Is the day approaching when countries around the globe will switch from oil and natural gas to biofuels? Some already are touting the switch, but it could prove costlier than they think. Consider Indonesia, a member of the Organization of Petroleum Exporting Countries, where state-owned electricity company PT Perusahaan Listrik Negara (PLN) plans to operate biofuel-fired power plants next year.
With a combined capacity of 58 Mw, the plants-to be built in several regions such as Lampung, West Nusa Tenggara, East Nusa Tenggara, and South Kalimantan-would use palm oil as their main energy source.
Alhilal Hamdi, chairman of Indonesia’s National Biofuel Development Team, who is also president of PT PLN’s board of commissioners, said the plan was part of the company’s efforts to maximize the use of alternative energy sources in its operations. “PLN will reduce its dependence on oil in stages,” he said.
Exports rising
Consider Malaysia, where experts are projecting 1 million tonnes in biofuel production next year for export, more than double the production of this year’s 400,000 tonnes.
Malaysian Palm Oil Association (MPOA) Chairman Sabri Ahmad explained that the demand for biofuel in Europe and the US was expanding rapidly in line with the requirement for more environmentally friendly energy.
At the launch of the International Biofuel & Alternative Energy Conference on Dec. 5, Sabri said that by 2012 Europe would require 10 million tonnes/year of biodiesel compared with 4 million tonnes/year currently. Consider the Philippines, where both chambers of the legislature have passed a bill mandating vehicles to run on environmentally friendly biofuels. The legislation mandates the use of biofuels by blending 5% bioethanol with gasoline within 2 years after the law takes effect and 1% biodiesel with diesel within 3 months after it takes effect.
Competing with food
Philippine Senate Minority Leader Aquilino Pimentel Jr. said the bill will “start the beginning of our cutting of the umbilical cord of dependence on imported fossil fuel from the Middle East, and it will start the cleansing of the environment from polluted air.” It also will boost employment, he said.
While such countries are touting the new industry, biofuel still has adverse effects that are only beginning to emerge.
In China, for example, grain is getting as expensive as oil due to demand growth for corn and other crops to be used to generate biofuel instead of for food.
“We predict that agricultural products will be as hot as petroleum in the future,” said one trader at the Dalian Commodity Exchange, where corn prices jumped 19.5% in October and last month to reach a 10-year high.
Of corn, Wang Jinmin, a professor at the Chinese Academy of Agricultural Sciences, said: “With its increasing role as a crude oil substitute and environmentally friendly energy, prices are unlikely to drop in the long run.”
