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Wednesday, 11 December 2002
Page: 10223


Mrs DE-ANNE KELLY (11:38 AM) —I rise to speak on the Renewable Energy (Electricity) Amendment Bill 2002—a very worthy piece of legislation which will clarify eligible renewable energy sources, establish what an accredited power station is and the relevant acquisition of electricity. I think this fits in very well with the research priorities announced recently by the Prime Minister for Australia's future prosperity. I note that under `An environmentally sustainable Australia', the target is to transform the way Australians use the nation's land, water, mineral and, importantly, energy resources through a better understanding of the environment and the application of new technologies to natural resource industries. I think we would all welcome that.

I would now like to move to the question of another very worthy renewable source of energy, and that is ethanol. There are a number of distilleries in Australia producing ethanol; however, the United States is at the forefront of ethanol production worldwide. There are 56 distilleries in the US producing 1.8 billion gallons, which is equivalent to seven billion litres Australian—with a further trebling of production by 2010 to 19 billion litres.

However, an ethanol distillery in a community—an average size of 140 million gallons a year, which is equivalent to 150 million litres Australian—would expand the annual economic base of a community by $110 million a year. It would generate additional household income of $19 million and provide 41 direct jobs, particularly for young people in spheres such as chemistry, and mechanical and electrical engineering. Importantly, being renewable it requires the use of any green biofeedstock such as cane and grain.

Ethanol is a real benefit to the environment. It is non-toxic, water soluble and biodegradable. In fact, it is so harmless you actually drink it whenever you have an alcoholic drink. So, if it is good enough for you to drink, it must be pretty much good enough for anything else. But it is the environmental benefits that are significant. Ethanol use in the United States reduced carbon dioxide emissions—that is, greenhouse gas emissions—by 3.6 million tonnes in 2001. That was the equivalent of taking off American roads half a million cars. So the benefits of even a moderate blend of ethanol are quite extraordinary.

It is in fact with gross polluters where the real benefits of ethanol are realised. In the United States over half of vehicle emissions come from what are called gross polluters. These are older vehicles or even new vehicles with malfunctioning pollution control systems. Generally they make up only 10 per cent of the American fleet. With even a very modest ethanol blend, emissions of carbon monoxide, particulates and other greenhouse gases are reduced by 40 per cent. So from 10 per cent of the vehicles you get a 40 per cent reduction in greenhouse gas and particulate emissions. I will return to gross polluters later in my address, but they are a very significant factor.

I turn now to an article that appeared in the Australian on 26 November. It was headed `Ethanol may void warranties' and said:

One of the biggest suppliers of car components has warned that high ethanol concentrations in petrol will void the warranties on its products.

It went on to say:

In a letter to the Australian Automobile Association, US firm Gilbarco Veeder-Root says ethanol could make its pumps, meters and nozzles “fail prematurely”.

AAA executive director Lauchlan McIntosh yesterday said the letter reinforced his members' opposition to a mandated ethanol levy in petrol.

Again, Gilbarco, in its letter, said:

... ethanol could cause “irreversible damage to equipment”.

I am sure that that is quite alarming. Let us turn to Gilbarco Veeder-Root in the United States. Veeder-Root are a leading global supplier of automatic tank gauging and fuel management systems, including the very famous Red Jacket brand of submersible pumps and pressurised line leak detectors. Let us look at the very exciting attributes of Red Jacket Quantum Velocity 2 pumps. The Quantum 20 pumps are designed to run on diesel, 100 per cent gasoline or 80 per cent gasoline with up to 20 per cent ethanol. The Quantum Ag can run on 0 to 100 per cent ethanol.

I suggest that Gilbarco Veeder-Root contact their parent company in the United States and find out how to progress so that their componentry in Australia does not fail. They also need to explain to the Australian public and those who use their pumps here why they are selling inferior material in Australia which is likely to fail when their parent company in the United States is selling Red Jacket systems that are able to run on up to 100 per cent ethanol. The fact that some of the biggest customers of Veeder-Root in Australia are the oil companies may have something to do with it. But that article is severely misleading—not by the journalist, I might add, but by the content that has been given to them by the Australian Automobile Association and Gilbarco Veeder-Root.

