Australian Ethanol said despite significant environmental, economic and political changes in global attitudes towards biofuels – particularly in recent years – the Australian Government’s biofuels production target of 350 million litres per annum had not been reviewed since 2001.
The Australian Government says it has spent more than $A430 million in supporting the biofuels industry, but Australian Ethanol chief executive Peter Anderton said government spending hadn’t resulted in a single new ethanol facility.
“The only ethanol plant that’s being built in Australia at the moment is ours – we’ve begun construction – and we haven’t received a cent in assistance from the government,” Anderton said.
“There hasn’t been a new ethanol plant built in Australia for twenty years … there’s a new plant announced every week in the United States.”
The company is at present focussed on ethanol production within Australia, although it does have biodiesel interests in the United States. As a result, the company is not affected by the new fuel legislation.
But the company said that the Federal Government’s attitudes to biofuels were inconsistent, and the federal target of 350 million litres per annum of biofuels production had not been reviewed since it was first proposed in 2001.
Anderton said he recently attended a biofuels workshop in Canberra, where government figures indicated that for the financial year just ended, Australian ethanol production peaked at around 37 million litres.
The ‘05/06 ethanol production figures are less than half that of three or four years ago, despite the government’s expensive efforts, according to Anderton, who said the industry had not yet recovered from the negative media reports claiming ethanol could damage engines.
Biodiesel has had more success in terms of new plant developments, but these are precisely the businesses that will be impacted most by the new Australian fuel tax legislation.
Yesterday evening, Anderton offered his opinion on these apparent inconsistencies.
“Do you want a frank answer? The government should be honest with the people and tell them what deals have been done with the oil companies and the energy sector. This is all about what’s happening behind the scenes,” he said.
Australian Ethanol’s US investments have put the company in a position where it will be able to fund its Australian activities through its involvement in one of the fastest growing biofuels markets in the world, an industry publicly endorsed by President George Bush.
Anderton said that the US push for energy security had resulted in bipartisan support for the biofuels industry, noting the recent Democrat/Republican Bill suggesting tax concessions offered to biofuels production should be made permanent.
“The situation in the US Midwest will change government – its an issue that’s going to get bipartisan support every time, providing it is fundable and in line with overall policy … that’s the mood in the US, driven by the President,” Anderton said.
In Anderton’s opinion, ethanol consumption in the US could increase to up to 20% of total fuel consumption by the 2008 Presidential election, as ethanol had proven to be popular with voters, enjoying the support of both industry and environmentalists.
“Over here, the Government does enough talking and placating people, but their heart’s not in it. There’s probably no votes in it in Australia, because energy security is not an issue,” he said.
Anderton noted that two out of three of Australia’s top exports are direct energy products, coal and gas, rounded out by aluminium, which is sometimes referred to as “solid electricity” due to the amount of energy used in its production.
Thus, the Australian economy is inextricably linked to the international energy industry, while the country remains largely dependent on off-shore refiners for transport fuels.
“The government will always bow down and fall in line with the energy industry – if you wake up tomorrow and there was no fuel in the fuel stations, whose fault would it be? It wouldn’t be because BP or Shell has messed up – it’d be a government issue,” Anderton said.
If, as Anderton suggests, the energy industry has the Australian Government over a barrel, why does his company persist in the development of an Australian ethanol industry?
The answer is: the price of the barrel.
“Sooner or later, someone’s going to turn the lights on,” Anderton said.
“When energy gets to $100 or $120 bucks a barrel, the lights will go on … That’s what we’re banking on, and we have the support of our shareholders to do that.”
