Bio-fuel sense SLAMMING the oil industry for having the carbon footprint of a Yeti and warming the planet may be fashionable but any sane observer will place more faith in human ingenuity than on the ranting of eco-warriors. Last week, the sane among us would have taken heart at a report that was put out by Agence France Press. (Needless to say it was not published in any South African media). Chemists at the University of Wisconsin have figured out a more efficient way of turning plant sugar into liquid fuel. The method is cheaper, quicker and far more energy-efficient than standard fermentation and distillation. It also results in an alcohol that is less likely to absorb water. Stand by for commercialization. But, oh shucks, if this works, we will not run out of motor fuel, we will not fry the planet, we will continue to drive cars. What will the eco warriors then have to complain about? But I forgot, eco warriors are just like watermelons -- green on the outside and red on the inside. More seriously, our government should start talking to the university boffins in Wisconsin, rather than indulging in hare-brained schemes for growing bio-fuels in the Transkei.

It's a shortage of refinery capacity (and it's still all a plot)

People love conspiracy theories. It is always so much more interesting to believe that there is a cabal, a cartel, a shadowy group of powerful people, name them what you will, who control things. The oil industry has always been a favourite for conspiracy theorists -- even back when all the oil companies produced was grease and candles.

So, just when the penny has begun to drop that it is a more a shortage of refineries that causes increased prices of liquid petroleum fuels, not only a shortage of crude oil, back came the conspiracists to explain things.

The oil companies (clever bastards) began deliberately closing refineries in the 1990s so that there would be an artificial shortage of fuel so that they could charge higher prices.

See?

Rubbish. Refineries were closed because they could not make money any more; because they were old and cost too much to replace; and because although they were built when their neighbourhoods were empty of people , they were now surrounded by suburbs and the hassle of complaining neighbours was not worth bearing.

Plot, my eye.

PS: the Chevron refinery outside Cape Town was miles outside the city when it was built in the early 1960s, and rather well placed with the southeaster blowing away from the city. All the whingeing about it has been since cheaper housing surrounded it. Same goes for the Sapref refinery south of Durban. When it was built the land was a swamp and there were no people's homes in sight. But the land next to the refinery was obviously cheap so guess what? The Durban City Council surrounded Sapref with council homes.

Gas supplies in the Western Cape HERE we go again. There is a severe shortage of gas in the Western Cape. The Chevron refinery is having problems it will take at least a week to fix. Consumers are shouting "foul" and the media are printing the usual dial-a-quote source saying "Chevron needs to explain themselves (sic) to the industry and their consumers” Quite apart from the grammatical nonsense of this, the story once again betrays the almost total ignorance of the general public of which the newspapers are but an example. A refinery is not a simple machine that you can turn on an off like a tap. Building a new one costs about US4 billion or R30+- billion. Once built, it has to be maintained. That means shutting it down every now and then - otherwise it might blow up. Chevron refinery went down recently for routine maintenance but it took longer than expected to start up again. Nobody's fault, here. Yes, the refinery is old. Yes, in the best of all possible worlds it would have been replaced by now (it was built in the 1960s) but can you imagine the howl of protest from the members of our present government, then in exile, if Chevron had invested in a major upgrade back in the 1980s? We do need a new refinery in South Africa. That means removing the dead hand of Government from the oil industry, not more regulations, not more permits to operate and not more controls on prices. We know why they like interfering in the industry. It’s the amount of money sloshing around that pricks up ears and makes palms itchy.

More bio-fuels bull

GREAT news for motorists, I don't think! An expert has declared that bio-fuels could be a profitable industry if the price per litre was above R10. No prizes for guessing that the source of this wisdom was an economist. No prize either for guessing that the forum in which he was speaking consisted of a bunch of maize farmers. And here is the kisser: "For the bio-fuels industry to become a viable business, that will encourage investments, government needs to implement legislation that will help push petrol prices higher than these levels," he said. Hooray.

Bio-fuels bull

GENERAL excitement in South Africa bio-fuels tends to cover the subject in a fog of wishful thinking. Given the general belief that selling fuel is as complicated as selling rice or beans and we have a recipe for disaster.

The bio-fuels fairy story goes like this: Alcohol can be made from maize. We grow a lot of maize. Ergo, we can make a lot of alcohol. Alcohol can be added to petrol. Petrol comes mainly from imported crude oil. Since anything imported is bad because it costs dollars/pounds, yen and so on, we can save lots of money by growing our own fuel.

Voodoo Economics Like all back-of-cigarette-box economic calculations, this is simple and obvious enough. Reality is not. Quite apart from the fact that people eat maize meal and feeding people is more important than cheaper fuel -- assuming this thing can work economically -- we forget that drought is a regular feature of South African agriculture. The chances of dependable harvests year after year are slim. Ask any farmer. So, if it all works, we might have to import maize to feed our people while we grow maize to drive our cars. What a great idea!

But brush that all aside for a moment and look at the upside of the idea. Think of all the emerging small farmers in South Africa (we assume most are black ) who will now grow maize/ canola/jojoba/ other plants and sell it to ethanol distillers set up around the country. Nothing wrong with that says our man in the bar with the cigarette box and a ball point pen.

Hmm…. Will small farmers deliver maize to the alcohol distillers? How will they deliver? In whose tankers? How will they be paid? What will they be paid? Will they deliver once, get paid, get bored and then decide to "rest" for a while? This is Africa, remember. Small scale peasant farmers tend not to keep to industrial schedules. Some even say we do not have peasant farmers -- just large numbers of rural unemployed workers wanting nothing more than to abandon the hard grind of agriculture.

OK, it is a cynical view. Let's assume regular deliveries in sufficient quantity are made to the distillers. They can produce alcohol with the maize they get from small scale (black) farmers. What kind of alcohol will they produce? Will it be pure, 100 per cent proof alcohol? Or will it vary in quality? Who will collect it and take it to the place where it will be blended into petrol? Are there enough road tankers to do this job? Will these tankers be clean enough so that what leaves the distillery as 100 per cent proof, gets to the blending plant in the same condition? (Alcohol tends to absorb water from the air).

Does this mean we only hope the blenders will ensure that only the best gets put into petrol. Any BMW drivers out there still feeling confident?

Then how is the alcohol going to be added to petrol? Some say it is a simple process. "Splash blending" has been suggested. This means bunging in the alcohol at a depot before the regular petrol gets taken to the service station.

I wonder what that means for the guarantee on a new Beemer.

The Reserve Bank cares IT was so sweet of Tito Mboweni to care about the increased price of petrol. Earlier in June he was reportedly worried that persistently high oil prices were translating into higher petrol prices that "all of us have to suffer under". Absolutely right Tito, old bean, but how about this for an idea: why not persuade your mates in the Department of Minerals and Energy to persuade the Treasury to reduce the amount of levies and taxes plonked on top of the pump price. Right now it is about 38 cents a litre. Cutting that a bit would help us poor motorists.