United Ethanol Refinery Closure?

[scotty nm35]

Seems the government doesn't like ethanol as a fuel, or is it perhaps just lobbying from the oil companies? Make up your own mind. I just don't understand politicians...

http://www.unitedpetroleum.com.au/united/news/news-item/news/2014/02/17/dalby-ethanol-bio-refinery-under-threat-of-closure-

Quoted from the United website:

17 February 2014

The Dalby Bio-Refinery is under threat of closure due to the lack of action by both the Federal Government and Queensland State Government.
The Dalby Bio-Ethanol Refinery was closed for 3 weeks last Saturday due to lack of demand for fuel grade ethanol.

In 2011 the Federal Government confirmed that the Ethanol Production Grants Scheme would be renewed for a period of 10 years. On that basis companies such as Dalby Bio- Refinery Limited and United Petroleum invested heavily in renewable fuels and worked hard to promote and market E10 Petrol and E85 to both Government and end consumers. However the Federal Government and State Governments
have not taken any steps to ensure that the Oil Majors gave the consumer an option to buy the superior and greener fuels, nor did they take steps to ensure that their own fleets used these renewable fuels. Indeed both the Federal Government and State Governments know that the Oil Majors have been systematically removing filling positions from their sites to drive down sales, and not passing on the full
excise benefit to the consumer. At the same time the Shell with their $1.63 Billion investment in Ethanol production in Brazil and BP with their massive ethanol joint venture also in Brazil, are selling and promoting ethanol fuels in many countries across the world. The Oil Majors were as very disappointed that the Ethanol Production Grants scheme was ratified, as they wanted to import ethanol from Brazil.

The Federal Government in a quest to make budget savings are considering a back flip on an Australian Government promise to the renewable fuels industry which had strong bi-partisan support. The BREE Report commissioned by the Department of Industry contradicts many previous Government and Industry Reports, and is fundamentally flawed.

The Dalby Bio-Refinery is struggling to break even due to low demand caused by Queensland State Government inaction. We now find that following the investment of many millions of dollars into the renewable fuel industry the Federal Government will close down the Australian Ethanol Industry on Budget Night. This is clearly unfair and sets a dangerous precedent to local and foreign investors in any industrial
enterprise in Australia.

United Petroleum has been a very strong supporter of renewable fuels and particularly ethanol and sells its E10 products in Queensland at a 4 cpl discount to unleaded petrol. It has continued to invest in ethanol fuels due to the Ethanol Production Grants and representations by Government in support of greener and renewable fuels. The move by the Federal Government to shut down the industry will deprive its customers the opportunity to choose a higher octane, greener and lower pump price petrol.

On a number of occasions the Ethanol Producers have requested an Ethanol Mandate in Queensland to sure up demand which clearly acts to reduce production costs and ensure that the Major Oil companies promote the use of ethanol. The Queensland State Government decided that despite falling volumes due to lack of Major Oil Company support, and the fact that there are two Queensland producers in regional
Queensland, that there was no reason to act. If the Federal Government decides to close the industry down on Budget Night the action that should have been taken by the Queensland State Government will be too late.

Government Mandates are in place in some 59 countries across the world for health reasons, environmental reasons, and energy security reasons. In the United States of America it is mandated that ethanol is added to almost every litre of unleaded petrol sold in every State of that country. It seems that Australia is the only country in the world to decide that renewable fuels should not be encouraged and fossil fuels are the future.

The Staff at the Dalby Bio-Refinery are hard working and highly skilled people and are worried about their futures. Further it will impact the contractors and suppliers to the Dalby Bio- Refinery most of which live on the Darling Downs. It is clear that whilst the Federal and State Governments talk about regional development when the election is over so is the support.

The Dalby Bio- Refinery is a very large purchaser of grain in the Darling Downs area and producer of high quality Cattle Feed. This supports our farmers by placing an effective price floor under the price of grain when the world prices fall to very low levels, which they do due the their cyclical nature. The loss of the Dalby Bio-Refinery will be just another blow to the farmers of the Darling Downs, at a time when drought is
biting.

