ENERGY: by Bob KatterNews Weekly
Affordable, clean way to achieve fuel self-sufficiency
, September 14, 2013
American Robert Zubrin in his landmark book, Energy Victory: Winning the War on Terror by Breaking Free of Oil (2007), asks whether the United States should continue to send $230 billion a year to the Middle East to buy oil, or should the U.S. produce its own gasoline (petrol) from ethanol and shale oil, redirecting this $230 billion a year into the U.S. economy.
Bob Katter, MP
The Bush and particularly the Obama administrations have heeded this counsel and, on present trends, the U.S. will reportedly be self-sufficient in oil within 15 to 20 years.
The American renewables (ethanol) story started with Midwest states helping their farmers.
A landmark report in California indicated that possibly 10,000 deaths a year were occurring from motor vehicle emissions (Journal of the American Medical Association, March 6, 2002). This led to the national Air Quality Control Act. Following the 9/11 terrorist attacks on the U.S. in 2001, the Motor Vehicle Fuel Security Act was legislated.
Finally, the current high demand for fuel alternatives was caused by Middle Eastern and oil company greed, which drove petrol prices above ethanol prices, consequently triggering demand for the cheaper ethanol/gasoline.
In recent months, India, the United Kingdom, China and Japan have all announced ethanol mandates. This means that, except for the oil-producing countries, all of the European Union, almost all of the Americas and almost all of Asia — every continent except Africa and Australia — are on mandated (legislated) E-content in fuel.
Australia’s oil refineries are old, lacking size and economies of scale and are closing. In seven or eight years, it is expected that all of them will be closed, and all of our oil will then have to be imported.
Using only 7 per cent of Australia’s annual rainfall runoff, and a mere 3 per cent of northern Australia land (along with our current grain production), Australia could produce all of its requirements for replacing oil, which would usher in a new era of prosperity and benefit for everyone.
However, our failure to encourage ethanol production illustrates how poorly Australia is governed.
Australia should mandate by law 5 per cent E-content in liquid fuel, increasing over six years to 22 per cent. Thanks to the price and convenience of ethanol — locally-produced across the land — Australia, like Brazil, may expect to go up to 55 per cent E-content.
What will the benefits be from such policy?
• 1,000 people will be saved from dying from motor vehicle emissions in Sydney, and a further 1,000 lives saved in other capital cities.
• $23 billion a year (currently going to the Middle East to buy oil) will now go into rural Australia to employ mill workers, plant operators, farm contractors — and also bring back more families to the farm.
• 230,000 jobs will be created in rural Australia (economic modelling says 10 jobs per $1m).
• 1.6m people will move out of the cities into city hinterlands and rural Australia (economic modelling: seven extra people for every job created), decongesting our overcrowded rabbit-warren cities and repopulating devastated and depopulated rural Australia.
• $25 billion of superannuation funds will now find a “safe” (government-guaranteed) haven in government dividends earning 5 per cent annual interest for our retirees — money invested in building the grain-ethanol plants, sugar mills, dams and irrigation systems, farms and towns.
• Each year, our national debt increases by around $50 billion a year (while Australians become 4 per cent poorer). Ethanol will halve this annual haemorrhaging of our national wealth.
• Grain prices will increase by 13 per cent (this is what has happened in the U.S.).
• Sugar-cane prices will increase by 40 per cent (based on Brazil’s experience).
• Cattle (mostly dairy) farmers will be able to feed their livestock the cheap, super-nutritious ethanol by-product, “distillers grain”, and will enjoy a $500m a year benefit by way of reduction in supplementary feed costs and increased livestock survival rates.
• $5 billion a year increase in exports to China — a country desperately in need of clean energy.
• A reduction in electricity charges since, after sugar has been extracted, the fibre residue can be burned. This energy source in Brazil is used to produce electricity — so-called cogeneration. It costs the same to build a new cogeneration mill as it costs to build a non-cogeneration mill. Therefore it has negligible debt servicing, negligible fuel costs and nil wage costs (employment levels in a cogeneration mill are same as non-cogeneration mill). One-sixth of the national grid can therefore be supplied with cheap electricity from this expanded sugar industry.
So why have Australia’s dominant political parties stubbornly refused to mandate ethanol use?
For not only have 15,000 owner/operator petrol outlets gone, but the oil (fossil-fuel) companies and gas industries have demonstrated their immense power and influence over Australian politicians.
It is an appalling reality that, in spite of negligible operating costs, the $23 billion per year gas industry is paying scarcely a cent of benefit to the Australian people (2,500 jobs at most and, at best, $2 billion in royalties and taxes). Such an industry can afford to dispense much in political largesse.
And this, sadly, is what I believe fuels Australia’s mainstream political parties.
The Hon. Bob Katter, MP, is federal member for the northern Queensland electorate of Kennedy, and leader of Katter’s Australia Party (KAP).