Energy Efficiency

Recently (in the SMH) Barry O’Farrell (NSW Premier) said his government will back the ethanol mandate, under which oil companies must ensure 6% of their fuel sold is ethanol, because it provides regional jobs, fuel security and environmental benefits.

Quite rightly, the oil companies oppose the decision of an ethanol mandate, yet Mr O’Farrell said ‘they can go hang; this government, the last government and the Parliament has supported that ethanol mandate’. But on what grounds?

I could agree with the regional jobs, but they would number no more than 30 to 40 people. As to fuel security, well Australia is extremely vulnerable and almost totally dependent on overseas oil, but why use it to grow crops that – after expensive energy intensive manufacturing process and additional transports costs – can at best can only go to 10% (otherwise millions of cars will be adversely affected)?

Put simply … you start with 100 units of energy (oil, electricity etc) and end up with about 50 units of – ethanol – energy.

And finally the biggest lie of them all, the use of the magic ‘environmental benefits’ … what a crock of political excrement. The whole gambit of ethanol pollutes; sure, we got rid of leaded petrol, but ethanol has no place and should not be touted as a saviour, providing either fuel security or bettering the environment … but perhaps the jobs is accurate, as the number of breathing difficulties and poor health escalate with the use of ethanol.

NSW is in favour of a 10 % ethanol blend even thought USA EPA standards set a cap of 6% mix, as higher concentrations made the fumes more toxic than unleaded. Even though the ban comes into force on July 1 (legislated in 2007) and some research indicates nearly a million motorists would pay more than $150 a year extra (as their cars are incompatible with E10), one could suggest the prospective political donations would be well worth the flack.

There is a suggestion that a leak from Cabinet showed the Crown Solicitor’s advice that the policy could be unconstitutional and that the Australian Competition and Consumer Commission believed it would increase petrol prices. In a magnanimous gesture, Mr O’Farrell said the decision to dump the ban was made ‘after listening to the concerns of motorists’ and that the new policy (which replaced the new policy to be enacted July 1st) is sensible in that it gives motorists the choice.

BP Australia and Shell Australia said enforcing the 6% ethanol mandate would deliver the same poor result for motorists as banning regular unleaded; that unleaded accounts for about 60% of fuel sold in NSW; the two companies say nearly all regular unleaded would need to be converted to E10 to achieve the target.  It’s also unknown how Shell (who is closing a refinery in NSW) would mix in ‘local’ ethanol into imported fuels.

The NSW Greens have finally twigged and are now calling for a suspension of the ethanol mandate. Quite rightly they are concerned that more ethanol production will drive up food prices by using grain normally used for food.

As Australia is already a net importer of food, one wonders why Mr O’Farrell doesn’t work on driving his state to be the highest food producing state in the country. Imagine the low level of unemployment … so Barry, is it really about the regional jobs, food security and environmental benefits of ethanol manufacturers who – without many levels of government subsidy – would fail.

I am not a fan of oil companies, full stop. However, politically motivated market manipulations such as E10 are an impost on us all.

Mr O’Farrell’s ‘big stick’ citing of penalties up to $110,000 (Biofuels Act) to ‘ensure oil companies complied with the mandate’ are unproductive and his ‘get out of jail’ card has been played with the Independent Pricing and Regulatory Tribunal examining claims – by oil companies – that a shortage of ethanol made it impossible to achieve the target, should be reported to the media for the public’s greater awareness and knowledge.

Corporate Government is a bane on the environment and affects all our lives ….