ongoing creep in fuel prices, resulting from global demand, is a
problem which is not going to vanish any time soon. The pain it is
causing Australian consumers, and ultimately, the losses it will cause
the Australian economy, have seen a recent flurry of alternative energy
proposals. Ethanol, LPG, bio-diesel, wind farms… Whether viable or not,
these technologies have made the press.

What is perhaps most
remarkable is that the most obvious alternative energy solution simply has
not made the headlines in the current policy debate. Why the
policy debate continues to skirt around the issue of synthetic fuel produced from coal or natural gas remains a mystery.

this time the cost per barrel of synthetic petrol, and synthetic gas
turbine fuel, sits at about one half the cost of natural crude based
fuels of these types. The synthetic fuels are cleaner, due to the
absence of sulphur, heavy metals and other unwanted impurities.

The technology used to make synthetic crude oil from coal or natural gas feedstock is based on 1920s German Fischer-Tropsch techniques.
There is nothing new or unusual about synthetic fuels, which were mass
produced by the Germans 60 years ago, and more recently by South

China recently contracted a consortium led by South Africa’s SASOL to construct the largest synthetic fuel plant complex to date, intended to use coal. Canada
has been manufacturing a very competitive domestic synthetic crude oil
using oil shale as feedstock. The state governments of several coal
producing states in the US are currently raising investment funds to
construct large scale synthetic fuel plants. The US Air Force, the
world’s biggest consumer of aviation kerosene, is currently trialling coal-derived synthetic fuel in a B-52 bomber.

is ranked fifth globally in coal reserves, and second in the
Asia-Pacific, and is one of the world’s largest coal exporters. In gas
reserves, Australia was ranked 15th globally, but this will soon change
as the latest North West Shelf discoveries are counted in.

begs the question as to why synthetic fuels made from coal or gas have
not been a feature of the current alternative fuels debate in
Australia. This is despite Linc Energy’s ongoing trials in Queensland.

synthetic fuels made from coal, shale or natural gas are good enough
for Chinese, Canadian or American consumers, why are they being
resolutely ignored in Canberra?

The Federal Government has a
golden opportunity to take a leadership position in this debate and
actively promote the development of a synthetic fuels industry in
Australia. If they decide not to, it is only a matter of time before
enterprising State Governments understand what is happening in the US
states, and walk away with the political kudos, and votes, which will
result from doing the obvious.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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