The Problem with Renewable Energy (no free lunches)

In this case, it's palm oil, which contributes to CO2 emissions, smog, and most importantly forest eradication and therefore the extinction of species. So when you drive that biodiesel car, are you really helping the environment? Maybe, maybe not, as this article illustrates. It's a topic defnitely worth thinking about and investigating in more depth...

From the Wall Street Journal:

PAGE ONE

Crude Awakening
As Alternative Energy Heats Up,
Environmental Concerns Grow
Crop of Renewable 'Biofuels' Could Have Drawbacks;
Fires Across Indonesia
Palm-Oil Boom Ignites Debate

By PATRICK BARTA and JANE SPENCER
December 5, 2006; Page A1

PONTIANAK, Indonesia -- Investors are pouring billions of dollars into "renewable" energy sources such as ethanol, biodiesel and solar power that promise to reduce the world's reliance on petroleum. But exploiting these alternatives may produce unintended environmental and economic consequences that offset the expected benefits.

Here on the island of Borneo, a thick haze often encloses this city of 500,000 people. The cause: forest fires that have blazed across the island. Many of them were set to clear land to produce palm oil -- a key ingredient in biodiesel, a clean-burning diesel fuel alternative.

At a new oil-palm plantation, the hillsides have been cleared and terraced.

The bluish smoke is at times so dense that it leaves the city dark and gloomy even at midday. The haze has sometimes closed Pontianak's airport and prompted local volunteers to distribute face-masks on city streets. From July through mid-October, Indonesian health officials reported 28,762 smog-related cases of respiratory illness across the country.
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This is particularly true for palm oil, a once-mundane commodity whose price has climbed about 31% so far this year. The spike is partly attributable to demand for biofuels.

In October, a European Parliament committee recommended a ban on all biofuel made from palm oil, citing fears that the crop encourages deforestation in tropical countries. In Indonesia, activists helped block an $8 billion Chinese-backed project that would have created one of the world's largest palm-oil plantations.

And last month, one of Britain's largest power companies, RWE npower, a subsidiary of the German power giant RWE AG, said it would abandon a project that was to use several hundred thousand tons of palm oil a year to generate power. An environmental group, Friends of the Earth, had complained that the project would contribute to unsustainable global demand for palm oil, contributing to rain-forest destruction in South East Asia. RWE npower said it dropped the project because it couldn't secure an adequate supply of sustainably grown palm oil.

Most consumers still think of palm oil mainly as a source of cooking oil. The oil is squeezed from bunches of red fruit that grow on oil palms, primarily in Malaysia and Indonesia. But the oil can also be processed to make fuel. Then it's mixed with conventional diesel to form a hybrid energy source -- for instance, 80% regular diesel and 20% biofuel -- that can be pumped directly into fuel tanks.

Biodiesel offers lots of upsides. Renewable crops such as palm oil reduce the need for fossil fuels such as petroleum whose supplies are finite. It also burns more cleanly than carbon-based liquid fuel, releasing fewer of the gases thought to cause global warming.

As oil prices have surged, a number of companies, including Chevron Corp., have announced plans to build or invest in biodiesel plants. In a recent report, Credit Suisse analysts said there's enough refining capacity under development to produce as much as 20 million metric tons of fuel annually by late 2008. That capacity, more than twice that of today's levels, would "easily soak up" all the world's available palm oil -- creating even more demand for plantations.
Indonesian authorities hope to capitalize on such demand to bring economic growth to impoverished regions. The government is offering low-interest loans for plantation companies, with a goal of adding 3.7 million acres of new plantations over the next five years, an area more than half the size of New Hampshire. Officials maintain this can be done on designated land areas without causing widespread environmental damage.

Different Outcome

But what's happening on the ground in Borneo suggests a different outcome. Among the world's most fabled islands, Borneo -- which is divided between Indonesia and Malaysia -- is considered by environmentalists to be one of the last great tropical wildernesses. It's home to rare and unusual species, including the wild orangutan, the clouded leopard and the Sumatran rhinoceros.
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Read more here.