Katter fuels ethanol debate

He says serious commitment to renewable biofuels would also dramatically improve air quality in our cities and help underpin the rural economy, particularly the grain and sugar sectors - both currently depressed by over-supplied global markets.

According to Mr Katter, a mandatory ethanol content of at least 10 per cent in Australian petrol tanks would not only ease the nation's significant reliance on imported fuels it could "realistically cut petrol costs at the bowser to about $1.05 cents a litre or less".

He said Australia now spends about $25 billion a year on fuel imports, up from just $1 billion 12 years ago.

As domestic oil wells dry up and local oil refineries shut down, imports now account for 90pc of our fuel needs and are tipped to reach almost 100pc by 2030 unless new local sources are established.

Mr Katter said even the livestock industry - a traditional critic of promoting grain for fuel production in competition with stockfeed use - stood to benefit.

A key by-product of the ethanol production process was valuable "distillers grain" for stock feed.

"It's a super food. No extra bulky starch but three times the nutritional value of traditional stock feed grains," he said.

His comments come as his Katter's Australian Party (KAP) MPs in Queensland push to again introduce State legislation supporting mandatory use of ethanol in fuel.

He has also attempted to have the issue debated in federal parliament.

Visiting last week's Australian National Field Days (ANFD) in Orange, NSW, Mr Katter said a 10pc blend would give the ethanol industry enough self-sustaining momentum to operate without government funding incentives.

In fact, he expected motorists would demand even more price-competitive ethanol content in their fuel mix once they realised the benefits to their hip pockets and air quality.

"It's burns cleaner than petrol, it carries more power than petrol and if a 10 per cent blend was mandatory, as it is elsewhere around the world, I think Australian motorists would soon be calling for 30 per cent ethanol in their fuel mix," he said.

Australia was notable for not having a national mandatory ethanol blend in petrol, despite a 10pc ethanol plan being past government policy in NSW.

In stark contrast overseas gasoline standards included a 10pc ethanol blend (and rising) in the US, 15pc in the European Union, 10pc in China's most populated provinces, and in Thailand, the Philippines, Canada, Mexico and most of South America.

Japan had a 3pc minimum ethanol blend requirement and was looking at expanding its policy and India currently required 5pc.

"There are lots of advantages in ethanol, but the primary reason it is so popular overseas is to improve air quality and human health, especially in crowded cities," Mr Katter said.

"In NSW 1470 people die every year from diseases attributed to motor vehicle-related emissions - more die from lung cancer caused by air quality than from car accidents.

"Sao Paulo (population 12 million) has the cleanest air quality of any city on earth because ethanol is so widely used in Brazil."

Mr Katter, a long-time advocate of renewable fuel production, said Australia's fuel security also demanded strategies to help insulate the economy from the impact of overseas fuel supply disruptions.

"Our reliance on imports and the decline in the number of bulk depots around the country means there will be no more than two weeks' fuel supply available in Australia within two years, according to the NRMA," he said.

"If we experience a global or regional oil supply shock the nation will be in strife - fuel is fundamental to everything that happens."

He estimated grain could contribute about 55pc of Australia's ethanol needs, topped up by about 40pc from sugar cane, potentially lifting prices for both commodities by 16pc and 30pc respectively.

Renewable biodiesel industries were also likely to build momentum if Australia got serious about ethanol.

"In the US gasoline costs the equivalent of $A91 cents thanks largely to ethanol," Mr Katter said.

"I know it isn't cheaper to make ethanol than it is to extract and refine oil and distribute it, but petrol doesn't cost as much as the oil companies sell it for either.

"There are a lot of ethanol opportunities to develop.

"I think Australia has even bigger potential for ethanol production than Brazil if we take advantage of the farming capacity and water availability in northern Australia."

KAP's Queensland leader Ray Hooper said the party's Liquid Fuel Supply (Ethanol) Amendment bill, due to be debated before Christmas, went beyond party politics.

"The benefits to Queensland are many - thousands of jobs, diversification of an important industry, cheaper and more secure fuel and the health benefits which are well documented," Mr Hopper said.

Creating an ethanol market in Queensland may also break the monopoly which foreign-owned cane millers had on that industry, giving sugar farmers an opportunity to sell into a new market.