Security of Northern Australia: David Johnston Speech
11/11/11
Speech to the Submarine Institute of Australia Annual Conference
Adelaide, 9 November 2011
Thank you Peter - Peter Horobin and your team - thank you for inviting me today. This is a not-to-be-missed event for anybody interested in - firstly national security - but also in our submarine capability.
To Rear Admiral Lloyd, can I thank you for coming so far to present a most magnificent paper.It was the talk of us all during lunch and recess, and it’s good to know that people have been where we have to go - doing the hard things that we have to do - and that we can learn the lessons from you.I think it was a very valuable presentation.
To Rear Admiral Moffitt and Air Vice-Marshal Deeble, I am sure ladies and gentlemen you all acknowledge those two seats are the hottest seats in our Defence Force at the moment.
The new submarine capability is by far and away the biggest project we will ever undertake, because once we have successfully completed it, everything else will pale into insignificance I hope.Of course Air Vice-Marshal is dealing with what is just an absolute handful, and I think that that last presentation shows you that we are in very good hands in his management of what is a tremendously difficult problem.
Having said that, I notice I was billed to talk about the Coalition’s future submarine policy. I will not be talking about that, but the main point is that in opposition we are dripping in ignorance.There are so many important facets, cost factors, capability issues, ITARS issues, FMS issues, etc. etc. etc., that from Opposition it would be ridiculous - it would be an insult to your intelligence - for me to start to pontificate on what on earth Rowan’s going to come up with and what the Minister is going to sign off on.
But I have one little piece of advice. Today we have heard a lot about capability and I love capability, we all do. But remember: the first hurdle is that someone like me has to take it to the Prime Minister, with all of their advisors, and convince them to say ‘Yes’. Together we then have to take it to the National Security Committee. We then have to take it to Cabinet. The problem we have at the moment is that - and this is one way the Minister has described it to me - the file is just too dangerous to even open.
We never put any money in this. When we talked about the prescription in the White Paper - we had to then take the next step and say ‘here is what it will cost’, and start ploughing the ground so that we had a saleable product.
But enough of that because I think you all know the end result of a successful capability sign off on our First and Second Pass Approvals, or whatever we choose to do with respect to this particular capability.
Look, the thing that I wanted to talk about briefly today is the changing and rapidly changing nature of our environment and where we sit currently, as of today, with what is going on out there.As one of the final speakers today, I think it’s important to acknowledge that this meeting is about our national security, and look at our disposition in the region.The last five years stand out as extremely significant as a sign post for our future economic prosperity and security.
In gas, in coal and in minerals Australia has been the beneficiary of a really quite voracious increase in demand and an increase in price.These economic developments are in light of one obvious fact, and that is all of this activity in capital investment, in jobs, in taxation revenue, in economic development, is predicated entirely upon maritime security.
Without maritime security we have nothing.Three strategically placed terrorist acts and we are in a lot of trouble if you think about it, and I want to talk to you about why that is.As a Western Australian I can say we are very focused on these issues. Our energy resource production, primarily LNG, has become one of the cornerstones of our economy and is set to become its foundation.
Our good friend and trading partner Japan continues to be our biggest consumer with twelve million tonnes each year.
China is next with just under four million tonnes, and that is at 2009 figures.The crucial issue for all of us is the amount of growth in the Chinese consumption of LNG.Woodside first signed their deal in 2002 for three-point-three million tonnes.
Today, we have contracts on the table - we are not supplying it yet - we have contracts on the table to supply sixteen million tonnes per annum to China.
Australia is the largest supplier to China, who by 2020 will be importing forty to fifty million tonnes of LNG.Australia's LNG will be ten per cent of China's total energy consumption by 2020.Now, if you think about it, that it puts us in an extraordinarily unique position.
The Gorgon Project, which is just about to get started, is 130 kilometres offshore - off the north west coast - in about 250 metres of water.