I turn to another article, from the Sydney Morning Herald, and it is titled `Tank's a lot: drivers left in the dark by Costello's Catch 22 on ethanol'. The article refers to a question asked of the Treasurer in question time on Monday. It claims:

... the Government's inane policy on ethanol, a fuel additive commonly sold at dangerously high concentrations in petrol in NSW.

It goes on to say that the chief of the Australian Petroleum Institute, Brian Nye, claimed:

... it was made “quite clear” to him ... that no controls should be introduced that might damage Manildra's interests.

Manildra sells ethanol in New South Wales. It goes on:

Whatever the reason, motorists continue to suffer.

The article says that vehicle manufacturers will not honour warranties for cars run on higher blends and that:

People should be very careful of the effect the petrol they use has on the warranties of their cars.

The Treasurer answered this question extremely well. He said that the government had yet to establish what levels of ethanol were safe, so it could set no standards at present. A very intelligent answer.

Let us go to warranties for a moment. How many cars in Australia are still under warranty? The reality is that there are at present two million cars—model years 1999-2002—under warranty. There are 10 million vehicles in Australia in total, so there are eight million vehicles out of warranty. In fact, 80 per cent of the Australian fleet are out of warranty—and many of those are the gross polluters in the United States we just mentioned that will benefit most from potentially higher blends of ethanol.

What needs to be done in this debate is for not only fossil fuel manufacturers but also the fossilised thinking of the Australian Automobile Association, the oil companies and the Australian Labor Party to pull themselves into the 21st century and accept what everybody else does with fuel. Do we legislate to say that people must not put diesel in their unleaded cars? No, we do not. Do we legislate that people must not put unleaded fuel in their diesel vehicles? No, we do not. We rely on the commonsense of the Australian people. They can read.

What we need to do is to make information clearly available so that those people who have a vehicle under warranty, if they are concerned, know what they are buying. The 80 per cent of people who have vehicles that are out of warranty will be able to purchase a product that is soft on the wallet and soft on the environment—because ethanol soon will be very competitive with petroleum, and that is the rub for the oil companies. That is what we are seeking. Let us continue to remember that 80 per cent of vehicles in Australia are out of warranty. I commend the Treasurer for remaining very calm under that questioning. Now let us move to another article. This article is headed `Ethanol in petrol alert ignored: ALP'. It states:

The ALP has accused the Federal Government of ignoring bureaucratic advice to limit the ethanol content of petrol, claiming that its failure to act risked up to $2500 in damage to every car.

Let us see what happens in the United States again. Let us look at General Motors; actually, they have got a company here in Australia that manufactures cars as well: Holden. Holden's parent company, General Motors, are the world's largest vehicle manufacturer. What are General Motors in the US doing? They have produced the first modern mass-produced ethanol vehicle in the United States. It is the 320 E85 Lumina. These vehicles operate on either ethanol, gasoline or any combination from a single tank. These are smart vehicles. They will sense what is in the tank and will switch automatically: 100 per cent ethanol, no worry; E85, no worry; gasoline, we'll do that. General Motors in the US are flexible, forward-looking and living in the 21st century—unlike the opposition. Ford, another significant car manufacturer, has built an E85 Taurus. It runs on 85 per cent ethanol. But my goodness me, they cannot have been alert to the ALP! Yes, it is risking damage. I hope they have sent a message over to Ford and General Motors.

The reality is that, in the United States, these major manufacturers are looking at ethanol-powered flexible fuel vehicles, which are reducing smog-forming emissions by 30 to 50 per cent. The three top manufacturers in the US—Chrysler, Ford and General Motors—recommend the use of oxygenated fuels. I do wish the Australian Automobile Association would actually read that and listen to that. The manufacturers in the US—some of which are represented here—recommend the use of oxygenated fuels, such as ethanol, because of their clean air benefits.

I commend the bill to the House, and I recommend that the fossil thinking of the opposition, the Australian Automobile Association and the oil companies comes into the 21st century. I commend the Treasurer and others for defending new fuels. We are going into the carbohydrate fuel age. Others need to lift their thinking.