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 Mahamad Rodzi Abdul Ghani
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 Green Option
 'Free Trade' Descends on Biofuel Arena

21/3/07 (Green Option)  -  Under a memo of understanding signed earlier in the day by U.S. Secretary of State Condoleezza Rice and Brazil Foreign Minister Celso Amorim, the two nations pledged closer cooperation on researching alternative energy production, promoting alternative fuels in the region and developing industrywide standards and codes that could lay the groundwork for a global biofuels market. . . . . .The United States and Brazil expect to support feasibility studies and technical assistance in partnership with the Inter- American Development Bank, the United Nations Foundation, and the Organization of the American States.
"If we fund projects to produce biodiesel and ethanol in poorer countries, and then the richer countries buy biodiesel that's produced there, then we'll see that investments put into those countries have produced results, and even more important, generated jobs," President Lula said.

Have we heard this one before or what?

Soon after this agreement, the United Nations announced the formation of an international biofuels forum intended to “help countries with agricultural potential to become major suppliers of alternative fuels” and provide a forum for an "alternative fuels market". Through regular meetings, the forum is also expected to “help set industry standards, and eventually work toward the commodization of biofuels”.

I have a really bad feeling about this. The "first world" already does an excellent job exporting ecological problems to maintain ultra resource-intensive lifestyles. According to the January issue of National Geographic, 'market forces of globalization' are already destroying Brazil's rain forest. Brazil boasts the world's largest supplier of soy, the "King of Soy" Mato Grosso, who also led Brazil in Amazon deforestation for the third straight year (Nat'l Geo, p. 61). It's expected that within the next 2 decades, 40% of the Amazon will be destroyed and a further 20% degraded. Clear-cutting the rest of the Amazon basin to maintain (and even increase) current levels of oil consumption is as repugnant as it is short-sighted.

Biofuels have proven themselves a mixed blessing, dependent upon production scale and feedstock, among other factors. Massive-scale biofuel production, like that seen in Brazil and Malaysia, is dangerously lucrative: producers may profit immensely at the expense of the environment and local communities, and consumers may unwittingly purchase falsely labeled ‘green’ fuels that cause more harm than good. The argument could be made that the enormous profit potential of these fuels could boost revenue in areas desperately needing infrastructure and basic services. Yes, this argument has been made before as well, but I have a hard time believing that any of this money will get back to those that need it most.

After the initial agreement, the US defended its agenda against widespread criticism that it was as attempting to control Brazilian ethanol production (2):

The White House dismisses talk that the ethanol agreement between Bush and Silva is aimed at setting up an "OPEC of Ethanol" cartel led by Washington and Brasilia. Bush said he wants to work with Brazil, a pioneer in ethanol production for decades, to push the development of alternative fuels in Central America and the Caribbean. He and Silva also want to see standards set in the growing industry to help turn ethanol into an internationally traded commodity. "It's not about production-sharing, it's about encouraging development and encourage the Caribbean and Central American countries to get into the game," Bush's national security adviser, Stephen Hadley, said.

Get into the game? If that means the game of supporting US oil consumption while enriching large agribusinesses, count me out.

Don’t get me wrong, I like the idea of increasing biofuel production in lesser-developed countries, as long as it doesn’t come at the expense of local ecosystems. I’ll write more about this next week. However, trading biofuels as an international commodity ignores another problem: production. No country I’m aware of has the natural resources or capacity to manufacture enough biofuel for its domestic needs. Massive increases in Brazilian ethanol production may enrich some sectors of the economy, but may come at far greater ecological costs. Sugarcane produces more energy per unit of energy input when compared to corn-grain ethanol, but still falls short of meeting demand (3):

Brazil's method of producing ethanol is better than the American way, Silva suggested, noting that sugarcane-based ethanol is far cheaper to make than corn-based ethanol, and warm-weather climates like Brazil are the only places where sugar cane thrives. But neither country produces enough ethanol to meet growing domestic demand. . .

