Do something about global warming
Without it effecting your pocket or your lifestyle.
Importing crude oil is costing us dearly. -- Australia is currently spending $12 billion (or 72 per cent of our current account deficit) on importing petroleum products. This figure has increased by 58 % in the two years since 2003-04. That's 12 billion dollars leaving our country.
A major reason for the increase has been the continuing decline in the production of Australia’s oil.
In 2001 Australia produced 31 billion litres. In 2005 it was just over 16.4 billion litres. We are now producing less, importing more and paying more for the imports.
What can we do about it?
Australians are using some 20,000 Million litres of petrol per year. Mandating the use of ethanol in petrol at just 10% will reduce crude oil imports by $1.2 billion per year. At the same time it will reduce CO2 emissions by 3.2 million tons.
Can we produce that much ethanol?
Australia has the capacity to produce 170 million litres of ethanol per year. Ethanol production capacity is expected to expand in 2007 and 2008 with several large projects under way in both eastern and western Australia. (ABARE)
However, only 41 million litres of Ethanol have been sold in 2005 - 2006.
Imagine not sending that money overseas, but investing it in farmers and ethanol plants in Australia, effectively kick-starting a new industry, with an emphasis on regional development.
How does it reduce global warming?
By using 2,000 million litres of ethanol (10 % of Australia's petrol consumption), we will prevent 3.2 million tons of Carbon Dioxide entering the atmosphere.
Health Benefits
The potential health benefits, according to the report of the Task force on Biofuels (2005) (a), using the scenario of only 290 ML of ethanol and 60 ML of biodiesel by 2010, the annual health costs avoided could lie somewhere between the $3.3 million or 1.4 cents per litre (c/L) (b) and $90.4 million, or 30.4c/L. (c)
But would it be economical?
According to the same report of the Task force on Biofuels, on updated ABARE assumptions, the long-term world price of oil would need to average US$42–47 per barrel in 2004–05 dollars (depending on feedstock used) for a new ethanol producer to be viable post-2015 without government assistance.
With current government assistance, the required oil price is estimated to be US$25–30 per barrel for viability in 2015. (This morning the Crude oil price quoted = US$ $74.60 per barrel.)
notes:
(a) The Task force on Biofuels, (which was appointed by Prime Minister Howard in May 2005 to examine the latest scientific evidence on the impacts of ethanol and other biofuel use on human health, environmental outcomes and automotive operations)
(b) (2003 dollars) found by the 2003, 350 ML Target Report.
(c) (2004–05 dollars) using the indicative 40% reduction in reduced tailpipe emissions as suggested by some of the submissions to the committee.
ABARE report - Outlook for biofuels in Australia (March 2007)