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Wednesday, 18 September 1996
Page: 3565


Senator PARER (Minister for Resources and Energy)(11.12 a.m.) —I wish to respond to some of the remarks made by various speakers this morning. First of all, let us address the document, referred to as the unsourced document, which was waved around with great gusto by Senator Lees. It was also referred to by another senator. The Australian Democrats talked about producing all the documents, but let me say that all the documents have been produced.


Senator Kernot —Which document is that one?


Senator PARER —Let me finish, for goodness sake. You are the one who gets upset when people interject. That particular document happens to be, would you believe, my speech notes that I intended to use. They have not yet been approved; they are my own internal speech notes that ended up in the hands of Bob Gordon, and he gave them to the Democrats—surprise, surprise. There is nothing magical about them.


Senator Bob Collins —How did he get them?


Senator PARER —I will tell you later. What you did get, and what I tabled in this particular place, was the portfolio evaluation, a management response to the ethanol bounty scheme. It is the complete documentation; there is no other documentation.

I am not going to repeat all the things I said before, but from every aspect this thing was tried and it was a failure. There are tut-tuts coming from the Democrats over there. It was your idea so you have to promote it, but the question is whether it is ever going to be economic. The answer has to be no. You say, `Well, you have only given it two years; it was a three-year program.' The amount of uptake in the first two years was fairly minor, $3 million but, in taking a very sensible decision after an in-depth evaluation, we have saved the taxpayers of this country $20 million.

But that is not the only reason. Other reasons have been outlined in the full report, and that is why I tabled it. If, having read the tabled document, you still have some dispute with it, by all means canvass it. But I would say that any reasonable person in this country, having read that document, could come to no other conclusion than to abandon the particular project.

It is not as though we are walking away from alternative energies. We are totally supportive of alternative energies, provided the proposal is practical, not pixie stuff. This proposal fits into the pixie category, regrettably.

We have assisted the Energy Research and Development Corporation's continuing research into ethanol. We have maintained the budget figure for the lignocellulosic pilot plant—the use of woody waste. Perhaps, with the passage of time, that technology will be able to produce liquid fuels which are competitive.

The issue of competitiveness was raised. I point out again that the cost of producing ethanol is in the order of 70c a litre, with no indication of that figure coming down. The estimate of 30c to 40c a litre does not bear scrutiny. The current production of liquid fuels from oil is about 23c a litre.

The bounty amounted to 18c a litre. All up, if you take into account the excise that applies to fossil fuels and the state excise levies, you are looking at all-up support for the industry of 60c a litre. Even with removal of the bounty, which saves the Australian taxpayer $20 million, there is still an amount of 40c a litre where the alternative fuel industry has a lead over fossil fuels. I would have thought that was fairly substantial.

I come now to the crocodile tears shed by some senators. It was made very clear to me that ethanol is a by-product of CSR at Sarina and also the gluten manufacturer at Manildra. Certainly, they would have liked it to continue—anyone likes to keep the money coming in. But it was also made very clear to me that the work being done at Manildra and CSR will continue; it will not change. This talk of farmers ringing up is just nonsense—arrant nonsense. (Time expired)