The process of reducing gas to minus 61 degrees Celsius - that is to liquefy it - is carried out on Barrow Island, and it will be exported out of a jetty that is some 4 kilometres long.There are forty trillion cubic feet of gas in the Gorgon Project.Now that’s in a context that not many of us here would understand, so if I may, let me tell you that for a city of one million people that amount of gas will power that city for 800 years.
Now the Wheatstone field is adjacent to Gorgon, in 230 metres of water and has thirty-five trillion cubic feet of gas.Browse is 400 kilometres off the Kimberley coast from Broome - due north virtually - and has three times the reserve of Gorgon. Now, I haven’t mentioned the existing producing wells of Rankin, Goodwin, etc., or the new projects that are signed off on Pluto and Sunrise.But as you can see, in terms of gas into East Asia and to the rest of the world, we have a significant contribution to make, and I haven’t even talked about coal seam gas from Queensland, which is also of similar magnitude.
Our domestic consumption of all of this energy resource is something less than 10% of our reserves. When I turn to coal we’ve got 500 million tonnes that we mine every year. We have over 100 years capacity left and that’s simply because we got sick and tired of digging it up.
In 2008 and 2009 we exported 230 million tonnes to Asia - that’s black coal - Japan receiving half of that. Total export was 252 - and this last year 2010 - 298 million tonnes for forty-three billion dollars of income, second only 49 billion dollars of iron ore income.
We lead the world in the size of our mineral reserves with respect to brown coal, lead, nickel, tantalum - a strategic mineral that is very very important to everything we do in aerospace - uranium - we all know how important that is – and zinc.We are second in the world’s reserves of bauxite, copper, gold and silver.We are fifth in terms of iron ore, but it is our biggest export earner.
Now, the reason I talk about resources should be obvious, and we are now going to move through what our neighbours are doing about protecting their resources, and their dependence upon our resources.
The one defining fact that almost all of our significant trading partners have in common is that they are very very dependant upon the reliability of supply of those main commodities that we give them, a supply which is entirely by sea.
The other point to be made is that many of our trading partners are in strategic competition Japan, China, South Korea, Malaysia, Singapore, India, Pakistan, etc.
We have effectively and efficiently developed great export markets for our resources, a tremendous infrastructure that goes to support them, but with all of this success there is a massive responsibility to protect and secure what we build and what we convey.
Our neighbours are doing it. As you know, China has a rapidly expanding naval presence, particularly into the India Ocean. Their large naval base at Sanya on Hainan Island and their facilities in Gwadar are well placed for excursions into the Indian Ocean.
They have deployed their Jin class submarine, a ballistic capable submarine with a weapon with an 8,000 kilometre range.
They have established a strategy of diplomatic relationships and bases across the North India Ocean, which have been described as its ‘String of Pearls’ strategy.The strategy seeks to establish bases, or potential for bases, and electronic intelligence gathering facilities in Pakistan, Burma, and Cambodia. The Gwadar port in Pakistan is particularly significant.
One of the most obvious reasons for all of this is that 80% of China's oil comes through the Strait of Malacca.
China is also building or funding container ports in Bangladesh and Sri Lanka, and has recently undertaken significant activity in the Maldives.
The problem we have here is that India has 14 consulates in Afghanistan, Pakistan is very very nervous about that.So they welcome with open arms the Chinese into Pakistan.Their navy is not comparable with the Indian Navy, but with the Chinese on side there is some balancing up of the power in the North Indian Ocean.
So, as a response we see India firing up their acquisitions. Accordingly they have commenced construction of six French Scorpène class submarines, and are seeking the costings for a further six. Their Arihant class of nuclear powered ballistic missile submarines hit the water on the 26th of July 2009, and they are planning a further five, that was the first of the class.
Malaysia has recently acquired two French Scorpène class, with their Black Shark torpedos and their Exocet SM39 anti-ship missiles.The training of some 150 Malaysians at Brest in France was a vital part of the program. The first submarine arrived at Port Klang in September 2009.
