Delta-T ethanol expert helps Australian leaders avoid America's mistakes
October 1, 2003
BY Roger Moore
t was déjà vu all over again for Larry Johnson.
During his nine-day mission to Australia ending September 21, the Delta-T representative and long-time ethanol authority shared his knowledge of the American industry with Australian political and business leaders, including government ministers and about 30 Members of Parliament. He also reached the public by giving extensive interviews to journalists and commentators, appearing on five radio talk shows, at least nine newspaper stories, and six television broadcasts, including Australia's Today Show.
Even as he painted a bright picture of ethanol's promise, Johnson couldn't help flashing back two decades.
"I landed in Brisbane hoping I could help the Australians learn from America's successful model and avoid repeating our mistakes," he says. "I was amazed by all the similarities I saw between the current situation in Australia and the U.S. of 20 years ago. The opportunities–and the barricades–are nearly identical. What a terrible waste if they have to go through the years of frustration and wheel-spinning we did."
Larry Johnson, whose immersion in the production, marketing and public policy aspects of ethanol began in the early 1980s, is well-known for his role in developing the breakthrough "Minnesota Model" of legislation. During his September trip, at the invitation of the newly-formed Australian Coalition for Ethanol (ACE), he had the chance to observe firsthand the potential for their country to grow its own industry and to compare the current circumstances with his pioneering days. Here are some of the parallels he found between America then and Australia now:
-Ethanol is a highly charged political issue.
-Greatly expanding production of ethanol as an automotive fuel additive would benefit farmers, producers, marketers, the government and the general public for a variety of economic, social, national security, environmental and health reasons.
-The petroleum industry is understandably intent on killing any ethanol expansion because it's a threat to its total market dominance in petrol.
A government-mandated 10-percent ethanol blend for all engines would take 10 percent of the fuel market away from the oil companies.
-Some policy makers fear progressive ethanol legislation will be seen as serving wealthy special interests; there's a strong temptation to straddle the fence and have it both ways.
-Major oil companies are using their market control to discourage independent gasoline marketers from blending ethanol, which discourages the development of the ethanol industry.
-Misinformation abounds; the media feed on it and regurgitate it.
-Bogus studies–for example, citing harmful effects of ethanol on car engines-are scaring the petrol consumer.
-There's little understanding of the value added through processing and how agricultural products can bolster local, state and national economies.
-The nationwide auto club AAA is sewing confusion about whether using ethanol will harm engines or void warranties.
-Some engine manufacturers are reluctant to endorse ethanol for earlier models because they never tested engine performance or components with ethanol blends.
-The U.S. was in need of octane enhancement to replace tetra-ethyl lead and Australia will require higher-octane petrol by 2006.
-Under the pretense of the "consumer's right to know," another scare tactic is to label pumps to call special attention to ethanol (out of the hundreds of hydrocarbons in petrol), making it appear harmful or dangerous.
-For new dry-mill plants, it's hard to attract investors and debt financing despite eye-opening financial projections.
-Both countries are largely dependent on foreign oil and will realize strategic gains from diversified, domestically-produced energy supplies.
-Low agricultural prices continue to exacerbate the need for rural economic development.
-Industry growth and prosperity hinges on a federal government incentive: a 10-year exemption from the fuel excise tax, an amount of money equivalent to the U.S. incentive.
In contrast to these similarities stand two significant differences between Australia's present and America's past.
First is the awareness of air quality of an important issue. Americans made it a priority by passing the federal Clean Air Act and, in 1990, its amendments. Australians still haven't mandated air quality standards. Although the government has issued reports supporting biofuels, including biodiesel, the enabling legislation, including a 10-percent ethanol requirement and a 10-year excise tax exemption, hasn't become law. Johnson believes that once the government acts by passing the necessary legislation, it will demonstrate that cutting urban air pollution is as important as boosting the rural grain and sugar cane economy. And the requirement for clearer air will drive demand for ethanol production.
A second significant difference is today's process technology and construction standards. During the past 20 years, Johnson points out, Delta-T and other dry-mill ethanol plant process-design companies have made one technical breakthrough after another, continuously reducing the cost and increasing the efficiencies of making ethanol.
Australia can leapfrog twenty years of design and engineering development and land well into the 21st Century, immediately building large-scale plants with proven technology and known results. And when high environmental standards become part of public expectations, Australians won't have to worry. With today's technology they can build nearly emission-free ethanol plants, including zero process wastewater.
But Larry Johnson wasn't in Australia to sell technology. He was there as an ethanol ambassador, to help birth an industry which, only in time, after the government acts, the oil industry cooperates and the public understands the advantages of ethanol and supports it, will Australia build its dry-mill ethanol plants.
Johnson spent much of his time correcting misinformation, dispelling rumors and providing the basic facts about ethanol. Despite the distortions he continually encountered, the topic was surprisingly hot.
"Just before I arrived, somebody leaked a report to the press–obviously bogus–alleging that ethanol blends would damage up to four million Australian cars. You can imagine what reporters wanted to talk about. As a result, those four million cars became a focal point of most of the media interviews.
"Another report released a week prior revealed some rather large political contributions from Dick Honan of Manildra, the leading ethanol producer, to Prime Minister John Howard. As it would in America, a big campaign contribution can attract a lot of attention and speculation. So I even found taxi drivers and store clerks had heard of the ethanol issue."
Despite the blatant skepticism of Australian reporters, Johnson was pleased to find that the stories following his interviews cast ethanol in a mostly favorable light.
In his meetings with government and industry leaders, Johnson had access to key decision-makers and was able to listen, learn and make substantive recommendations. He recognizes that although much was accomplished in his nine days, "one trip is just one more step in a long journey" to a successful and prosperous ethanol business in Australia. EP
MINNEAPOLIS CONVENTION CENTER | MINNEAPOLIS,MINNESOTA
Serving the Global Sustainable Aviation Fuel Industry
Taking place in September, the North American SAF Conference & Expo, produced by SAF Magazine, in collaboration with the Commercial Aviation Alternative Fuels Initiative (CAAFI) will showcase the latest strategies for aviation fuel decarbonization, solutions for key industry challenges, and highlight the current opportunities for airlines, corporations and fuel producers.View More
GAYLORD OPRYLAND RESORT & CONVENTION CENTER | NASHVILLE,TN
Now in its 19th year, the International Biomass Conference & Expo is expected to bring together more than 900 attendees, 160 exhibitors and 65 speakers from more than 25 countries. It is the largest gathering of biomass professionals and academics in the world. The conference provides relevant content and unparalleled networking opportunities in a dynamic business-to-business environment. In addition to abundant networking opportunities, the largest biomass conference in the world is renowned for its outstanding programming—powered by Biomass Magazine–that maintains a strong focus on commercial-scale biomass production, new technology, and near-term research and development. Join us at the International Biomass Conference & Expo as we enter this new and exciting era in biomass energy.View More