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Dumb idea averted…but why Barry O’Farrell throught it was a good idea to start with is beyond me

January 31st, 2012 at 08:04am

I have to say that I’m happy that the ban on unleaded petrol is New South Wales has been scrapped, but I’m also a bit miffed that they came to the decision last night. If they could have just held on for another day, then I would have been able to get around to writing about how stupid I thought the idea was. You see, I was actually looking forward to the opportunity to prove that, on occasion, I disagree with politicians who are usually on my side, and I’m not afraid to take them to task over it.

Alas, Barry beat me to it.

PREMIER Barry O’Farrell has backflipped on his controversial ethanol policy, dumping a government ban on unleaded petrol due to begin on July 1.

The cabinet decided yesterday to dump the ban a week after the leaking of secret cabinet documents revealed that Energy Minister Chris Hartcher had tried and failed to get the ban dropped last month.

The dumping of the ban came after it was revealed Mr O’Farrell was proceeding with it despite advice to the contrary from Mr Hartcher, his department, the ACCC, the Crown Solicitor and two independent reports.

The ban on normal unleaded fuel was supposed to force petrol companies to make more E10 fuel to meet the mandate of 6 per cent of all fuel being made with ethanol.

(h/t Andrew Clennell of The Daily Telegraph)

To be completely upfront about this, the ban would not have affected me as I don’t use regular 91 octane unleaded petrol. I’m pretty sure (yes, mechanical me and my lack of mechanical knowledge) that my car is supposed to run on 95 octane petrol or higher, but apart from that I have had problems with previous vehicles which I put down to the 91 octane fuel. All that said, I do treat the 91 octane fuel as a backup measure if premium 98 octane unleaded petrol is not available and I need fuel. I refuse, absolutely refuse, to use the ethanol stuff.

In theory, ethanol-blended fuel is safe in modern vehicles, but as I understand it, the fuel is less efficient and so any cost savings at the bowser are quickly offset by the fact that you use more of the stuff. There was also going to be the spectacular problem that it was not going to be possible to produce enough ethanol to meet the demand, which would force the price up, potentially making the premium unleaded fuel cheaper than the ethanol-blended fuel. And then there were the strange exemptions which were going to be granted to service stations, allowing some of them to sell regular unleaded for short periods of time…a product which was not going to be manufactured because it would be almost impossible to sell due to the ban, and for which the logistics were never worked out as service stations would either have to keep an underground tank on standby for the regular unleaded or clean out the ethanol-blended tank for a day of selling the regular unleaded, after which they would have to clean it out again before putting ethanol-blended fuel in there.

Madness!

It was also part of a plan to reduce New South Wales’ carbon dioxide emissions so as to prevent mythical man-made global warming. More madness.

But to my mind, the biggest problem here was not all of that, but rather the fact that due to a poorly thought-out government policy, competition was going to be reduced, choice was going to be reduced, and the consumer was going to suffer.

I’m glad that Barry O’Farrell and his colleagues have changed their mind and scrapped this dumb idea. Now, on to my next question, why was the normally sensible Alan Jones in favour of this idea?

POWERFUL 2GB broadcaster Alan Jones has been revealed as having passionately lobbied the state government to stick with a 6 per cent ethanol mandate which marked the end of unleaded petrol.

The former Liberal speechwriter-turned-talkback radio host unexpectedly arrived with ethanol company boss Dick Honan to a meeting with Deputy Premier Andrew Stoner last November during which Mr Jones lobbied for the mandate.

The meeting occurred a month before Mr Stoner pushed successfully in cabinet against a proposal from Energy Minister Chris Hartcher to dump the mandate.

(h/t Andrew Clennell and Evelyn Yamine of The Daily Telegraph)

I assume it was an ill-conceived attempt to help farmers…but surely a conservative radio host should know better. Haven’t we learnt all that we ever needed to know about the perils of having governments pick winners and losers in industry of late? Even those with the shortest of memories could point to the multiple collapses of subsidised solar energy companies in the US as example of why we don’t support governments that want to do this sort of thing.

Entry Filed under: General News,Samuel's Editorials

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