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Address to the Forum on Labor's Fuel Blueprint: Film & Television Institute: Fremantle, Western Australia: 18 February 2006. \n\n

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I am very pleased to participate in today’s forum on Labor’s Fuels Blueprint.

It’s great to see so many local branch members here today as well as members of the Sustainable Transport Coalition.

I commend your efforts to raise awareness about new transport solutions.

I am also looking forward to hearing from fuels expert David Worth.

Last year I announced Labor’s Blueprint on Fuels - a strategy to make us more self-sufficient by increasing the use of Australian transport fuels and developing fuels that are cleaner and cheaper.

More fuel - more types of fuel. Cleaner fuels - cheaper fuels - Australian fuels.

We need national leadership to develop:

• Existing alternatives like liquid petroleum gas, ethanol and biodiesel;

• Emerging alternatives such as compressed natural gas, liquid fuel from gas and stored electricity; and

• Future fuels, such as hydrogen.

We also need to develop the technologies to make it happen. We do this because our transport fuel markets need a fresh blast of competition.

We must make Australia less vulnerable to external shocks.

We must make Australia less reliant on the foreign oil affecting our trade deficit and foreign debt.

We must play a leading role in emerging energy sectors to boost our export performance and take advantage of opportunities in world markets. We must invest in preserving our environment by diversifying our fuel base beyond petrol to biofuels and gas and hydrogen.


David will talk in more detail about the fuel problem - how we are running out of oil - but allow me to outline why I believe Australia is facing a fuel crisis.

In the past three years, global oil prices have trebled. Australians spent an extra $2.3 billion on petrol last year compared with 2004.

Our dependence on foreign oil. Crude oil is our second biggest import item and refined petroleum our sixth biggest and, together, they constitute the largest import item on our trade accounts.

In net terms, Australia relies on imports for 17% of overall petrol consumption but by 2020, the Australian Bureau of Agricultural and Resource Economics estimates the figure will rise to 46%. Other industry analysts think this view is optimistic, saying our oil import dependency will rise to 78% over the next 10 years. That’s four out of every five tanks of petrol!

The equation is simple - as our dependency grows, so does our exposure - with serious implications for our economy.

The current fuel crisis could see the price of petrol rise to $5.00 a litre within a decade. The country is in need of national leadership to develop alternative fuels but the Government just sits on its hands and says: “I don’t know”.

The best John Howard can offer is:

“World oil prices are not something the Australian government, or any government, can influence. They are out of our control.”

His Minister for Resources is no better. He says:

“At this stage Australia’s fuel security is still good. Do we need to find more oil? Yes we do. But short of finding more oil I don’t know what the solution is.”

There is a long term solution - it is to diversify our fuel base and growing the Australian fuel industry. But this is not in the Government’s mind - I say it’s a national and urgent priority.


Because we are being left for dead by most other industrialised nations.

o The European Union is pouring massive investment into clean fuel cell technology;

o In the United States, President George Bush has put in place a five-year $US1.7 billion commitment to develop hydrogen energy and fuel cell technology. Even in the United States, where cars are bigger than houses, George Bush declares that their oil ‘addiction’ must be addressed;

o Iceland sets the benchmark - committed to becoming the world’s first hydrogen economy over the next 30 years - ending its reliance on fossil and foreign fuels;

o In the oil-rich Middle East, Qatar has declared it will become the gas to liquids capital of the world. It already has major gas to liquids projects making ultra clean diesel and has made a $10 billion infrastructure investment in Ras Laffan Industrial City; o Brazil is the dominant player in fuel ethanol. For the last 30 years,

all petrol sold in Brazil has contained at least 25% ethanol. While we have been paying sixty five or seventy US dollars for a barrel for oil, Brazilian firms are producing ethanol for $US28.00 a barrel; and

o Sweden recently proclaimed its ambition to be oil-free by 2020 - in just 15 years time!


Labor believes in developing a diversified Australian fuel Industry. We are running out of old fuels yet potentially have a plentiful supply of new fuels - if only our Government had the vision to develop them.

Under a Labor Government, Australia would have a comprehensive Australian Fuel Industry Plan to foster the development of a more diversified fuel production base.

Too much gas is left in the ground while our economy needs it. I am committed to putting in place effective incentives for development of this resource, and for a healthy resources sector in the long-term. That’s why we will:

o Re-examine the depreciation regime for gas production infrastructure;

o Allow the selective use of “flow-through” share schemes for smaller operators; and

o Implement regional resource infrastructure funds to help meet the cost of providing supporting infrastructure for onshore gas and minerals processing projects helping to grow the industry.

We must also foster demand for new Australian fuels and technologies by:

o Making alternative fuel vehicles tariff free, cutting up to $2000 off the price of current hybrid cars;

o Working with state and local government to give city traffic and parking advantages for these vehicles; and

o Examining the granting of tax rebates for converting petrol cars to LPG.

Australia also needs to lead the global race for innovation and the development of new fuels and fuel technologies. To achieve this Labor would:

o Conduct a feasibility study into a gas to liquids fuels plant in Australia;

o Offer Petroleum Resources Rent Tax incentives for developers of gas fields which provide resources for gas to liquid fuels projects;

o Examine a new infrastructure investment allowance for investment in Australian gas to liquids infrastructure;

o Develop a targeted funding scheme for research and development in this area; and

o Work with industry to improve engine design and fuel quality standards.

We need a new stream of contestable grants, supporting proposals for research into alternative fuel and its associated technologies. These grants would go to projects accessing existing private and public research money, leveraging in extra funds as well as demanding new priorities from Australia’s research community.

In relation to bio-fuels, Labor proposes to:

o Ease regulation of biodiesel production on farms; and

o Encourage a sustainable ethanol industry.


My vision for Australia is a country that stands on its own two feet. A country that invests in protecting its prosperity. An economy that does not shake under the weight of a global oil shock. And a country smart enough, determined enough and well able to set and achieve national goals.

Under John Howard and Peter Costello, Australia is a country without national goals - a country led by an arrogant government running out of control. That puts protecting its own political interests ahead of the national interest.

That sacrifices national leadership for self-preservation.

Now more than ever Australia needs national leadership to develop a diversified Australian fuel industry that.

I look forward to your questions and comments.