Asked about hydrogen, CSR Ethanol general manager Gavin Hughes said bulk hydrogen is estimated to be 15-20 years away, but it was also suggested from the floor that it has been that far away for the past 15 years.

The speakers spoke at length about 2nd Generation Ethanol – which is the cellulosic ethanol made from plant residue - cereal straw or bagasse.

The Brazilian sugar industry has factories producing ethanol from bagasse.

It is put into a digester where enzymes convert the cellulose to simple sugars, which are then fermented to produce ethanol, but the enzymes are very expensive making the cost of ethanol 70c-90c/litre which equates to and oil price of US$70-105 barrel.

However there are 26 experimental plants around the world where scientists are trying to find ways of reducing the cost of cellulosic ethanol, including the Queensland University of Technology, where they say they are only a couple of years away from producing sugarcane with the ability to produce its own enzymes, which would revolutionise the cost of production.

Australia produces around 7.5 million tonnes of bagasse and that could make 1670 megalitres of ethanol and probably double that quantify if high fibre cane varieties were grown.

The conference heard that even if producing cane that contains enzymes became universal, the world couldn’t grow enough sugarcane to replace oil.

Caltex product marketing manager Michael Ridley-Smith made a number of points regarding marketing the unleaded petrol and ethanol blend, e-10.

Each blending plant (to put the ethanol into the petrol) costs $4 million and to convert a service station tanks to retail e-10 costs another $500,000.

As Caltex owns 360 service stations the company commitment to e-10 had been substantial, especially when ethanol supply is limited and there is still public concern about using the fuel.

Globally the only two countries using significant quantities of ethanol are the USA and Brazil, both of which have it mandated.

Kingsman’s global ethanol analyst Alister Smith pointed out the economic crisis had reduced the public use of vehicles in the US and consequently demand for fuel had dropped.

There was an oversupply of ethanol production capacity in the US and the world price of ethanol had fallen, consequently Brazilian millers were using more of their cane juice to produce sugar.

However he said he expects by the end of the year, with the rise in the oil price, ethanol will again be competitive and that could reverse the situation in Brazil, which would help keep the sugar price up.

The Director of the NSW Government Office of Bio-fuels Greg McDowell spoke about the ethanol program which in 2006 set in progress a gradual mandate for ethanol in petrol to reach e-10 in 2011.

By September 2008 it had reached two percent. That didn’t mean all petrol contained 2pc ethanol, only that the ethanol in e-10 represented two percent of the regular unleaded sales.

Even in 2011, premium unleaded will remain 100 percent petrol to enable people with older vehicles or those worried about ethanol to continue to buy 100pc petrol.

General Motors Holden energy and environment director Richard Marshall stated 96pc of the world’s transport runs on oil and it is estimated that to find enough oil to continue to supply the increased demand when peak oil is reached, will require an investment of around US$6.3 trillion, which means the cost of fuel will rise substantially.

GM is facing the problem to reduce in two ways: by producing more energy efficient engines and transmissions and by diversifying the energy source that drives transport by embracing: ethanol, bio-diesel, LPG, electric, hydrogen and hybrid technology.

Mr Marshall said like the transition from sail to steam, which took 50 years, all the new and different technologies will co-exist in the market place at the same time.

And although GM is researching all fuel sources, its major thrust in Australia is with e-85 Flex-Fuel vehicles, because ethanol is clean burning, renewable and requires the minimal amount of expenditure to modify vehicle production.

Also with 2nd generation ethanol, the use of e-85 fuel could reduce Australia’s demand for petrol by as much as 30pc by 2030 and even further when 3rd and 4th generation ethanol comes on stream.

GM has produced four million of the seven million Flex-Fuel cars currently in the world, so the technology is well proven and next year it will be producing Flex-Fuel e-85 Holdens at the Elizabeth plant in South Australia for the Australian market.

To cap of the ethanol debate, the CEO of the Australian Lung Foundation, William Darbishire, said ethanol had a number of health advantages: it is non-toxic, water soluble and highly bio-degradable.

And the use of e-10 would reduce by 50pc, the fine particles from vehicle exhaust that penetrates deep into the lungs causing breathing disorders and cancer.