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Taxation of on-farm biodiesel favouring fossil fuels

Neil Lyon, The Land (Australia)
Victorian farmer, Steven Hobbs, has been producing biodiesel and vegetable oil fuel from canola and mustard crops on his farm near Kaniva, in the Wimmera, for five years.

Mr Hobbs has set up a small processing plant on the farm where he crushes the oilseeds to make biofuel for his own use or to sell into the market.

“I am increasing my farm viability and profitability by incorporating lower cost farm inputs that displace higher cost farm inputs,” he said. “At the moment, I am only making small savings because I have to pay tax on all my production. “It frustrates me that the Government wants to tax the industry at a full tax rate before the industry has even had the opportunity to establish itself in Australia.

“The Government is effectively supporting farmers to continue using fossil fuel and not encouraging them to use renewable fuel.”

NSW Farmers Association fuel price task force chairman, Ian McClintock, said the association and other farm lobby groups were pushing for the excise and licensing constraints on biofuels to be lifted because they were impeding the development of the alternative fuel industry.
SOURCE: Extract from report in The Land, NSW, October 13
(13 October 2005)

Swell magnet stokes support for wave power
Simple generator pulls green energy from the ocean

Mark Peplow, Nature Online
A generator that produces electricity from the ocean’s swell has been unveiled, and its inventors hope that its simple design will beat existing wave-power technologies on efficiency and cost.

Engineers have tried a range of different techniques to tap the power of the sea, but none has yet seen large-scale use. Most rely on channelling water over turbines, pushing air through pipes or harnessing the gentle rocking motion of a buoy. Although prototypes have shown promise, scaling up these devices has proven tricky.

Hugh-Peter Kelly, the founder of Trident Energy, a small British company based in Southend-on-Sea, thinks his system might crack previous problems and allow wave energy to come of age. His invention uses the up and down motion of a floating buoy to move an electrical coil along a stack of magnets, which generates an alternating current in the coil.

“At a stroke you get rid of all the hydraulics that the rotary generators used by other wave power devices need,” says Kelly. This should make the device relatively cheap and reliable, he says. And as the generator only moves up and down it takes up very little space, so a number of them could be crammed into a small area.

In July, Kelly tested a one-fifth scale model of the generator in a large wave tank at the New and Renewable Energy Centre in Blyth, Northumberland. Results show that each full-scale generator should supply up to 100 kilowatts of power. The generator would have to be attached to a platform in the sea, rather like a small oil rig. That means more construction, but it would use well-established techniques says Richard McMahon, an engineer from the University of Cambridge who helped Trident to refine its prototype.

Kelly calculates that a wave farm covering at most 1.5 square kilometres would generate about 100 megawatts of power: the equivalent of a small power station. Trident’s floats would be the only thing exposed to corrosive salty water, as all the electronics are kept high and dry on the rig. And even the floats could be drawn up out of harm’s way during a storm by reversing the current through the generators and turning them into motors. …

But it may be many more years before the Trident system starts to put electricity into the national grid. “Power generation from waves is still in an early stage of evolution,” admits McMahon, much as wind energy was some 20 years ago. Only time will tell, he says, which design will prove best over the coming years.
(11 October 2005)

Thermodynamics And Money

Peter Huber, Forbes
In his day M. King Hubbert was a great geologist who spent his life studying the planet’s deposits of oil and gas. But as he got older, he simply lost it. His “peak oil” theory–which many people are citing these days–is a case study in junk economics.

Hubbert was born in 1903. By 1949 he had concluded that the fossil-fuel era was going to end, and quite soon. Global production would peak around 2000, he predicted, and would decline inexorably thereafter. By 1980 the aging Hubbert was certain that the impending crisis “was unique to both human and geologic history.… You can only use oil once. You can only use metals once. Soon all the oil is going to be burned and all the metals mined and scattered.” Indeed we would soon be forced to abandon our entire “monetary culture,” replacing it with an accounting tied to “matter-energy” constraints. An editor of Geophysics magazine summarized Hubbert’s views in 1983: “The science of matter-energy and the historic system of finance are incompatible.”

Today this same nonsense is often dressed up with numbers in an analysis that’s dubbed “energy return on energy invested” (Eroei). According to this theory it can never make sense to burn two units of energy in order to extract one unit of energy. The Eroei crowd concedes, for example, that the world has centuries’ worth of junk oil in shale and tar sands–but they can also prove it’s irrelevant. It takes more energy to cook this kind of oil out of the dirt, they argue, than you end up with in the recovered oil. And a negative Eroei can only mean energy bankruptcy. The more such energy investments we make, the faster things will grind to a halt.

…The economic value of energy just doesn’t depend very strongly on raw energy content as conventionally measured in British thermal units. Instead it’s determined mainly by the distance between the BTUs and where you need them, and how densely the BTUs are packed into pounds of stuff you’ve got to move, and by the quality of the technology at hand to move, concentrate, refine and burn those BTUs, and by how your neighbors feel about carbon, uranium and windmills. In this entropic universe we occupy, the production of one unit of high-grade energy always requires more than one unit of low-grade energy at the outset. There are no exceptions. Put another way, Eroei–a sophomoric form of thermodynamic accounting–is always negative and always irrelevant. “Matter-energy” constraints count for nothing. The “monetary culture” still rules.

Peter Huber is executive vice president of ICx Technologies, a fellow of the Manhattan Institute and coauthor of The Bottomless Well (Basic Books, January 2005). Visit his home page at
(31 October 2005)
Mr Huber does an excellent case of proving why market economics will drive us as fast as possible off the energy cliff. Yes it may well be economically rational to consume substantial amounts of natural gas and water to turn 2 tonnes of tar sands into 1 barrel of oil, but if he thinks that means there is no problem I suggest he try eating his paper profits, heating his home with them, or watering his garden with them.-LJ

German poll result hinders nuclear revival

Hugh Williamson, Financial Times
This was meant to be party time for Germany’s nuclear power industry. After seven years of a centre-left government that was proud to be anti-nuclear, industry executives had hoped last month’s election would provide a new lease of life for atomic power.

The reality is turning out otherwise. Angela Merkel, the conservative leader, failed to win the decisive victory that had been predicted, and that would have been necessary for her to implement her manifesto pledge to lengthen the operational life of the country’s 18 nuclear power plants beyond 2020, when they are due to be shut down under a law adopted by the government of the outgoing chancellor, Gerhard Schröder.

Ms Merkel is due on Monday to open coalition policy negotiations with Mr Schröder’s Social Democrats, with the latter under pressure to give ground on nuclear power. Yet Sigmar Gabriel, who is expected to become the next environment minister stressed last week, that the SPD “would not accept” the need for a review of nuclear policy.

Yet while executives at utility giants such as Eon and RWE have packed away the champagne glasses, there remains a sense of change in the air in the German energy sector.

“The high oil price has had many knock-on effects, such as pushing up the price of gas, increasing demand for coal, and encouraging many people to re-examine the wisdom of phasing out nuclear power,” says Claudia Kemfert, energy specialist at Berlin’s DIW economic research institute.
(16 October 2005)