Singapore, as we all know, used to field the older Challenger class, but they’ve got the two new, former Västergötland class, Archer class boats that are AIP equipped and with better sonar, weapons, and other capabilities.
Indonesia is interestingly enough purchasing two Type 209’s from South Korea.The issue has clearly been the South China Sea for Indonesia, with territorial disputation up there. That threat has focused their attention on submarines, and the South Koreans are obliging.
Perhaps the two most significant players in regard to subsurface capabilities in our region are Japan and South Korea.
Japan firstly, with its eleven Oyashio class, and then the movement to their magnificent Sōryū class which we saw something of previously today.The Sōryū is 4000 plus submerged tonnes, eighty-four metre long vessel, with an 11,000 kilometre range with AIP, and with the new highly efficient diesel motors a surface speed of of 13 knots and a submerged speed in excess of 20 knots.Three have been commissioned, a further four are planned with two of them having been laid down.
A very good model, if I may say so, is the South Korean program, having by license undertaken a three phase acquisition: firstly the Chang Bogo class based on the highly successful Type 209 German submarine, they have nine of those;Phase Two is nine, 1800 tonne platforms based on the latest German Type 214 design with AIP’s;The Third Phase is nine, 3000 tonne submarines built in South Korea with indigenous technology, not under license.
So South Korea have made the jump - if we can say - to hyperspace; having gone from license to license, to now building their own submarine, Daewoo and Hyundai are very impressive organisations.
That’s the neighbourhood. A neighbourhood categorised by territorial disputation, nervousness, uncertainty, and respect for trade routes and the vulnerability that they each have, particularly with respect to energy.
Now anyone who thinks that we can stand back and spectate, having provided most of the resources that these people rely on and are seeking to protect, is foolish in the extreme.
There is clearly a need for us to be ahead of this game. In many respects the growth rate of over nine or ten per cent justifies some force projection capability. Many of our neighbours have similar growth rates.
So where is Australia in all of this?Our Collins Class as we know is problematic. I’ll say no more about it, because I think we are on the road back, I trust we are.
Our replacement submarine is problematic because we announced it three years ago and then we have done very little to support it financially or with resources generally.So we know that time is a significant enemy here, and we have our best people grappling with these issues.
In closing I want to say that, if we learn nothing else, we should learn that the neighbourhood is a pretty smart group of individuals who can clearly identify the way to respond to threats. They are all going for high quality submarines. There is a submarine race unfolding as we sit here today.
Now, the new submarine project is really important. The fundamental issue that I think I should be saying to you all today is let's get the hell on with it. Let's put some money on the table - a couple of hundred million - so that Rowan Moffitt and his team can actually bring together the people that we have heard are necessary from Rear Admiral Lloyd, and start putting some feathers on these wings so that we can fly somewhere, because time is killing us.
2028 is a very spooky number that I have heard this morning, because these proposed boats I don’t think are going to see much action between now and then unless we really spend a lot of dollars. That means land based testing facilities, and all the things that most of us know about and have heard about, that cost hundreds of millions of dollars.So having said that I believe the Minister is going to say or do something soon. Let's discover that, let's hope so.
In closing I want to compliment the Minister on his Force Posture Review, the Review speaks to the need of energy security, and more broadly deals with many of the issues I have mentioned.But it is not enough to have a review. Cheques have to be written. Money must be put on the table. Governments must commit. We’ve had a pretty inauspicious commencement with respect to the 2009 White Paper, with not a lot of funding.
The last budget we had ten second passes in twenty-four months. This is not good. Bear in mind the White Paper was following the Global Financial Crisis, everybody should have known that resources would be scarce.
So having said that our neighbours have charted our course for us, which I think they really have, I leave you with the simple proposition, the imperative is clear: We really do need to get on with this and start providing the responsible protection that all of this investment and activity demands.
I thank you.