Palm Oil -- The Southeast Asia Report

In an effort to broaden our coverage at The Oil Drum, this Southeast Asia report focuses on the tragic consequences of cultivating palm oil ( to produce biodiesel fuel.

Palm Oil plantation in Indonesia. Fires in background.

It is a sad story in which the cure is sometimes worse than the disease. When you see the magic, please pay close attention.

The two largest producers of palm oil are Malaysia and Indonesia. The oil palm grown in southeast Asia, Elaeis guineensis, is actually native to tropical Africa. Along with soybean oil, palm oil is a major world commodity. And, just like soybean oil, great plans are afoot to use the crops for biofuels. Here's what the article cited at top has to say —
So, why is it that oil-palm plantations now cover millions of hectares across Malaysia, Indonesia, and Thailand? Why has oil palm become the world’s number one fruit crop, trouncing its nearest competitor, the humble banana?

The answer lies in the crop’s unparalleled productivity. Simply put, oil palm is the most productive oil seed in the world. A single hectare of oil palm may yield 5,000 kilograms of crude oil, or nearly 6,000 liters of crude according to data from JourneytoForever [comparative vegetable oil yields per hectare]. For comparison, soybeans and corn—crops often heralded as top biofuel sources—generate only 446 and 172 liters per hectare, respectively.

Beyond biofuel, the crop is used for a myriad of purposes from an ingredient in food products to engine lubricants to a base for cosmetics. Palm oil is becoming an increasingly important agricultural product for tropical countries around the world, especially as crude oil prices top $70 a barrel. Beyond biofuel, the crop is used for a myriad of purposes from an ingredient in food products to engine lubricants to a base for cosmetics. Palm oil is becoming an increasingly important agricultural product for tropical countries around the world, especially as crude oil prices top $70 a barrel [written in April, 2006].

Comparative gallons/acre — Source: Mongabay
Figure 1

Some here at TOD will want to know the net energy yield of palm oil. There is little real information, although the EROEI for biodiesel is generally favorable. Some interesting remarks are available at biofuelwatch.

What we know is that, on average, biofuel crops grown in the tropics yield about five times as much energy as those grown in temperate zones.

Corn produces 145 kg of oil per hectare per year, sunflowers 800 and rapeseed 1000.

The tropical jatropha produces 1590 kg of oil per hectare per year, oil palms a full 5000.

This explains why, in a free market, we will have to rely more and more on imports from the tropics - even if were able to meet the official targets from European and US soils (which is, of course, questionable): our crops simply cannot compete with tropical ones.

There is very little scientific information about growing biofuels in the tropics, except for basic data on energy balance (i.e. energy input compared to energy yields). The life-cycle assessments which have been done for biodiesel and bioethanol in the US and Europe will not apply to the tropics:

1. A much higher energy and oil content from tropical crops means that the energy balance will be more positive for, say, jatropha or palm oil than it is for, say, rapeseed oil....

Please read this resource for additional details.

Pressures to expand palm oil production to grow biofuels have added "fuel to the fire", so to speak. Here are the major issues covered below.

  • Food versus Fuel, rising commodity prices
  • Destruction of rainforests, peat forests, CO2 emissions
  • Unsustainable monocultural agriculture
These issues are summed up nicely in two news stories. First, there is Alternative-energy boom roils Asian environments — originally from WSJ online, December 5, 2006 — and Concern for rainforest forces RWE to scrap palm oil project from the UK's Times Online. From the latter —
A leading German utility has abandoned plans to convert a British power station to run on palm oil, in a blow to the promotion of biofuels in Europe...

Widely used in processed foods, such as margarine, and in cosmetics, palm oil is burning bright on commodity exchanges. The price in Rotterdam soared to an eight-year high last week of $620 per tonne...

The Indonesian Government has signalled that 40 per cent of its palm oil crop will be designated for biofuel production in an attempt to reduce the country’s reliance on crude oil.

RWE npower had hoped that palm oil would produce electricity in a carbon-neutral process that would not add to greenhouse gas emissions.