The Federal Department of Industry has not acted to encourage the renewable fuels industry in Australia and the BREE Report encourages the importation of renewable fuels into Australia. Clearly given Australia’s strong agricultural sector, a domestic renewable fuels industry is most important. At the same time the NSW State Government have been unable to enforce the 6% ethanol mandate that they have in
place in NSW. The Major Oil Companies have time and time again flouted the NSW Ethanol Mandate and not met the NSW Government mandated targets without any proper reasons.

We call on the Federal Government to renew their commitment to the Ethanol production Grants Scheme to honour the green fuels and environmental commitments they made to the Australian people. We also call on the NSW State Government to enforce their legislation and bring the Major Oil Companies to heal.
Importantly the Queensland State Government must now take action and introduce an ethanol mandate to stabilize the industry.

Media inquiries, interviews or photos – contact David Szymczak
Phone (03) 9413 -1400
Email [email protected]
Website www.unitedpetroleum.com.au

- See more at: http://www.unitedpetroleum.com.au/united/news/news-item/news/2014/02/17/dalby-ethanol-bio-refinery-under-threat-of-closure-#sthash.Vy6ltU5z.dpuf

[jay-rod]

Are you fcuking kidding me...

This better not slip by and happen

[Ben C34]

Makes sense. The government is standing by leting industries close, if we don't build cars we dont need to make fuel either, cos soon enough the coubtry will be screwed.

Anything that costs money the liberals are against, even if there is proven economic/environmental or strategic gain.

[ido09s]

As with most refineries in Australia this is an old refinery. Unfortunately old refineries cost dollars to upgrade and this story has been worded to sound like the government is trying to get rid of ethnol based fuels when i fact this story should be about United complaining that the government wouldnt help them pay to upgrade the facility.

As for the making fuels comment, we dont really make much anyway. I should know, i import it all for one of the majors. The whole were screwed if we go to war is just rubbish as people dont realise how much finished product is actualy imported versus what we actually refine

I dont understand how you can say that the government is happy to let business close. The idea of business it to make money and if your not making money you obviously dont stay alive. Why is it up to the government to prop up companies constantly?

[scotty nm35]

Ethanol has a set price in the market place, it is based on some Singapore fuel index. Unfortunately there is also a large government excise on it now, so it doesn't make the profit margins it should. Quite often I find I am paying nearly as much for ethanol as 91, which considering the energy density is wrong on all levels.

As a 'green' energy source it is being shat on imo, we have the chance to make a carbon neutral fuel from rubbish essentially, it's something the "carbon tax' should have been helping prop up, not silly solar schemes. Instead Ethanol and LPG have been lumped with the excise, meaning these greener fuels just can't compete.

[GTSBoy]

As a 'green' energy source it is being shat on imo, we have the chance to make a carbon neutral fuel from rubbish essentially, it's something the "carbon tax' should have been helping prop up, not silly solar schemes. Instead Ethanol and LPG have been lumped with the excise, meaning these greener fuels just can't compete.

The energy cost of turning that "rubbish" into fuel is still more than the finished fuel is worth. The process is not efficient and therefore bio-ethanol is still not a sensible automotive fuel, regardless of how much you all love it because it unleashes free powerz.

Ethanol is on a similar basis to solar in terms of it not making sense to spend the energy to get the resulting "energy source" except inasmuch as it might (hopefully) just sponsor enough R&D to eventually get the processes and products to the point where it starts making sense.

[scotty nm35]

Exactly, but with no profit margin that innovative design won't happen.

Using electricity to process the ethanol is a waste when it can be done much cheaper utilising solar stills and other renewables. As this would require new technology and massive refineries it won't happen unless there is greater incentive, which the government would have to push.

I use ethanol for many reasons, the least of which is engine power.

[discopotato03]

Good , just made a coffee .

Oil Companies are global thieves as is most of the business world because the retail price of just about everything consumers buy bears little resemblance to its production costs .

I'm fairly certain oil co's see ethanol as a threat to their projected incomes and it's not in their interests to promote it .

