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Transcript
Federal Minister for the Environment and Heritage
The Hon Dr David Kemp, MP

Doorstop
Wednesday 11, December 2002

Subject: Ethanol in Petrol


DR KEMP
Thank you for coming to this doorstop. I wanted to clear up first of all the nonsense that appeared on the front page of the Sydney Morning Herald this morning and secondly to make some comments about the nature of the scientific study that the Government is undertaking into ethanol blends in petrol.

Firstly let me make the point that the claims that were made on the front page of the Sydney Morning Herald are absolutely unsubstantiated in relation to ethanol. The Labor Party has been going around the country this morning scaring motorists quite unnecessarily in states where there are in fact no ethanol petrol blends at all or where it is subject to close regulation by the state government.

The real issue is why the Carr Government has not acted during the last eight years to require petrol retailers to inform motorists in NSW what the ethanol content in their petrol is so that motorists are in a position to make a judgement. Two months ago I directly advised Bob Debus that the NSW Government should be taking action to inform consumers.

The law to protect consumers is in the hands of the states. The states have the capacity to require retailers to inform customers about the ethanol content in petrol. NSW has not acted. Ethanol at 20 per cent blends has been available in NSW for some eight years. Ethanol is a renewable fuel. It is used in a variety of blends. It is sold at 10 per cent in Queensland. It is not allowed in South Australia. It is used at a level of 100 per cent to fuel buses in Victoria.

Consumers are entitled to know what the ethanol content of the fuel they are buying is. Why has the Carr Government failed to act to establish a regime in the way that South Australia has done or Queensland has done? And I call on the NSW Government again as I did two months ago at the Ministerial Council meeting to take action to ensure that proper information is provided to consumers.

The second thing I want to say is that the report that was referred to on the front page of the Sydney Morning Herald this morning is a literature review preceding the scientific study that the Government has got underway. That report is not a secret report. It has been circulated to all relevant stakeholders and today I am making that report available to the general public. The Government is determined to pursue this issue in a completely transparent way.

Last year we undertook to conduct the necessary studies to establish national fuel standard. We've sought information about the impact of different ethanol blends on cars from the industry. We've so far received no scientifically based evidence whatever that would allow the Government to act. The scientific studies that the Government has put in place are designed to provide that scientific basis. The literature review that was referred to in a very distorted way on the front page of the Sydney Morning Herald this morning makes it clear that there is a great deal of uncertainty about the impact of E20 blends on motor vehicles and that this justifies the testing regime that the Government has put in place. In other words, this report fully justifies the Federal Government's action to establish a scientifically sound basis for a national fuel standard. The Government is going to establish that standard and we are going to ensure that it is set at the correct level.

The key point is this: consumers can be protected today from any uncertainties by the actions of the Carr Government in NSW. This is a NSW issue. It is not an issue in other states. The Labor party is seeking to misrepresent the situation and imply for example that consumers of petrol in South Australia should be worried about the ethanol content of their fuels. Now there is no ethanol content in South Australia because that is prohibited under the state regimes. In Queensland there is a satisfactory regime in place under which consumers are advised that they may be buying ethanal content up to 10 per cent. NSW which has had E20 blends on sale for the last eight years has taken no action whatever in the course of that time and now that consumers are clearly wanting to know, and I believe they are entitled to know, the relevant state government, which has got the authority to do so, should ensure that the consumers receive the appropriate information.

QUESTION
Dr Kemp, in allowing that this is a literature review it is quite clear in some of its observations ‘perishing and swelling of (inaudible) plastic materials making up the fuel system is highly likely in the older vehicle fleet when exposed to E20. That's a fairly clear finding

DR KEMP
Well it is a very clear conclusion of this report that there is very considerable uncertainty about what the effects are on the Australian car fleet. In the eight years that E20 blends have been on sale in NSW there has not to my knowledge been any reports of problems in the operability of cars or any motor vehicle warranties voided. So there has been eight years' experience now in NSW and during that time there have been no reports coming forward to petrol retailers or to the Government that would enable any conclusion to be drawn that the Australian car fleet is being damaged by this. But this is a matter on which there is debate and therefore that is why the Government is undertaking the scientific studies to determine what is the correct situation between these competing claims. We want to get to the bottom of these competing claims and that's why the Government is taking the action that it is doing.

