NCPA - National Center for Policy Analysis


May 3, 2007

Palm oil's attractiveness is that it is relatively cheap and can be used in existing power stations.  It is even said to be "carbon-neutral," in that it absorbs as much carbon dioxide during growth as it emits when burned as fuel.  Certainly the European Union likes it, with palm oil consumption fueled by subsidies in many EU member states; EU imports have risen 65 percent since 2002.

A four-year study in Indonesia and Malaysia, where 85 percent of commercial palm oil is grown, by a team from Wetlands, Delft Hydraulics and the Alterra Research Center of Wageningen University, details the environmental harm caused by the use of palm oil as an alternative energy source.  The researchers found:

  • Some 1.4 billion tons of carbon dioxide go up in smoke every year from rain forest fires set to clear new land for biofuel plantations.
  • Another 600 million tons seeps into the air from drained peat swamps; that 2 billion tons of CO2 constitutes 8 percent of the earth's total fossil fuel emissions.

In the United States, the alternative fuel du jour is ethanol.  It can be made from corn or sugar or perhaps even wood chips.  But here too there are consequences to its use that may exceed any benefits:

  • Ethanol consumes more energy in its manufacture than it produces when consumed, and it is difficult to transport and evaporates easily.
  • Using virtually all available land to produce an ethanol crop like corn would make only a small dent in our energy mix and by competing with crops grown for food, raises food costs.
  • Another consequence is that 200 more people would die each year from respiratory problems if all U.S. cars ran on ethanol; most of these additional deaths would occur in Los Angeles.

Source: Editorial, "Fuels Rush In," Investor's Business Daily, May 2, 2007.


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