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Why Bush failed to reach a deal on ethanol with Australia

Filed under: Ethanol, Legislation and Policy


The video above is a collection of blunders Bush made in a speech at APEC. Bush may have also made another blunder by failing to reach an international deal with Australia on ethanol. There were rumors Bush would invite Australia to join an ethanol partnership at APEC. According to one Australian MP, the failure has to do with economic protectionism and America's use of an inefficient feedstock (i.e., corn).

Here are the exact quotes by Australian Regional Development Minister Tony Kelly on why the rumored trade deal failed:
  • "The ethanol industry can create an enormous number of jobs in rural and regional NSW, and how that can come under threat if we do some deal with America."
  • "The ethanol that's produced by the Manildra Group at Nowra is much better for the environment than biofuels or ethanol that's produced by corn in the US because what the Manildra Group use is the wheat starch waste and that leads to some 37 per cent reduction in greenhouse gas emissions."
95 percent of American ethanol comes from corn. America has yet to develop production of cellulosic ethanol which has feedstock derived from biomass, forestry waste, etc. I don't think Australia rejecting a trade deal is a bad thing. Why are we going to a country on the other side of the planet for ethanol? Why not someone a little closer to home, with lower energy requirements for transportation, like Canada or Mexico?

[Source: ABC News]

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