Democrats take 3 weeks to discover the merits of CNG

See Allison's speech on alternative fuels in the Senate from August 14 2006

Energy Initiatives

MINISTERIAL STATEMENTS Energy Initiatives Speech Senator ALLISON (VictoriaLeader of the Australian Democrats) (3.52 p.m.)Unfortunately, this statement on energy initiatives is another example of the government lurching from one knee-jerk reaction to another with regard to oil policy. It was not that long ago that we had the energy white paper and then, lo and behold, a matter of months after that was released, we had a full-on debate about nuclear energy, which was not even mentioned in the energy white paper. Then we had legislation, which was passed more recently, completely cutting the excise for diesel for off-road use. Then we had the decision to designate five per cent biodiesel blends as being the standardadvantaging BPbut then ruling out higher blends, which are perfectly able to be used. Even fuel with up to 100 per cent biodiesel can be used safely in vehicles. Then we had the decision to introduce an excise on alternative fuels which will start in 2011-12. Again, that is another example of leaping from one illogical policy step to another without a sensible plan in mind for what we now have, which is an entirely predictable increase in the cost of petrol. This should have been thought about some time ago. In fact, the Democrats are pleased to see the ALP come on board with some of these issues, because they have been almost more reluctant than the government on some of them.

I actually put together a paper for the edification of the government some years ago saying that Australias future has got to be in a range of fuels; that we could not just rely on oil, because peak oil is fast approaching; that we should not just rely on LPG, because we do not produce enough of it to make a difference; that we should not just rely on CNG, because there is nothing out there as yet and CNG needs a lot to get it kick-started; and that we could not rely on biofuels entirely either because we would have to turn over the entire countrys food production to biofuels if we were to look at that being the only fuel into the future. So there is some recognition of that in this announcement by the Prime Minister today.

There is a grant of $2,000 for the cost of converting new vehicles to LPG for private use and $1,000 for converting old vehiclesthough it may be other way round, I am not sure. In any case, if you do the calculations on that, we are talking about the conversion of somewhere between 340,000 and 670,000 vehicles on the road over the next eight years. That is all very well, but we already have hundreds of thousands of vehicles on the road using LPG. And that is a very good thingmost of them are taxis. But, still, the best possible outcome on this in terms of the numbers would be a million cars running on LPG. That is about the maximum that Australia, in any case, produces in terms of LPG. What is going to happen with this? Is it again going to be used mostly by taxis and the like? What happens to those others who are stuck with old vehicles and very fuel-inefficient cars? They are the ones who are currently complaining, because this government has never said anything about fuel efficiency. It has never encouraged our auto manufacturers to build fuel-efficient vehicles, despite the huge handouts to the auto industry. Billions and billions of dollars have gone into vehicles, but most of the time they were six-cylinder large vehicles that have now turned out to be big gas guzzlers.

As I said, this was entirely predictable. We knew that oil was not being discovered at the rate that it might have been in the fifties and sixties and that eventually demand would overtake the production. We are not going to run out of oil tomorrow. No-one is saying that. But there is absolutely no doubt that worldwide demand will push up the price of petrol. When that peak production is lower than the demand being made on it, we are going to see petrol become entirely unaffordable, and we could see economies around the world wrecked by this. That is why it is important for the Australian government to have had a serious think about this and put together a plan for the long-term future. Good though this announcement may be, several hundred thousand more LPG cars are not going to solve the problem.

There are some carrots for service stations to carry ethanol. Thatat last!is a good thing but it is not going to make the big difference that some people might want. There is still a limit of 10 per cent on ethanol blends, and that was agreed to by the Labor Party. The government in its wisdom decided this was the way forward. Yet over in Brazil, as we all know, there are 85 per cent blends. And you can get yourself a car which will run on 85 per cent ethanol and 15 per cent petrol. But, of course, you cannot find that fuel here because it is actually against the law to sell it. It does not make any sense, but there you go.

I applaud the extension of the Renewable Remote Power Generation Program. I remind the Senate that this was negotiated by the Democrats at the time of the GST and diesel changes. I was talking the other night to someone at the renewable energy conference, and he said that that program has been a huge success. Farmers have benefited enormously, as have Indigenous communities. Shifting from diesel generators to a combination, usually of diesel generation and renewable energy, has been enormously successful. That in fact should be an ongoing program. We should not stop until all of those who use diesel in this way have had the opportunity to convert to renewables. Only a tiny fraction of those who might take advantage of this program have so far been able to do so. So it is really important that it is there, and I would encourage the government to make sure it is ongoing. Again, National Party members should be up here saying what I am sayingbut no.

There is nothing there for compressed natural gas conversions. We did negotiate, again as part of that arrangement with the government back in 1998, for compressed natural gas conversions, but it was a failure. Why was it a failure? It was a failure because the government did not uphold their end of the bargain, which was to fund compressed natural gas service stations. There is no point in having a natural gas car without the stations. I had one for a while; there was one gas retail outlet in a very dark industrial area in North Melbourne, which, frankly, was not safe to go to at night and was out of the way. Until we get natural gas compressors, at the domestic scale, the fleet scale or the public retail outlet scale, we are not going to use this hugely valuable resource, which many cars could be running on. Natural gas has great potential, particularly for fleets but also at the domestic level.

So, as I said, we do not have an ethanol mandate. We have $17 million worth of carrots to hand out to the oil companies, again, to get them to put in bowsers that have E10. They are really not interested in doing that, quite frankly. Oil companies are saying: Why should we promote ethanol blended petrol when we can have 100 per cent of the product and make sure that all the profits come to us? We do not have to buy ethanol from someone else. Not all of them are saying that. There are one or two that are doing the right thing; BP in Queensland is, in this case. But try to find one in Victoria; it is almost impossible. The petrol companies will not do it until the government says: We are going to mandate it. This is how we are going to ramp it up and get ready for it. We will plan it with you and so on, but at some stage we mean to get 10 per cent of all fuel sold being ethanol. And then we have to change the law which restricts it to 10 per cent, because vehicles can easily run on 20 per cent. New cars certainly can and, if they cannot, then they should be able to. We know that vehicles being sent to Brazil can do it. Why do we not say to our auto manufacturers, Make sure the vehicles that come off the production line can take higher levels of ethanol? But no; that seems to be beyond the governments thinking.

There is no relief for biodiesel from the onerous testing regime for so-called backyard producers such as small producers and farmers. Again, the National Party should be in here, involved in this debate. Because the excise has been removed from diesel it is now cheaper for farmers to buy petrodiesel than it is to use waste products, grain or whatever they grow in order to make their own. They will eventually cop an excise. At the present time, going through the onerous regime of getting tested and accredited for producing biodiesel makes it that much more expensive. I am told that farmers out there are pretty angry about what this government has done. (Time expired)