiploads of benzene a month for its $250 million styrene packaging business, is also struggling.
NOTE: In June 1997, the Victorian Government announced it was abandoning plans to relocate the facility. It has represented a great deal of wasted effort on the part of government, industry and the public. We have no position other than to say that we are not against the facility - it's simply that the NEED FOR IT HAD NOT BEEN PROVEN.
Background and not updated
The case for Point Lillias has first to be proven and then prioritised against other public funding activities that could help the petrochemical industry in Victoria. Victorian's looking at why Bass Strait gas (very cheap for many years) failed to stimulate any industry providing only cheap petrol (or government revenue and supernormal profits for some), may find my introduction to a guest speaker on the North West Shelf gas development of interest.
Canberra's stand on this could have ramifications on a raft of other national interest issues. We will comment on these later.
We hope the analysis provided with our compliments is of help. Feedback is always welcomed.
1. Safety need - to reduce risks to persons and the environment
2. Economics need - to help the competitiveness of industry (and Victoria).
When broken down by product, the profile is summarised in the following graph.
It shows that only 40 per cent of storage (about the same for throughput), is for products more hazardous than petrol.
The products have been considered as a pollution risk in the report's table 17.4 using the International Maritime Organisation ranking.
The graph shows an even lower proportion - less than one-fifth of products are more hazardous than petrol in the event of a spill.
The point about petrol is that according to the report, ten-times more petroleum is moved through the Port of Geelong than the products proposed for the HCF - and most are less hazardous!
One would have to conclude the need to separately store the majority of chemicals has not been shown.
1. As shown later, the chemical industry served is NOT fundamentally integrated with the rest of the chemical industry as implied. The more hazardous chemicals for the HCF are but ONE link in the process chain.
The next step has...
|low real value added;|
|few employees (less than 500); and|
|safer products than those imported through the HCF.|
|their end products have no export potential;|
|often adds costs to end users (import tariff, though phasing to 5 per cent, and anti-dumping legislation effect);|
|for just four mature companies; and|
|without quantified benefit to Victoria!|
Worksafe Australia has always ranked elimination as the first consideration in the hierarchy of control measures to minimise risk. The case for elimination by substitution with next stage chemicals is clearly strong especially when the following is considered for applications of the products.
It summarises that:
This table is relevant.
It is again clear that:
|The products are only one part of the process chain;|
|The next step is cost inflated by import tariffs and anti-dumping legislation (consequent by-law entry would result in cost reductions to users); and|
|The next step results in safer products.|
It shows clearly that one-half the products, and nearly all the more hazardous forms, are for just a few users.
As the reports present themselves...
|Elimination of some of HCF imported products would.....|
|In any event as presented, the majority of products could be broadly handled like petroleum.|
|If the products are eliminated, any loss to user industries should be evaluated against....|
|The HCF is for products at one step in a succession of process steps. The step selection by industry is a legacy of Australia's protectionist era (most recent investment, benzene to styrene, was 1976 when the import tariff was 30 per cent, five-times higher than present).|
|For the next (ie. alternative point of import) process step, employment is less than 500 and.....|
|The next process step for all hazardous products is considered by ACTED to add no net economic value and could in most cases be undertaken more cheaply overseas. This because...|
|Cessation of their processing enables withdrawal of cost inflating import tariffs and anti-dumping protection.|
|Cessation of manufacture is provisionally estimated by ACTED to help national gross product (and possibly gross state product of Victoria).|
The HCF could still go ahead because....
|For the Government of Victoria:|
|Their contribution to the cost of $37m is politically cheap to move chemicals from Melbourne to a less influential region.|
|Will obtain a subsidy for their facility. (It could even be purchased later at discount if one or more of the current users of products for the HCF follows the trend of industry rationalisation that would test the viability of the owner operators).|
For short term political reasons and because the cost is dispersed,
the elimination option is likely to be rejected (even though some of the
next step activities have doubtful outlooks).
The current debate about the HCF is costly and distracts from core issues.
2. SAFETY - NO substantial case shown to differentiate the bulk
of the 270,000 tonnes of products from 2.5 million tonnes of petroleum
exported through Geelong.
It may in the end prove necessary to move some products through the Port
of Geelong or an HCF facility may yet be proven necessary. An objective
analysis of long term needs will show the alternatives. The requirements
for the near future may be very different than presently being considered.
We do believe.....
The relative decline in Victoria's chemical industry can be arrested. If
facilitated, the intellect core in Victoria could help shape a robust internationally
competitive industry to return it to its status of the 1970's.
Therefore considering the two needs
1. ECONOMIC - the case for the subsidy for a few companies has NOT
been shown: and
The current debate about the HCF is costly and distracts from core issues.
2. SAFETY - NO substantial case shown to differentiate the bulk of the 270,000 tonnes of products from 2.5 million tonnes of petroleum exported through Geelong.
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