Tony Windsor (New England, Independent) Share this | Hansard source

I think all members of parliament and the general public have expressed concern in recent weeks and days, particularly since the return of members to the parliament, about the price of petrol. We have seen the escalation of problems in the Middle East and leakage problems in Alaska and we know the flow-on effects that that could have in terms of the price of petrol. The matter of public importance that I have introduced today relates to the worsening impact of increasing petrol prices and the government’s reluctance to act. Some may think that that is being a little critical of the government. This MPI is really about looking at things that can be done to alleviate the short-term problems of the impact of petrol prices on our community, the impacts in the medium and longer terms, and the things that can be done into the future. I am sure that the speakers who come forward today will elaborate on some of the suggestions that are out there on how to alleviate the problem of petrol prices not only within Australia but also globally.

I took advantage of the winter break to spend a fortnight in the United States and Canada looking at ethanol plants and biodiesel plants. I was interested in the attitude of the farm sector, the government sector, the fuel company sector and the motor vehicle sector towards the acceptance or otherwise of renewable fuels. I do thank those people in all those sectors who took the time to visit with us. I would have to say that the overall impression that I obtained—and I think it can have an impact in Australia—was one of a very positive attitude to the future sustainability of fuel resources within those nations, particularly the United States. There was a very positive attitude in the farm sector and in the farm lobby sector. There was a high degree of leadership in the political sector as well. I think that stands in stark contrast to the dithering that has been going on in Australia since 2001 in terms of addressing renewable energy, particularly biofuels.

That is not to say that the government has not done anything; obviously it has put in place some renewable energy targets and it has put in place some assistance to proponents who are looking at building plants. The one thing that came through very clearly, talking to the Americans and to the Canadians, was that the industry would not have taken off had there not been the political leadership to actually mandate some degree of usage of the product so that the oil companies would be forced to access the product into their distribution network. I think we all realise the strong influence that the oil companies have over the distribution network within Australia. If they are not going to voluntarily accept a product—for a whole range of reasons; they might be health, environmental or economic—we may need government leadership. Under current circumstances with very high US barrel prices, accepting this product may be the most economic thing for them to do. It seems that, even though the Prime Minister had a cup of coffee with a few of them about 12 months ago and talked about achieving some voluntary targets, those targets are not being achieved. The target that was set for 2006 has not been achieved at all and it is very unlikely that future targets will be.

One of the things that came out of my American visit very strongly was that there is a need for the government to play a leadership role. I congratulate the United States state and federal governments, and the Republicans and Democrats, who have looked at this issue from a very clear perspective: one of trying to reduce the dependence of their country on other countries for the supply of oil and the obvious manipulation that can go on in relation to that particular marketplace. We have seen at home in Australia the debate about the Iraqi wheat debacle and corrupt markets in terms of the wheat trade and the oil market and the various things that are happening at present.

Overall I received a very positive message. I saw a stark contrast between the United States farm lobby groups and the Australian lobby groups. I was a member of the Grains Council of Australia before entering parliament. I was a great supporter of the Grains Council of Australia. But they seem more interested in the right of the motorist to have some sort of choice rather than the right of the grain grower—whom they are supposed to represent—to earn a viable living and have their domestic grain production underpinned in some sense by another competitive process: that of accessing the international ethanol market. The National Farmers Federation have not been much better. I saw a stark contrast between those groups. I saw a stark contrast in terms of government leadership. One of the things that I was very impressed with—and I think this should happen in Australia and could happen in Australia if there was more positive leadership in the farming sector—was that most of the plants had some degree of farmer ownership. I visited 10 out of the 106 plants that have been constructed in America and a number in Canada as well. One particular plant in a community of about 3,500 to 4,000 people, with many farmers in the surrounding area, of course, had 2,300 farmer shareholders—and some community members who were not farmers were also shareholders. They formed a limited liability company. They were also financed for some of their debt portion by their local bank, so it was very much a community business activity. Obviously the farm sector in that sense has been able to lock in another outlet for its grain and make a degree of profit in terms of value-adding to that grain to turn it into ethanol.

The debate in Australia at the moment is: ‘What about the price? Does it make any difference?’ In one case a farmer-owned cooperative had moved into buying some of its own fuel stations—I know that is on a limited level. The price was US60c a gallon cheaper for E85—that is, 85 per cent ethanol—than it was for unleaded petrol. I was driving a Ford Explorer, a vehicle that is readily available in Australia, and it was being fuelled by E85 for quite some time. That equates to US16c per litre, which converts to the equivalent of A82c per litre at the bowser. That is in stark contrast to prices in some parts of rural Australia, where prices are nearly double that at the moment.