Why doesn't Brazil just keep the ethanol for themselves? Just about every country in the world spends enormous sums of money on oil imports each year, and perhaps those with a 'biofuel solution' should not be so eager to send it elsewhere (Please forgive the large quotes, but I found this really interesting. Please see the full article for more information). (4):

Yet an even more important question looms: Is it a good idea for a developing country like Brazil to export the biofuels it produces? Biofuels have helped Brazil displace oil imports and limit the price volatility they face in the petroleum market. Meanwhile, the domestic market for biofuels in Brazil is not close to being satisfied and energy advocates there understandably want to keep their own fuel at home. Beyond that, many Brazilians believe it would be unfair for the U.S. and European countries to place their ever-increasing fuel demand on Brazilian shoulders, instead of cutting wasteful energy consumption and global warming pollution in their own countries. . .
. . .The magnitude of [the] demand is staggering. If the U.S. moves to meet a substantial proportion of its fuel needs from biofuels—as the Bush administration is proposing—the pressure to import ethanol and other biofuels will mount rapidly, reaching quantities far beyond what Brazil currently produces. Providing biofuels to meet just 10 percent of current U.S. gasoline consumption would require multiplying Brazil’s already sizeable ethanol production five ties over. Expanding Brazil’s biofuel industry on such a large scale will create serious environmental and social problems. In Brazil, much of the expansion of ethanol production to meet U.S. and broader international demand is likely to take place in environmentally sensitive areas. One of these critical areas is the cerrado , the enormous Brazilian savannah, which is one of the most biologically diverse areas in the world. And the environmental damage would not stop there if biodiesel demand is added to the mix. The spread of soy plantations to produce bio-based diesel fuel will exacerbate the intense pressure on the Amazon rainforest as the forest frontier is pushed back further and further. Not only will precious land and forests be lost as biofuels production grows, but the leveling of trees and grasslands will also release large quantities of greenhouse gases into the atmosphere, further fueling global warming. As Brazilian organizations have pointed out, the benefits of expanded biofuels production in Brazil would flow mainly to agribusiness corporations, and the growth of large-scale plantations will undermine family-based agriculture and the country’s land-reform process. Meanwhile, throughout much of the ethanol industry, labor conditions are substandard. A recent study of the sugarcane industry in Brazil documented the serious health impacts of their methods of burning sugarcane fields during the harvest process, as well as the decline by half in workers’ incomes over the past 20 years under a quota-based pay system.

Biodiesel production is big in other parts of the world, too. Concerns over Malaysian forest-clearing palm-oil plantations have prompted some to call the fuel "Deforestation Diesel" (5):

In promoting biodiesel - as the EU, the British and US governments and thousands of environmental campaigners do - you might imagine that you are creating a market for old chip fat, or rapeseed oil, or oil from algae grown in desert ponds. In reality you are creating a market for the most destructive crop on earth. Last week, the chairman of Malaysia's federal land development authority announced that he was about to build a new biodiesel plant. His was the ninth such decision in four months. Four new refineries are being built in Peninsula Malaysia, one in Sarawak and two in Rotterdam. Two foreign consortiums - one German, one American - are setting up rival plants in Singapore. All of them will be making biodiesel from the same source: oil from palm trees. . .
. . .In September, Friends of the Earth published a report about the impact of palm oil production. "Between 1985 and 2000," it found, "the development of oil-palm plantations was responsible for an estimated 87 per cent of deforestation in Malaysia". In Sumatra and Borneo, some 4 million hectares of forest have been converted to palm farms. Now a further 6 million hectares are scheduled for clearance in Malaysia, and 16.5 million in Indonesia.

Almost all the remaining forest is at risk. Even the famous Tanjung Puting national park in Kalimantan is being ripped apart by oil planters. The orangutan is likely to become extinct in the wild. Sumatran rhinos, tigers, gibbons, tapirs, proboscis monkeys and thousands of other species could go the same way. Thousands of indigenous people have been evicted from their lands, and some 500 Indonesians have been tortured when they tried to resist. The forest fires which every so often smother the region in smog are mostly started by the palm growers. The entire region is being turned into a gigantic vegetable oil field.

Before oil palms, which are small and scrubby, are planted, vast forest trees, containing a much greater store of carbon, must be felled and burnt. Having used up the drier lands, the plantations are moving into the swamp forests, which grow on peat. When they've cut the trees, the planters drain the ground. As the peat dries it oxidises, releasing even more carbon dioxide than the trees. In terms of its impact on both the local and global environments, palm biodiesel is more destructive than crude oil from Nigeria.

The idea of an international forum for biofuels, however, is not an entirely bad idea. International collaboration could impose environmental and social criteria for the projects it supports. Fostering development of local and sustainable biofuel production and technology sharing could have enormous benefits in many areas. I will touch upon one example next week.

We can only hope that US acts prudently, and involvement in this forum is not solely based on American interests.

Stay tuned for next Wednesday's post, which will discuss my recent trip to Honduras and thoughts on renewable energy production there.


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