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Introduction
Distinguished guests, ladies and gentlemen.
Good morning and thank you for the opportunity to be here at Curtin University to launch two very important facilities – the Fuels and Energy Technology Institute (FETI) and, within the Institute, the Biofuels Research and Development Facility (BRDF).
Professors Li and Hackett have given us an insight into the remarkable work being carried out at these facilities.
It is less than two and a half years since I announced the Commonwealth Government’s $2.5 million funding commitment to the Curtin University Gen 2 project and the results achieved during that short time are nothing short of remarkable.
I offer my congratulations to Professor Li and his team for their hard work, dedication and for their success in this cutting-edge field.
Biofuels: Government support
The Australian Government recognises the potential of biofuels, and the significant role they could play when it comes to ensuring our energy security, both now and into the future.
That’s why we established the Gen 2 – Second Generation – Biofuels Program.
And that is why we are continuing our support with a $20 million funding commitment to assist in the development of advanced biofuel technologies in Australia.
Our $3.2 billion Australian Renewable Energy Agency and carbon-pricing framework will further drive these technologies.
This investment by the Government is already paying dividends, as evidenced by the work already underway here at the University.
The innovative technology developed by the Institute has potential applications for what is certainly something that I, as Energy Minister, consider to be one of our greatest challenges – competitively priced, lower-emission energy.
The Institute’s research has sought to overcome barriers to commercialisation by focussing on lowering capital and operating costs.
The development of pyrolysis technology has led to a wider set of applications, including the production of bio-char to improve land quality and sequester carbon.
Crucially, the Institute's new pyrolysis technology uses simplified equipment, does not produce a residual product that requires disposal, demands less energy and can accept nearly all biomass as the feedstock.
These breakthroughs mean that pyrolysis technology overcomes some of the barriers to the commercialisation of biofuels technology.
For instance, Verve Energy, the largest generator of electricity in Western Australia, is already interested in seeing how the Institute's technology can be used in its existing power generation equipment.
I am advised that you have been successful in securing a grant from Commercialisation Australia to help drive this technology forward even further along the path to deployment.
Also important is what the development this technology has reinforced in terms of the potential economic dividends from innovation.
The patenting of this technology opens up exciting possibilities in terms of dividends from licensing at the commercialisation stage.
It is from this type of innovation that we will see “green jobs” and real economic benefits from new technology in the future.
This is a point that is reinforced in the draft Energy White Paper, which I released in December last year.
Biofuels: big picture potential
The Western Australian Government, the CSIRO, the Future Farms Industry CRC, the Centre for Research into Energy for Sustainable Transport and Spitfire Oil are all funding partners in the Gen 2 project.
Interestingly, but perhaps unsurprisingly given the calibre of the research staff as well as the university itself, the work being conducted here at the Institute also extends into other key areas of the energy portfolio.
The Fuels and Technology Institute counts another of my portfolio agencies, the Australian Solar Institute, amongst its funding partners.
And importantly, the University is pursuing a number of international collaborations, including with China, Japan, Europe and the USA.
The collaboration on biofuels with Washington State University is supported by the Government’s International Science Linkage program – a critically important partnership given developments in US policy.
Most, if not all of you here today, would be aware of the US Navy’s plans for the “Great Green Fleet” – part of the US Navy’s goal to source 50 per cent of its energy from renewable sources by 2020.
The Australian Department of Defence is working closely with the US Navy in terms of both military capabilities and supply opportunities, and my own department is also working with Defence on the energy policy, research and technological aspects.
A fortnight ago I met with the Secretary of the US Navy in Washington DC to discuss plans and opportunities for further collaboration on advanced biofuels.
Ladies and Gentlemen, in my view it comes down to this - the US Navy, given the sheer volume of liquid fuel it requires, is potentially a game changing customer for the biofuels industry, both in America and around the world.
Australia is widely recognised globally as having favourable economic geography for producing biofuel feedstocks.
We are also at the cutting edge of technological developments – as evidenced here at the Institute.
In terms of the US Navy, we are also a critical supply point.
But the potential of biofuels extends beyond marine vessels and electricity generation.
