Australians scientists are working on a project to turn worthless waste into oil.


LEIGH SALES, PRESENTER: With the price of fuel hitting $1.50 a litre, there's a growing push to develop renewable alternatives. Scientists in Australia are part of the global race to develop new biofuels. In fact researchers here claim to be leading the world with a project turning waste into oil. But investment in such technologies is slow while industries wait for further detail on the proposed carbon tax. Rebecca Baillie reports.

REBECCA BAILLIE, REPORTER: It looks unassuming, but inside this tin shed on the NSW Central Coast they're turning waste into liquid gold.

THOMAS MASCHMEYER, CHEMISTRY, UNI. OF SYDNEY: You will see the liquid bio oil coming out just like beer out of a tap at the Oktoberfest.

REBECCA BAILLIE: Using hot water, high pressure and extreme temperatures, Sydney University scientists and engineers at Ignite Energy are converting a worthless forestry by-product into oil.

THOMAS MASCHMEYER: We can have fuels which are stable. They are liquid, they are storable, they are transportable and they are blendable, and that's a revolutionary breakthrough and that is what no-one else in the world can do.

REBECCA BAILLIE: Professor Thomas Maschmeyer says the process could work with any biomass, from bamboo to algae. What's more, the liquid biocrude can be processed into drop-in transport fuels at conventional refineries.

So this beaker here, the end of the process, that can be pumped straight into a car?

THOMAS MASCHMEYER: Absolutely, into a car, into an aeroplane or into a large diesel engine.

REBECCA BAILLIE: Using biofuels to propel vehicles is nothing new. The original model T-Ford ran on ethanol. And most modern cars are geared to run on ethanol blended fuels.

Currently, Australian ethanol is made from waste wheat or sugar cane. But Thomas Maschmeyer argues, unlike his next-generation biofuel, which is made from non-edible sources, increasing demand for ethanol will see the need to eat into the food crop.

THOMAS MASCHMEYER: In terms of the food versus fuel debate, we clearly win on all fronts.

REBECCA BAILLIE: Australia's thinkers for transport fuel saw 772,000 barrels of fossil fuel oil consumed every day last year, contributing about 14 per cent of the nation's greenhouse gas emissions. Refineries here have been operating at full capacity for the past eight years and the country must import 30 per cent of its petrol, diesel and jet fuel.

STEPHEN SCHUCK, BIOENERGY AUSTRALIA: We're basically dependent on fuel supplies from a few countries, mainly in the Middle East, and we've seen recent political volatility which has caused quite a spark in oil price and reflected at the bowser.

REBECCA BAILLIE: Dr Stephen Schuck says securing Australia's fuel supply and reducing its greenhouse gas emissions rely on projects like this biomass-to-biofuel venture, which has received a Federal Government research grant.

STEPHEN SCHUCK: These advanced biofuels can reduce the greenhouse gas emissions by about 90 per cent, compared to, let's say, conventional petroleum or diesel.

DALE GARDNER, US NATIONAL RENEWABLE ENERGY LABORATORY: The availability of affordable, clean energy is gonna be the defining factor, not just for the US, but for the world.

REBECCA BAILLIE: Dale Gardener from the United States Government's National Renewable Energy Laboratory says the US is investing an enormous amount in developing home-grown, green transport fuels. That's because America uses about a trillion litres of fossil fuel gasoline diesel and jet fuel every year and imports 65 per cent of that, mostly from politically unstable countries in the Middle East and North Africa.

DALE GARDNER: In Washington, they're talking about whether we need to tap into our strategic petroleum reserve in order to make up for those few per cent, you know, of barrels that aren't gonna be coming from that area.

BARACK OBAMA, US PRESIDENT: The Pentagon isn't seeking these alternative fuels just to protect our environment, they're pursuing these home-grown energy sources to protect our national security.

REBECCA BAILLIE: The United States Department of Defence is testing biofuels in its air, ground and naval fleets, aiming to halve its Navy petroleum use by 2020.
While ethanol's market share has grown in Australia's eastern states, compulsory mandates for ethanol blends in both Queensland and NSW have been stalled due to lack of supply.

HEATHER BRODIE, BIOFUELS ASSOCIATION OF AUST.: Australia seems to be lagging the rest of the world when it comes to both the production of the fuel and the uptake at the consumer end.

REBECCA BAILLIE: CEO of the biofuels association, Heather Brodie, represents Australia's ethanol and biodiesel producers, including this biodiesel operator in the Hunter Valley. The industry warns it'll go out of business if draft legislation is passed by Federal Parliament to apply higher excise on local alternative fuels, bringing them in line with imports.

HEATHER BRODIE: If the imported product is entering the country at, say, 50 or 60 per cent less than the Australian producers can even get their feed stocks, they can't compete.

REBECCA BAILLIE: Consultant Michael Cochran publishes an annual report into the Australian biofuels industry. He says industry is reluctant to invest in Australian alternative fuels due to confusion over both the proposed alternative fuels legislation and the price on carbon.

MICHAEL COCHRAN, APAC BIOFUEL CONSULTANTS: The industry's looking really for clarity and detail on how the carbon tax will be implemented so that they can invest and investments are not frustrated by change of policy further down the track.

THOMAS MASCHMEYER: It would have been very helpful if we had had a clear resolution of this issue a year and a half ago.

HEATHER BRODIE: It's very difficult for me to see how the future generations of biofuels in Australia can possibly be successful if the current generations can't be successful.

REBECCA BAILLIE: What everyone agrees on though, the future of transportation relies on sustainable, renewable replacements for fossil fuels.

THOMAS MASCHMEYER: There's no silver bullet. The days of cheap oil when they basically drill a hole in the ground and it would come up for free, they are very close to be over now.

LEIGH SALES: Rebecca Baillie reporting there.



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