SABRA LANE: The Federal Government is negotiating with the United States about tapping into America's huge petroleum reserve to guarantee Australia's own fuel security. Australia as a member of the International Energy Agency is supposed to store enough stockpiles of crude oil and petrol to last 90 days, but it hasn't met that benchmark since 2012. There are concerns if there is a major crisis in the Middle East, for example, and supplies are cut that Australia would have only a contingency of about 28 days' supply. The Energy Minister Angus Taylor says he started talks with the United States about how Australia might access its reserve. He joined me earlier. Angus Taylor good morning - you're in discussions to access the US strategic oil reserve. How soon could you have an agreement in place?

ANGUS TAYLOR: We’re working with them as quickly as possible. Look, this is an important reform. We have been reviewing our strategic oil position. We have two particular initiatives we're focused on right now as the review continues. The first is establishing a strategic oil reserve with the United States and the second is modernising the IEA mechanism for counting stocks, and in particular to include stocks on water which is, you know, this is a treaty that was established in the 1970s. It's outdated in the way it works and we think it's appropriate that oil on water be included as part of the strategic stockholding, but the initiative with the United States is also an important one, and one that is timely.

SABRA LANE:The US strategic oil reserve, how much could this cost taxpayers?

ANGUS TAYLOR: Well, the whole point of this is to minimise cost. I mean, what we don't want to do is establish a physical reserve at very high cost in Australia and pass that on to consumers at the bowser. You know, we've seen that initiative put forward by Labor at the last election, we are not going to go down that route because it would be very, very, very expensive.

SABRA LANE: Alright.

ANGUS TAYLOR: This alternative is one that we think can be not only effective but also efficient in the cost to the taxpayer and to Australians.

SABRA LANE: How quickly would Australia be able to access that stockpile, given that the US might actually need to call upon its own reserves in times of crisis?

ANGUS TAYLOR:  It can be accessed quickly. I mean one of the great advantages of the United States is-

SABRA LANE: How quickly?

ANGUS TAYLOR: Well, look, we see oil coming from the west coast of the US in around 20 days. That's the typical sort of time period. If it was to come from Rotterdam it is significantly more than that, closer to 40 days. That's one of the great advantages of the US. They also happen to be an important strategic ally of ours, and so that's why this is an agreement that is worth pursuing. I had discussions with the Americans when I was in Japan recently for the G20 and we'll continue on with those discussions.

SABRA LANE: Just on the fact that the US, you've said, is a strategic ally - this development on fuel security is happening as the US has floated this idea of missiles potentially being deployed in northern Australia to deter China. Many Australians will be deeply uncomfortable about that.

ANGUS TAYLOR: Well look, you know, that's not something that I'm going to spend, I'm going to talk about today on this interview. It's really for the Defence Minister.

SABRA LANE: But what are your views on that?

ANGUS TAYLOR: My view is that the relationship with the United States is a crucial one, Sabra. It is very, very important. You know, we've seen in the last couple of days how strong that relationship is. It's strategically important, it's economically important, but you know, from my part as the Energy Minister-

SABRA LANE: But missiles being deployed in Australian territory is taking it to a whole different level.

ANGUS TAYLOR: Well again, I'm not going to comment on issues that are not part of my portfolio. My focus here is on a strategic oil reserve, is on making sure that we're compliant with the IEA mechanism and is on making sure that we are able to deal with disruptions in our oil supply chain which happen from time to time, and Australians need to know and be confident that we have the oil necessary to keep our economy going, to keep prices down and to make sure those hardworking families and small businesses and industry right across Australia are in a position to continue to function despite those disruptions.

SABRA LANE: You've requested a new parliamentary inquiry into nuclear power, why?

ANGUS TAYLOR: Well, Sabra, over the long term, it is clear we need access to baseload generation that is low emissions, affordable and can continue to support industry and ensure that we have affordable power for households and small businesses. Now there are many different technologies emerging that can play that role, we're doing an enormous amount of work on hydrogen right now and the role that hydrogen could play as that source of energy. We have a moratorium on nuclear, there is absolutely no plan to change that moratorium, but over the long term, we need to look at these alternative technologies and that's why we're doing this. The important thing I'd say, Sabra-

SABRA LANE: I was going to say Ziggy Switkowski though who last led a review for John Howard on this says that the window on gigawatt scale nuclear power has closed in Australia. Is this a pointless exercise given that?

ANGUS TAYLOR: Well technology is changing and the technology that's emerging is not gigawatt power, it is actually small modular reactors. The important point here is that the technology in this area, as with hydrogen and lithium, other baseload sources of power is changing dramatically, at a very fast pace, Sabra, and we need to understand it. Now, I don't have all the answers, you know, I know this industry reasonably well, but I don't have all the answers. It's unfortunate that Labor has reacted the way it has so quickly when it clearly doesn't have all the answers when this technology is evolving and changing quickly. But let's be clear here-

SABRA LANE:  The cost could be somewhere between $5-$10 billion a plant and take up to 15 years to build. Renewables now are much cheaper.

ANGUS TAYLOR:  Well look, small modular reactors are very different from traditional nuclear power stations and this is the point - this is why this review is timely because the technology has changed. But let's be very clear here, the whole point of this committee is actually to work through these issues. These are important questions. I mean, what are the relative costs, and there's different points of view, and we know with small modular reactors, those costs are changing quickly. The important point is the Australian people expect us as a Parliament and as a Government to work through tough issues, finding affordable, sustainable, reliable baseload power for the future, in the decades ahead is an important role as Government and Parliament and that's why I have asked for this inquiry.

SABRA LANE: Angus Taylor, thanks for talking to AM this morning.

ANGUS TAYLOR: Thanks Sabra.

SABRA LANE: That's the Energy Minister, Angus Taylor.