We know that producing and transporting fuel grade ethanol (in bulk) is cheaper than ULP but it has not had the affect on fuel price that it should because oil co's largely set the price not the ethanol producers . I reckon if the ethanol producers were buying ULP , for a fair price , and blending themselves fuel would be cheaper in high percentage ethanol blends .

Why the f**k should you pay ULP prices for ethanol ? It hasn't come across the seas in bulk tankers or been through involved cracking processes .

I don't go with this bullshit about being Green , f**k the Greens and their left wing socialist agendas they are not your friends . I do like the fact that that less lethal goes out the pipe burning ethanol and the main issues to me are price and range . If you paid a fair price for ethanol you could live with less range and filling a bit more often , also engines can be optimised to run ethanol and get back most or all of the consumption difference . This alone is a threat to "oil futures" .

The ethanol beat up . Joe Average hear say knows full well that ethanol in fuel is a cheap nasty extender made exclusively to rip you off . It burns your seals out and kills your engine . Don't need to research anything because the beer bastards at the pub know everything about nothing and the slurring consensus is that ethanol kills injins but they throw it down their own hole ...

I posted up in the ethanol thread that some Americans think oil co's are making under octane ULP specifically to blend 10% ethanol with , get it "up" to 91 octane using our scale . Refining say 85 octane ULP would be cheaper in volume than 91 and they're not giving away free octane dollars producing "91E10" . Of course this would be shit stuff for any engine and give piss poor consumption , AND it gives ethanol the bad name oil companies and idiots want to hear .

Check out servo signs advertising "budget E10" and notice the price can be significantly lower than straight 91 ULP . If they started with real 91ULP and added 10% ethanol the octane rating will be higher , have you seen I think it's 93 or 94 octane at some 7Eleven servos ? Cheaper than straight 95 ULP and the law only allows 10% ethanol blends for non flex fuelled vehicles .

I think the oil companies should be forced by law to say which unleaded fuel they blend with ethanol and what the actual octane rating is . That way consumers if they bother to care can have some idea of the heat valve and knock resistance of what they're paying for .

Three things need to happen .

People need to be shown that in reasonable ULP ethanol is not a bad thing .

They need to be shown that mid strength blends 15-30% is workable in cars with modern engine control systems - again provided the ULP is not shit .

People need to know that oil co's are ripping them badly on what they pay for the eth content , and that ethanol producers have zip say in this .

One more , it wouldn't hurt petrol heads to know that some ethanol blended into 98 ULP can make it noticeably better without the high volume fuel system dramas E70/85 creates .

A .

Edited February 27, 2014 by discopotato03

[GTSBoy]

We know that producing and transporting fuel grade ethanol (in bulk) is cheaper than ULP

A .

It's not cheaper. That was the point of my post. The digestion, fermentation and distillation stages actually consume a hell of a lot of energy with the existing technology and there aren't any really promising new technologies yet proven.

The real value of just about any product can be approximated by how much energy it takes to produce it. Aluminium? Takes a lot of energy to produce (a metric shit ton actually) and so it is much more expensive to buy than iron. Solar panels are only as cheap as they are because of subsidies. They consume a lot of energy to make the high grade silicon wafers. Ethanol is in the same boat. Without subsidies the product is more expensive than it is actually worth. So the question becomes, "do you directly pay for R&D to make the process more efficient, or do you indirectly pay by propping up an unrealistic industry in the hope that they will put the time, effort and money in to do the R&D themselves". The former is the classic approach and works to varying degrees. The latter is becoming the modern approach and works sometimes, and other times it simply leads to fat lazy industries relying on the subsidy.

And the best* thing about ethanol is that the vast majority of it produced throughout the world is actually done from primary crops, not from waste material, thereby consume massive amounts of land, water and (pretty much irreplaceable) mineral fertilisers that could have been more beneficially used to produce food. This is less the case in Australia now than it has been, but it certainly was 100% true up until recently.

*you know I mean worst, right?

[scotty nm35]

So we should kill an entire renewable fuel source because it has a bad name, and has been managed and controlled poorly, mostly by oil companies that want it to die anyway? Still comes back to government incompetence imo...

