March 12th 2005

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Articles from this issue:

COVER STORY: The media elites versus the public

CANBERRA OBSERVED: American-style workplace relations for Australia?

SCHOOLS: Teacher training at the mercy of politics

HUMAN CLONING: UN victory's implications for Australia

WESTERN AUSTRALIA: Gallop Labor Government returned to power

EDITORIAL: Debt tsunami moves closer

AUSTRALIAN ECONOMY: The economy that will confront the next generation

NATIONAL AFFAIRS: Reserve Bank governor defends his record

ENERGY: Ethanol - Australia being left behind

STRAWS IN THE WIND: Visas for sale / Kyoto hot air convention / Europe, China and the US-Japan alliance / Edge of the abyss

ASIA: Japan, India and China - new strategic alliance?

VIETNAM: Hanoi's abysmal human rights record

A response to Babette Francis (letter)

Turkish massacre of the Armenians (letter)

Putin - can a leopard change his spots? (letter)

Abortion's hidden wounds (letter)

BOOKS: MICHAEL MOORE is a Big Fat Stupid White Man

BOOKS: SAME-SEX MARRIAGE: Putting Every Household at Risk

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Ethanol - Australia being left behind

by Patrick J. Byrne

News Weekly, March 12, 2005
Two reports predict a major leap in US ethanol production. General Motors is expanding production of ethanol-fuelled vehicles and plans are underway for Brazil to supply ethanol to Japan.

As part of its ethanol push, automotive giant General Motors (GM) will provide 28 US state governments with demonstration-vehicles that will run on 85 per cent ethanol and 15 per cent petrol, or E85. These cars can run on anything from conventional fuel up to E85.

Thomas Stephens, vice-president of GM Powertrains group, told about a thousand people at a conference on the ethanol industry that vehicles are ready today that can run on E85, but the challenge is to create widespread availability of the fuel.

Stephens is responsible for development and production of GM engines and transmissions worldwide.

GM, America's largest producer of E85 vehicles, has about a million flexible-fuel vehicles on US roads. Other manufacturers have sold about 3 million more flex-fuel vehicles.

"If they all ran on E85 fuel, it would equate to 45 million barrels of crude that we wouldn't have to import annually. This is really a big deal toward reducing our dependence on foreign oil," Stephens said.

Today, about 30 per cent of US automotive petrol contains 10 per cent ethanol.

There is growing competition for oil as countries like India and China develop rapidly. Stephens said that China's consumption of oil rose 15 per cent last year. Hence the importance of ethanol as an alternative fuel source.

Ethanol is produced from plant sugars. Now it is possible to take waste plant material, then, using enzymes, to convert plant cellulose into sugars, and the sugars into ethanol.

US Business Week has highlighted two reports that anticipate ethanol from cellulose becoming a major source of fuel.

Last December, the bipartisan National Commission on Energy Policy report, Ending the Energy Stalemate, gave the thumbs-up to cellulose-based ethanol.

Also, last December, the Natural Resources Defense Council's Growing Energy report anticipated that by 2050 cellulose-based ethanol would replace more than half of the volume of oil used to fuel cars and trucks today.

According to Business Week: "Both studies urge speedy development of this fuel. The hold-up has been that crop stalks require special enzymes to convert their cellulose into sucrose, the easy-to-ferment sugar in grains. The US Energy Department is now investing $20 million a year into efforts co-funded by such companies as Cargill, Dow Chemical and DuPont.

"However, a small Canadian company has grabbed the early lead. Last April, privately-owned Iogen Corp. began selling the world's first commercial cellulosic ethanol ...

"Iogen is now prowling for a site for its first large-scale bio-refinery ... By 2008, the US$300 million plant could be pumping out some 50 million gallons a year."

Meanwhile, according to Brazil Magazine, Brazil's Ministry of Agriculture, Livestock, and Supply and the Japan Bank for International Cooperation (JBIC) have just agreed on the first phase of a term of reference for the future implantation of a bilateral biofuel program aimed at exporting ethanol and biodiesel fuel to the Japanese market. The terms of reference represent only the first phase of a strategic medium and long-term project.

Brazil is the world's largest producer of ethanol. It is currently expanding its sugar-cane industry by the equivalent of about one Australian sugar-cane industry every two to three years, largely for ethanol production for Brazil's domestic market.

Although Brazil is Australia's main competitor on the world sugar market, Brazil is anxiously seeking to have Australia become its major co-supplier of ethanol to Japan. The Japanese do not want to be reliant on a single supplier. Unlike the Brazilians, who have jumped at the proposal, Canberra has shown little interest in joining Brazil in supplying Japan.

Brazil Magazine said that this year, "Brazilian and Japanese technical specialists will assemble a detailed picture of Brazil's agricultural production of energy sources and define strategies for the modernisation of the sector and the expansion of fuel alcohol production in Brazil."

Japan has begun using ethanol in fuel. "Now their interest has turned to financing long-term projects capable of increasing Brazilian production and guaranteeing the continuous and regular exportation of this product to Japan."

According to Luiz Carlos Guedes, from Brazil's Ministry of Agriculture, Livestock, and Supply, the likely cooperation agreement will permit investments to expand the area of sugar-cane plantation, install new refineries, and modernise the infrastructure for warehousing and transporting ethanol.

"This agreement would have extraordinary economic, social, and environmental significance and would strengthen the relationship between Brazil and Japan even more," he told the magazine.

  • Pat Byrne

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