Biofuel Investment in Australia `Inadequate,' Caltex CEO Julian Segal Says

Caltex Australia Ltd., the nation’s biggest oil refiner, called for increased government funding to spur biofuels development as part of an effort to curb greenhouse-gas emissions and bolster energy security.

Australia has “inadequate funding” for biofuels, with the government devoting just $15 million to the technology, Julian Segal, chief executive officer of Caltex, said in a speech in Sydney today. The U.S. Department of Energy by contrast is investing more than $1 billion to advance the field, he said.

“The determination of countries like the United States and China to find sustainable solutions to liquid energy supply should not be underestimated,” he said.

Caltex, the Australian refiner half-owned by San Ramon, California-based Chevron Corp., plans to sell a new “high ethanol-content” fuel later this year, Segal said. Australia must have policies to encourage alternative fuels, he said.

Segal, who became CEO in 2009, told reporters Caltex would consider acquiring refineries in Australia if they were up for sale and “if it made economic sense.” He declined to comment on Caltex’s outlook for refining margins.

Royal Dutch Shell Plc, which operates the Clyde and Geelong refineries in Australia, may sell its “downstream” assets in the country, Goldman Sachs JBWere said yesterday.

BP Plc runs the Kwinana refinery in Western Australia and the Bulwer Island plant in Queensland. The London-based company plans to sell as much as $30 billion of assets over the next 18 months to cover costs from the Gulf of Mexico spill.

To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net.

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