Wednesday, May 21, 2008

Biodiesel the saviour of inflation?

Today I have been reading more about Biodiesel and the transesterisation process. The use of ethanol versus methanol and wow this country is so ready to lead the world into the mass production of Biodiesel it is not funny. The environmental benefits of Biodiesel are almost immeasurable.

Today we have again seen oil prices skyrocket with more pain to be had at the Pump. We are told that this will only be inflationary and that the Reserve Bank is sure to increase Interest Rates to protect us from the evil scourge of inflation.

I heard today that the reason for Diesel prices in this country being as high as they are is simply due to the massive demand in Asia for the product.

This still does not make sense to me. The Reserve Bank Board and the Australian Labor Party are happy to see more people out of work, homeless and relying on Government handout. They even made provision for this inevitable outcome in their new Federal Budget.

So how do we explain this logic to the victims of the Reserve Bank Board decisions that this is the interest rate hike we must have? Or to the business that can no longer sustain itself without increasing cost and wages and the inevitable pressure that will be felt or need to close the doors or simply go broke.

Inflation in this country clearly is going to be driven by the outrageous increases in the price of oil. Why then are we not supporting a process of rapidly increasing production of this environmentally friendly alternative. One suspects that Government is still very happy to reap its now even more excessive income from Fuel Taxes. Funny how in opposition the Rudd Government was very critical of the Howard Government not relieving the pressure on Fuel Price by easing Tax but simply are mute on the topic now they are in Power.

Obviously the oil companies do not want to do this as it threatens their very existence. CSR (and others) through their sugar interests has a very real interest through the production of ethanol. Vegetable Oil Manufacturers and recyclers surely must have an interest. The farmers surely also have an interest. The transport industry I would have thought are extremely interested in creating at least a competitive product to encourage OPEC to release more oil to bring down the price.

The Vehicle Manufacturer’s must be interested with the not insignificant developmental investment in diesel power.

I ask again why are we waiting or is this just some massive political conspiracy?

1 comment:

Anonymous said...

The biodiesel thing is deeper than we think- I think! We need to look at the balance of the food chain, the economy overall and the true amount of energy that goes into producing a litre of biofuel, even when it is recycled cooking oil. In Australia, IF we can make the input-output equation balance, we have to think of how damaging it might be switching farmers from food production to fuel production, especially with our often marginal agriculture. In Africa there are corn riots because farmers have reduced food production and increased fuel-crop production. The same can happen with sunflowers, rape/canola and other grains. I was all in favour of bio-diesel when I first heard of it- now I'm not so sure.