Broadcast: 09/08/2006
Experts warn ethanol only a short-term solution
Reporter: Helen Brown
TONY JONES: Well, much attention is being focused now on the
potential of ethanol to help Australia out of its escalating petrol
crisis. But some experts are warning not to place too much hope in
that alternative fuel, cautioning that ethanol will only be a short-
term solution, at best. Helen Brown reports.
HELEN BROWN: The sensitivity of the oil industry was keenly felt
overnight: Oil giant BP shut down its Alaskan pipeline after it
sprung a leak. And that pushed a barrel of oil in London to an all-
time high of more than US$78. The temporary closure puts 400,000
barrels of oil out of world supply, at a time of geopolitical
uncertainty. Local motorists can expect to feel more pain, with
predictions a litre of fuel could hit $1.50.
GEOFF TROTTER, FUELTRAC (BRISBANE): There's probably some reluctance
by the oil companies to actually break that barrier. So, $1.499 is my
tip for the prices the week after this.
HELEN BROWN: Meanwhile, a survey shows the ongoing high cost of fuel
is further spooking business.
DR DUNCAN IRONMONGER, DUN & BRADSTREET: Well, the worst results we've
seen in terms of the growth of employment and sales and profits for
about... since the '91 recession really.
HELEN BROWN: Dun & Bradstreet says the Alaskan shutdown just adds to
the cost pressures.
DR DUNCAN IRONMONGER: Nearly everybody in the survey says that oil
prices are going to be the biggest impact on their business in the
year ahead, and I think this is just an example of the sort of news
that we will continue to have, I think. I don't see any let-up in
this.
HELEN BROWN: Politicians are now talking about subsidies to move
people to alternate fuels, such as ethanol mixes; however, one
analyst says giving people a financial incentive to try something
different doesn't necessarily solve the problem.
BARNEY FORAN, AUSTRALIAN NATIONAL UNIVERSITY: If we think of even the
fuels we need to run Sydney, we'd be pushing to supply Sydney, even
in 5 or 10 years, with enough biofuel to get the people around.
HELEN BROWN: Barney Foran looks at the cost effectiveness of creating
other energy sources and how they fit into the nation's resource
base. He says encouraging more ethanol use is a good way of getting
used to the idea of moving beyond petrol, but the nation doesn't
produce enough wheat and sugar cane to satisfy food demands, and
supply ethanol on the side.
BARNEY FORAN: And with the current technologies we use to make
ethanol and biodiesel, it's a real issue scaling up to, in 25 years
for example, to run an Australian transport fleet with ethanol as we
currently make it and biodiesel as we currently make it. They're
technologies that don't have a lot of legs in them, given the
magnitude of the challenge.
HELEN BROWN: He suggests eventually turning to something else:
methanol.
BARNEY FORAN: We've got to go to wood; wood done on a vast scale;
wood grown by 2050 - that's a couple of human generations away. Some
of the scenarios I run, we'll need somewhere between 50 million and
60 million hectares of what I call 'woodscape': different sorts of
landscape grown with different sorts of trees.
HELEN BROWN: And that kind of move would take a political effort of a
different kind. Helen Brown, Lateline.