Discussions in the feedlot industry in Australia have raised the point that, if the ethanol industry were established or encouraged, it would have a positive impact on the price of grain, which would make it more difficult for the feedlot industry to exist. The feedlotters that I met with in the US see the ethanol industry as being positive, because the dried or wet distillers grain, as they call it, the by-product of the process—which is about a third of the tonnage that goes into the fermentation process to create ethanol or alcohol—comes out as a flake or a rolled grain which is high in protein and readily used by the feedlot market. So, in contrast to it being seen as a negative in Australia—there have been so many negatives peddled by people of all sorts of political persuasions and industry groups—it is being seen as a positive in the United States. In fact, one of the large feedlotters that I met with, who has 35,000 head of cattle near Denver, is using a 25 per cent ration of wet distillers grain, a by-product of the ethanol plant, and is achieving about a 20 per cent increase in weight gain from the use of that product. So there is a positive happening there as well.

In Australia there has been talk from time to time about the car companies. The car companies do not particularly want ethanol. You cannot get the car companies to do anything. I have here a copy of the Wall Street Journal from Friday, 4 August, which contains a full page ad stating: ‘General Motors and ethanol—putting together the pieces to make it whole’. I will not read the whole ad, but it is congratulating the government and the fuel companies. You have very good eyes, Mr Deputy Speaker Jenkins; you will probably read it from where you are sitting. Right down the bottom, it says ‘Live-green-go-yellow.com’. I would advise people in the media to have a good look at that. This ad shows that the car companies are embracing ethanol. It states:

With more than 2 million General Motors flex-fuel vehicles on the road today, we want to make E85, a fuel blend of 85 per cent ethanol and 15 per cent gasoline, available to more people in the United States.

That is the sort of thing that needs to happen here. General Motors Holden in Australia is actually making flex-fuel vehicles in Australia to accept E24 fuel, with 24 per cent ethanol in the mix. Those cars are not available in Australia. They are being exported to Brazil. Brazil is an interesting example: it has gone from being 80 per cent dependent on foreign fuel sources to being 100 per cent self-sufficient, and that is what is happening at a political level in terms of policy. Countries are looking at renewable energy not only for a whole range of health and environmental reasons but also for ways of achieving some degree of self-reliance with respect to their energy needs. I think the Treasurer and others really need to have a good look at the way in which we have, in a sense, falsified the tax system so that we see energy as a source of tax revenue rather than as something that should give us a competitive advantage in international activities.

My suggestion to address the fuel problems in the immediate term would be to reduce part of the excise, the 51c a litre that is removed today, and in the medium and longer term to mandate and phase in at least 10 per cent ethanol in our fuel. It can be done at one per cent a year over 10 years or two per cent a year over five years. It is nonsense that you cannot mandate ethanol in this country because there would not be enough ethanol to put into the marketplace as of tomorrow. No fool in the world has ever attempted to do that. I hear fools in this country suggesting that. One of those, the Minister for Industry, Tourism and Resources, Ian Macfarlane, has been making the statement quite readily that we could not suddenly put 10 per cent ethanol into the marketplace. How foolish is that statement? Obviously it would be phased in. If he would like to travel to Minnesota, he can talk to the legislators there about how they did it over a four-year period. They are moving to 20 per cent ethanol as we speak. So let us break this dependence on others for our energy needs. Let us look at biodiesel, ethanol, wind and water. There are a whole range of alternatives out there that could be embraced.

In Canada, for instance, I visited a large plant that was going to use wheat as the basic ingredient—poor quality wheat, feed wheat, the wheat that is ruined by rain that we hear about so often in Australia, the wheat that does not have the protein and cannot access high prices in the international market. These are the wheats that produce more starch, and they are the grain that ethanol plants would be looking at. The over-reliance of wheat growers on high levels of nitrogen to achieve high protein levels is the sort of thing that could be broken.

If we start to look at the advantages of this approach, we will see that it is about not only renewable energy, health and the environment but also about investment; jobs; the domestic security of our energy needs; country towns growing, progressing and doing something beneficial; and recognising that even agricultural products that are considered essentially worthless on the world market, for a whole range of corrupt reasons, can be a valuable resource. Those products may be sugar, wheat, corn or sorghum.

In conclusion, I would suggest that there are things that we can do. One is to mandate the use of ethanol to develop a medium- and long-term approach to renewable fuels. In the immediate term, we should look at reducing some of the excise so that motorists and Australian families, whom we all represent, are not persecuted in the way in which they are being persecuted at the moment. (Time expired)

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