QUESTION
There doesn't seem to be a lot of competition about the claims, with respect. Gilbarco the company which produces 80 per cent of Australia's petrol bowsers they refused to honour warranties (inaudible) above 10 per cent ethanol. Joining almost all car makers, motor manufacturers for outboards, pumps, consumer associations, motoring associations. Wouldn't the prudent thing be to have a 10 per cent limit at least on a temporary basis until these studies have been done?

DR KEMP
There are a lot of interests of course involved in this. What is relevant is what is the truth of the matter and the Government has approached the major vehicle manufacturers and asked for any scientific evidence based on proper testing, so that the Government can see what that evidence indicates and take appropriate action. These requests have been made over the last six months. They've been made directly to the leaders of major motor vehicle manufacturing companies and no such evidence has been provided to the Government. And as the report that I am releasing today makes quite clear there are conflicting claims that need to be sorted out and which fully justify a scientific testing program before the Government comes in and sets a fuel standard for the nation as a whole.

QUESTION
Given that there are so much at least preliminary evidence that there could be damage, are you saying the government is not willing to say to motorists, considering this possibility there should be a cap on ethanol because your cars might be damaged?

DR KEMP
This evidence, - overseas material, it is only opinion in many cases. It is not on the Australian car fleet and the study that I am releasing today clearly indicates that the testing by the Government, the scientific testing, is fully warranted by the level of uncertainty and the conflicting claims. The Government is determined to act in a completely transparent way on this. This report is not a secret report. We are putting it out into the public arena, people can make their own conclusions about the report. It is being taken into account as part of the study, but it is the basis of the scientific study, it is not a conclusion. What this report does is highlight the conflicting claims that are on the public record at the moment.

QUESTION
So the Government has no obligation to motorists to err on the side of caution.

DR KEMP
The Government has every obligation to motorists to ensure that if it sets a national standard, that standard is soundly based. The Carr Government in NSW has every obligation to motorists to make sure that they are properly informed about the content and nature of the fuel that they are purchasing. I made this point to NSW two months ago at the Ministerial Council for Environment Protection and Heritage. The NSW Government has not acted to date. I urge it to act to ensure that consumers have access to the appropriate information. This is a consumer protection issue - consumers are entitled to that information.

QUESTION
The Federal Government also has this information, don't they, through testing done by your department. Why don't you release that?

DR KEMP
The state government has the power to take the appropriate action. That power is in the hands of the state government. The Federal Government is doing, what it has the power to do and that is to conduct appropriate studies to determine what is the national fuel standard that should be set in place. The report that I am releasing today indicates that testing is necessary because there are many conflicting claims on the public record.

QUESTION
If motorists are informed that the ethanol content is higher than 10 per cent in the petrol that they can buy in whatever state they are in and the engine manufacturers are saying they will not honour warranties if petrol is used with more than 10 per cent ethanol, what should motorist be putting in their cars?

DR KEMP
Consumers naturally should be giving very close attention to the warranties for their particular vehicles. And they are entitled to the information that will allow them to make a judgement about the purchases that they make. The power to provide that information to consumers, to ensure that consumers, have that information is in the hands of the Carr Government in NSW. This is a NSW issue. These blends have been available in NSW for eight years. No action has been taken by the State Government to ensure that consumers have this information. Consumers ought to take very much into account the warranties that apply to their vehicles and they are entitled to this information.

QUESTION
(inaudible) … random checks of service stations telling you how many are selling ethanol blends and in what concentrations?

DR KEMP
As soon as the Carr Government acts to ensure that consumers have this information it will be absolutely clear which service stations are providing petrol with an E20 blend. Until that is put on the public record, till the Carr Government clearly acts, then that information is not going to be adequately available to consumers. Consumers need to know that at the pump.

QUESTION
(inaudible) you have a (inaudible) regime, don't you?

DR KEMP
The testing regime that we are putting in place is designed to allow us to set a national standard on an appropriate and scientific basis and that is what we are doing. And we're fulfilling our obligation to consumers as we said we would. But consumers can get information today if the appropriate Government which has the power requires retailers to provide that information to those consumers and then consumers will be in a position to ensure that they are complying with the warranty on their motor vehicle.

QUESTION
Will you be releasing the random study that you have done on petrol stations to show how much … which ones are selling ethanol and at what levels?

DR KEMP
I have already released the aggregate results of that. I gave that to the Ministers at the Ministerial Council and I am happy to provide that information as well. Thanks very much.

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