[Ben C34]

Need to get onto the poo flinging senator ricky muir. From the motoring enthusiast party. Im sure he'll fix it

[KiwiRS4T]

I do not belong to the Green Party. I do belong to a couple of car clubs and drive a gas guzzling RB30 but that does not mean I can avoid being aware of the real dangers of climate change and the contribution that carbon emissions make to this problem. I plan to run my car on E85 when it becomes available at the pump. In NZ most ethanol is produced as a by product of the milk industry and I support public funds (my taxes) being used to research more and better alternative fuels.

[GTSBoy]

So we should kill an entire renewable fuel source because it has a bad name, and has been managed and controlled poorly, mostly by oil companies that want it to die anyway? Still comes back to government incompetence imo...

Well, yeah, certainly that is an option. My real tirade is about how wrong it is to START industries that have no technological basis for existing and therefore must rely on massive subsidy to even come close to competing with the existing industry's product. Now, I agree the oil companies are deadshits, but you have to face the fact that the price point their product sells at is artificially high because it is laden with massive taxation. The real value of that fuel is much cheaper. And ethanol cannot now, and probably won't ever be able to compete so long as there is even moderately easily fossil fuel available to be just pulled out of the ground. The market economy we have created for ourselves requires that the previous cheap resource is exhausted (or nearly exhausted and therefore becomes frightfully expensive) before an alternative will become viable - UNLESS the alternative has a significant and immediate technical and financial advantage. Ethanol doesn't have either, really.

The human condition will not permit us to stop using oil until it is all gone. At which point we will probably have a civilisational hernia and completely fall apart, because we won't have done enough to get ready for it. If you think I'm making your point for you, I am, but that is not the reason I'm typing this. The problem is that the same inertia that drives us to leave it too late to prepare for the end of fossil fuels is the inertia that drives businesses propped up by subsidies to just rest on the status quo instead of working towards not needing the subsidy. Only those businesses that are run by the uncommon people of the world (Bransons and other similar driven types) will try to go forward. Most others won't.

[RBrennan25]

Australian ethanol will die because oil co's don't own it here and will get no money from it, which means our government gets less money from the tax it charges oil co's. yes it will tax ethanol but it won't cover the money they loose from the oil co's

Unfortunately money drives this whole disgusting world, and those who have it will forever decide how the rest of us will live.

[RBrennan25]

Also who gives two shots how much money it takes to set up ethanol plants? If Australian money is used to fund Australian companies to buy Australian crops to make Australian fuels for Australian people, don't we all win? I'm not economics professor but in that scenario, we set the prices not Singapore, we get the profits reinvested, and we'll get the savings. Problem is savings make governments mad and poor.

[scotty nm35]

It obviously works well in Brazil. Perhaps we should send some politicians there for a taxpayer funded holiday... Hopefully they would learn a thing or two about sustainable ethanol production.

I can only see a green party member even giving a toss about the subject, and they would rather we were all riding pushies.

[RBrennan25]

I think the only thing they'd learn about ethanol on a taxpayer funded holiday would be what the local beer tastes like

[GTSBoy]

It obviously works well in Brazil. Perhaps we should send some politicians there for a taxpayer funded holiday... Hopefully they would learn a thing or two about sustainable ethanol production.

I can only see a green party member even giving a toss about the subject, and they would rather we were all riding pushies.

It only works in Brazil if you don't count the cost of the rainforest destruction that is providing the new land to grow sugar crops on. They only get about 5 productive seasons of of newly cleared rainsforest land before they've stuffed it and have to move on.

Brazil, like all such examples, only looks good from a great height.

[RBrennan25]

There must be away around that though, we've been growing sugar cane in Queensland for pretty much ever?

[discopotato03]

If someone at the other end of our imported fuel supply chain turned the tap off what would you suggest we do ? We can grow all sorts of crops here now that our produce can't compete on price . Doesn't have to be a food crop and wouldn't matter anyway . Give the farmers a job and employment for a few . The yanks are doing it big time because home grown works for them . Massive production and huge train loads of finished ethanol for distribution .

Once we lose all manufacturing the services industry won't prop up the rest and the welfare state continues to grow .

Your UN "sustainability" agendas want us all starving and on the beg .