By global standards Australia is investing a paltry amount in next-generation biofuels and the idea that a $10 carbon tax would be an acceptable alternative to emissions trading is a 'dangerous fallacy', Caltex CEO Julian Segal said today.
Caltex will next month begin selling 85%-ethanol blend fuel at selected service stations, with a goal of selling E85 at 100 sites by mid-2011.
Vehicles able to use the E85 blend include Holden's flex-fuel Commodores, which will be available later this year.
The company is also involved in a consortium that is proposing to establish a second-generation ethanol plant in Victoria (see related article).
Billions spent globally
Segal today told the American Chamber of Commerce in Sydney that the amount Australia was investing in biofuels technology paled in comparison to the amount spent by other nations.
"Billions of dollars are being spent by government and industry globally" he said.
"The determination of countries like the United States and China to find sustainable solutions to liquid energy supply should not be under-estimated."
"For example, the U.S. Department of Energy is investing over $1 billion in research, development and deployment of advanced biofuels technologies," he said.
"In contrast, the Australian Government's $4.5 billion Clean Energy Initiative includes only $15 million for the Second-Generation Biofuels Research and Development Program," he said.
"I don't want to be critical of either state or federal governments in Australia but it does seem there is inadequate funding of biofuels R&D and industry development," he said.
"We really do need an energy white paper that addresses the energy security and climate challenges facing Australia and the need for renewable and alternative liquid fuels, particularly biofuels," he said
The federal Labor Government put its energy white paper process on hold while it attempted to finalise climate change policy measures.
However, "we shouldn't wait until the lights go out and oil prices escalate before we get a comprehensive grip on energy policy in Australia", Segal said.
He described the "emerging notion" that Australia could implement a $10 carbon tax as an alternative to the CPRS as "a dangerous fallacy".
"A carbon tax would not have a significant impact on emissions from liquid fuels," he said.
"More importantly for Caltex, it would impose a cost burden of about $25 million per year on our refineries, which could not be recovered from the market due to import competition."
Avgas/biofuel blend
Segal noted that despite the "common perception" that aircraft can't fly on biofuels "there is great interest in using jet fuel derived from non-food crops and algae for military and commercial applications".
Segal referred to a U.S. F18 fighter jet, describing it as "the Ferrari of the skies" that was recently certified to use a 50% biofuel blend.
Dubbed the 'Green Hornet', the same jet earned a mention in a Washington D.C. speech on clean energy and national security given yesterday by U.S. Navy Secretary Ray Mabus.
(See video of clean energy and national security speech)
Referring to a U.S. Navy target set last October, Mabus said that by 2020 "half of all the energy we use ashore and afloat – in the air, on the sea and under the sea and on land – will come from alternative sources".
This would reduce the Navy's reliance on "fragile" oil supply infrastructure and a vulnerable supply chain, he said.
