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Alternative Energy's Dirty Little Secrets* By Karen Cerra AEA Issues Analyst Producing alternatives to petroleum to meet the world's energy needs has its ugly side too. Exploiting such alternatives such as ethanol, biodiesel and solar power may cause unintended environmental and economic consequences that offset the promised benefits. On the island of Borneo, Indonesia, a thick haze often engulfs the city of 500,000 due to forest fires blazing across the island. Forest fires are set to clear land to produce palm oil, an ingredient in biodiesel. The bluish smoke can be so dense that it leaves the city dark and gloomy at midday. Due to the haze, airports are sometimes closed and face-masks are distributed to the general public. Between July through mid-October of this year, Indonesia officials reported 28,762 smog-related cases of respiratory illness. The Indonesian forest fires spew millions of tons of carbon dioxide and other greenhouse gases into the atmosphere. Ironically, in order to produce "cleaner burning" biodiesel, we are adding to global warming emissions. Forests are being removed for new energy-yielding crops not only in Indonesia, but in Malaysia, Canada and elsewhere. Alternative fuels will put a strain on the environment including water resources needed for additional crops. Others predict that biofuel crops will compete with farmland acres and will eventually drive up the cost of producing food. In the US, corn-based ethanol production is not
without its critics. Cornell University professor, David Pimentel,
argues that expanding corn production for biofuels would deplete water
resources and pollute soils with added fertilizer and chemicals.
Production would also require the use of petroleum-based energy for
farming equipment and ethanol-conversion facilities, defeating the
purpose of harvesting alternative energy. According to New Energy Finance, a London-based firm specializing in analyzing renewable energies, investors throughout the world poured a record $49 billion into energies such as solar power, ethanol and biodiesel in 2005. That is a sixty-percent increase over 2004. However, commercializing many alternative fuels relies on political support in government subsidies or tax incentives. Local resistance to change could jeopardize the economic power of new fuels. In October, a European Parliament committee
recommended a ban on all biofuels made from palm oil since this crop
encourages deforestation in tropical countries. In Indonesia, activists
blocked an $8 billion Chinese financed project to create the world's
largest palm-oil plantation. In November, British owned RWE npower, a
subsidiary of the German power giant RWE AG, announced it would abandon
a project that would use several hundred thousand tons of palm oil a
year to generate power because the company couldn't secure an adequate
supply of palm oil. Palm oil is squeezed from bunches of red fruit that grow on oil palms primarily found in Malaysia and Indonesia. The palm oil is processed to make fuel and it is mixed with conventional diesel to form a hybrid energy source. Eighty-percent regular diesel and twenty-percent biofuel can be pumped directly into fuel tanks. Renewable crops such as palm oil reduce the need for infinite supplies of energy such as fossil fuels. Biodiesel also burns cleaner and releases fewer so-called global warming gasses. A number of companies, including Chevron, have
announced plans to build or invest in biodiesel plants. Credit Suisse
analysts state that by late 2008 there will be enough refining capacity
under development to produce as much as 20 million metric tons of fuel
annually. If this analysis is correct, that will be more than twice of
today's levels and it would easily consume all of the world's available
palm oil, thus, creating more demand for plantations. The upside is of course more economic growth for impoverished regions. The plantations have created jobs for the local populations and some have even taken ownership stakes. However, there is the dark side. The Indonesian government is offering low-interest loans for plantation companies to encourage adding 3.7 million acres of new plantations over the next five years within the country. Unfortunately, the new plantations may threaten what environmentalists say are the last great tropical wildernesses home to native peoples and to rare and unusual species. For example, according to the World Wildlife Fund only a little more than half of Borneo's once-ubiquitous forest cover remains today. In West Kalimantan, a province on the western coast, the palms covered 37,000 acres in 1984 and have now cover 988,000 acres. Plantations can alter water-catchment areas,
destroy animal habitats and contribute to the months-long haze as
described earlier. The fires burn the dry peat soil beneath the forests
and the centuries-old carbon trapped in the biomass are released into
the atmosphere. It was reported at the U.N. Climate Change Conference in
Nairobi in November, that Indonesia is the world's third-biggest carbon
emitter behind the U.S. and China when emissions from fires and other
factors are included. To find ways to solve these problems, a coalition of the palm-oil companies, environment organizations, energy companies and other groups have created the Roundtable on Sustainable Palm Oil to certify plantation companies that follow guidelines to minimize ecological damage. It's a start, but change is slow as we should not push alternative energy production if we cannot manage it. Let's hope we have the determination to tame the ugly side effects of run-a-way alternative energy production before the cure for "dirty" energy becomes the disease. *Taken from "Crude Awakening: As Alternative Energy Heats Up, Environmental Concerns Grow," by Patrick Barta and Jane Spencer, WSJ, Dec. 5, 2006. |