Both sides of Federal politics are now offering the short term populist sop of a billion dollars plus a year in tax or excise rebates. That is, every year.
This starkly illustrates the absence of influence of scientists and technologists in both the parliament and the public service.
Australia is over 80 per cent self-sufficient in oil. Linking crude oil, and hence retail petrol and diesel prices, to international ones is an artificial whim of globalisation-mesmerised economists. Why not link it to our export contract price of coal and gas? The price of electricity doesn't vary daily or weekly. Nor then would petrol.
Australia has abundant reserves of natural gas and coal. In other countries these are already converted into liquid fuels. Instead, we sell our fossil fuels overseas. We do this on fixed price contracts set for several years. CSIRO has had projects going for years for researching conversion processes adapted to local needs.
The chemistry of coal to oil conversion goes back to research in the 1920s in Berlin's Kaiser Wilhelm Institute. In 1944, during World War II, Germany produced 6.5 million tonnes of synthetic fuel from coal from 25 factories. That is 124,000 barrels per day. Post-war, cheap Middle East oil put the widespread application of this technology onto the back burner, except in apartheid South Africa where the Sasol coal to oil process successfully overcame the embargo on oil.
In the 60-plus years since this process was discovered a lot of basic and applied research has revealed other synthetic routes and Sasol is doing very well, thank you. But the big oil companies have not been interested.
Unlike coal, natural gas and LPG are clean to convert. There are several possible processes to make petrol and diesel, including those that are economic for our off-shore reserves and smaller on-land gas reserves such as coal bed methane. The greenhouse implications are better than other feedstocks. Some gas conversion plants have been built and are being built in Nigeria and Qatar, so are already cost competitive even in these low cost oil exporters. China is building two new large coal to synthetic fuel plants.
The capital cost of the conversion plant varies but it is in the several billion dollar range depending on size. Given that it could increase Australian self-sufficiency close to 100 per cent, it would remove an enormous strategic threat. Imagine a hit on a major Middle East oilfield or the sinking of a number of oil tankers. Our airforce and submarines would not be of much help. An investment in synthetic fuel plants now should be seen equivalent to an investment in our defence forces. A number of smaller plants would be less vulnerable.
In the unlikely event of a return to cheap oil, such a plant may not fulfill its full potential, but much defence hardware is also never used in anger and in due course is written off. In both cases we are paying for security insurance.
Even including long-term capital cost recovery, the cost of synthetic fuel from coal or gas is estimated at around $75 a barrel. Of course there are greenhouse gas issues (better for gas than coal), but the amount of liquid fuel we will continue to need is unlikely to come from sustainable sources any time soon.
While not a flagship, there has been the equivalent of a ''rowing boat'' of effort going at CSIRO in this field for some time, unless the lights have been turned off there as well. With chemistry and common sense, we could look forward to petrol prices staying as constant as bread and beer. So Kevin 07, onward to fuel heaven?
Professor Selinger is a fellow of the Australian Academy of Technological Sciences and Engineering.
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