Economic madness about ethanol

The feedstock for producing ethanol is sugar and Queensland produces heaps of cheap cane-sugar. It also has a large reserve capacity to produce more of it. Using sorghum as a feedstock is much more costly. But Greenies don't care about what their obsessions cost other people, of course.

It would make a lot more sense to back Brazil-style integrated ethanol production at one of the now-closed sugar mills in North Queensland -- such as Goondi or South Johnstone. That process at present gives Brazil fuel that is cheaper than oil-based fuel. You've just got to crush sugarcane and sugar-laden juice flows out. And that juice can go straight into an ethanol distillery

ANALYSTS have warned that further food price rises are inevitable after the Queensland Government revealed almost half the ethanol to be blended in petrol used in motor vehicles in the state would come from grain. Queensland will become the national leader in biofuel use after the Bligh Government yesterday pledged to press ahead with plans to require petrol to contain 5 per cent ethanol by 2010.

The Weekend Australian reported that Premier Nathan Rees had ditched the commitment by NSW to introduce the nation's first mandated level of biodiesel and to boost the ethanol mandate from 2 to 10 per cent. NSW was the first state to introduce a biofuels mandate last October. Victoria and other states have gone cold on biofuels amid mounting evidence that taxpayer-subsidised mandates have contributed to growing world food shortages and rising prices. Up to 50,000 tonnes of grain a year are used for ethanol in NSW.

Queensland had indicated sugarcane waste would be used for ethanol production, but Regional Development Minister Desley Boyle told The Australian that 40 per cent of the ethanol needed for the 5 per cent mandate would come from grain. Most of the grain-based ethanol would be produced at Dalby Bio Refinery's new plant on the Darling Downs, which makes the biofuel from sorghum.

Ms Boyle said Queensland was not concerned by the about-face in NSW. "We will proceed with a 5 per cent mandate and that will be lifted to 10 per cent over time," she said. "A mandated level of ethanol is a good first step towards an alternative fuels industry." Ms Boyle said the use of sorghum for ethanol would have negligible impact on grain supply and prices. The sorghum would be livestock-feed grain standard. "This will have no effect on the food supply chain," she said.

Queensland would boost research to expand the use of algae, cellulose plant wastes and other environmentally friendly sources of biofuel production.

Biofuels analyst Geoff Ward, an agricultural scientist, said it was inevitable that the Dalby plant would reduce grain supplies and boost food costs. "It is nonsense to imply there is no effect on the food chain because it is cattle-feed grain," Mr Ward said. "Cattle-feed grain and food-quality grain are products from the same resource, produced from the same land and use the same inputs. Besides, feedlots use grain to produce a food - beef."

Meanwhile the Australian Competition and Consumer Commission has rejected claims that service station operators were breaching the Trade Practices Act by misleading motorists about ethanol. The Australian Lot Feeders Association told the ACCC in a submission that motorists should be informed that ethanol-blended fuel should be sold for 4c a litre less than conventional petrol to compensate for its poor fuel economy. "Blended fuel is almost never priced less at this discount," said association president Jim Cudmore. However, the ACCC has told the association it was up to motorists to weigh the varying arguments about ethanol, including the possible benefits from its use such as improved urban air quality and reduced greenhouse gas emissions.


Posted by John Ray. For a daily critique of Leftist activities, see DISSECTING LEFTISM. For a daily survey of Australian politics, see AUSTRALIAN POLITICS Also, don't forget your roundup of Obama news and commentary at OBAMA WATCH (2). Email me (John Ray) here

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