It also has real potential applications in the aviation and transport sector more broadly – and as Minister for Tourism I watch these developments with interest.
Because second generation or advanced biofuels represent a whole new ball game.
Today pilot and demonstration sites, like the CSIRO’s site in Williamtown, like Sapphire Energy’s site in Luna County New Mexico, which I also visited, are producing crude oil from feedstocks such as algae that can be refined into fuels by existing refineries, like the oil we extract from the North West Shelf or the Gulf of Mexico.
All that with little or no waste products.
And, in the case of algae, with the added benefit of using the waste CO2 generated from other processes.
Second generation biofuels can be drop-in, requiring no engine modification and no change to existing oil refining infrastructure.
When you consider that around 50 per cent of US crude oil is imported – and that Australia is expected to increase its consumption of liquid fuels from 51 gigalitres in 2010 to 67 gigalitres by 2030 – the attractiveness of biofuels to play a part in our energy security is clear.
Add to this the potential economic benefits in terms of providing a competitive alternative to high global oil prices as well as the environmental benefits and the proposition becomes more attractive still.
After all the 2011 World Energy Outlook projects that, over the next twenty five years, the cost of liquid fuels are expected to rise as suppliers develop more expensive sources to meet increased world energy demand.
This is good news for the alternative fuels industry as increasing oil prices have the potential to improve the competitiveness of biofuels.
Biofuels Policy Development
Now that is not to say that biofuel technologies are without their challenges.
This is still a fledgling industry and much hard work remains to be done before the true, long-term commercial viability of biofuels can be determined.
But the signs are promising.
And the case for continued support for research and development is strong.
Just before Christmas I had the pleasure of launching another of our Gen 2 program’s success stories, Ignite Energy’s Licella Biofuels Commercial Demonstration Facility.
Licella’s plant near Gosford in New South Wales will soon begin trials demonstrating the production of bio-crude oil that has the potential to be refined into petrol, diesel and aviation fuel.
That same week I released the Government’s draft Energy White Paper, the National Energy Security Assessment and the Strategic Framework for Alternative Transport Fuels.
The frameworks the Australian Government is putting in place recognise that in the long-term, advanced biofuels may offer potential cost savings for the transport sector – and that’s good for the economy.
As outlined in the Alternative Fuels Framework, however I do not support policies for short term gain such as an ethanol mandate.
I believe the best approach is to allow the market to operate unfettered by an arbitrary mandate so that cost effective alternatives compete on their own merit.
With respect to the New South Wales Government’s ethanol mandate, I believe they should defer the proposed start date and use the delay to thoroughly review all the impacts, including the impacts upon motorists.
I do not wish to see the promise of advanced biofuels caught up in these issues.
Advanced biofuels are the real hope for Australia, such as those developed in the Institute, because they do not compete with food sources.
New jobs and economic activity, particularly in rural Australia, are another benefit of a competitive biofuels industry.
For example, plans to take the Ignite Energy demonstration plant to the Latrobe Valley to use the brown coal resource could bring a new and sustainable industry to a region that’s undergoing significant transformation to its economic base.
And given that about a quarter of Australia’s greenhouse-gas emissions come from conventional refined fuels, biofuels offer an environmentally attractive alternative.
That’s especially true in aviation, where advanced biofuels are the only promising alternative renewable fuel source.
Aside from the environmental benefits, these biofuels will help airlines to hedge against uncertainty in the fossil-fuel market.
The flow-on benefits for tourism are clear.
Like Virgin Australia, Air New Zealand is another airline exploring such partnerships with the biofuels sector.
Thanks to similar interest from Qantas, Australia’s first biofuel flight may take off before the end of this year.
Conclusion
In conclusion, the work you do here is central to the creation of a competitive, advanced biofuels industry in Australia, with the potential to contribute to our energy security, reduce our carbon footprint and create new jobs in rural Australia.
By working through the challenges, I believe Australia can be a global leader in the production of advanced biofuels, and the research and development that underpins them.
The Biofuels Research and Development Facility and the Fuels and Energy Technology Institute are necessary components in fostering this new industry in Australia.
I wish you every success, and I’m proud to declare them officially open.
Thank you