According to a spokesman for RWE npower, the process works but the company was unable to guarantee that enough palm oil could be bought from sustainable plantations.

“There wasn’t enough palm oil that we could demonstrate was sustainable,” the spokesman said. “The bottom line is: are you contributing to global warming by chopping down rainforest?” The company hired independent auditors to establish whether palm plantations in Malaysia could be accredited to standards set by the Round Table on Sustainable Palm Oil, an organisation committed to promoting a sustainable palm oil industry....

Palm Oil Economics

As of January 29, 2007, the crude palm oil price for February delivery on the Bursa Malaysia Derivatives exchange was 1899 MYR/ton, where MRY abbreviates Malaysian Ringgit. The ringgit/dollar exchange rate is 3.50 : 1 — so the front month price is ≅ $543/ton, down from a Christmas spot (cash) price high of over $600/ton. Figure 2 shows the two-year trend.

Crude Palm Oil (CPO) prices, 2005 — 2006
Figure 2 — Click to enlarge

With rising CPO demand due to additional pressure on supply for biofuels, the upward price trend shown in Figure 2 is the expected outcome. Naturally, there are predictions that the CPO price will continue to rise.

Crude palm oil price in 2007 will likely rise on account of a high demand for the commodity in the world market when all the while its production capacity is not on par with the demand, an official said.

The possible high demand for CPO this year may come from India and China as well as European countries, Indonesian Oil Palm Businessmen Association (GAPKI) executive chairman Derom Bangun said here Tuesday.

"Today, in some countries CPO has not only become raw material in food industry but also in biofuel producing sector," he said.

He predicted Indonesia would produce 16.4 million tons of CPO in 2007 and the demand for the commodity may be greater than the production.

The higher prices are not without harmful effects on poor consumers. In the suspiciously titled article Food or fuel? The world has enough for both by Naveen Thukral and Sambit Mohanty, we learn what is happening.
"There is no shortage of edible oil at the moment but prices have been driven higher by this talk of biofuels," M.R. Chandran, an independent industry analyst and a former head of the Malaysian Palm Oil Association, told Reuters.

"It has already made palm oil out of reach for many people in India and China where purchasing power is less," he told the Reuters Global Biofuels Summit...

"I would think that there is enough palm oil in the world which can be used for biofuels and you could also have enough left over for the food industry," said a leading commodity trader who attended the Reuters Summit in Singapore.

It is good to know that we can have biodiesel from palm oil and, as a bonus, there will be enough left over for food, not to mention lipstick. Furthermore, the competitiveness of the palm oil biofuels industry depends on the conventional oil price, which is now comparatively low.
Industry experts said spiraling prices of vegetable oils against a backdrop of declining petroleum prices could weaken the competitive footing for the biofuel industry and slow expansion, freeing up availability for edible oils for the food sector.
At the current price quoted above, CPO costs about $74/barrel (using the standard conventional oil conversion 1 ton = 7.3 barrels). However, future prices could also fall if a lot more land is converted to palm oil plantations. Alternatively, the conventional oil price could rise enough to make palm oil competitive, even without subsidies. At this time, however, the price balance does not appear favorable for biofuels derived from palm oil. That could change quickly and many are betting that it will — back in July of 2006, conventional crude was $74/barrel and palm oil was going for $58/barrel.

The situation is complicated by Indonesian fuel subsidies. From the Christian Monitor's Faced with soaring oil prices, Indonesia turns to biodiesel

The dampening effect of the high cost of CPO on private investment in biodiesel in Indonesia [in July, 2006] is compounded by the low price of regular diesel sold in the country. Billions of dollars in government subsidies offset the high price of fuel bought overseas. Indonesian consumers buy some of the cheapest petrol in the world - around 50 cents per liter ($1.90 per gallon) for gasoline and diesel.

Indeed, the rising cost of fuel subsidies is what is spurring government interest in biodiesel.

"The government is looking for alternatives a lot right now," says Tara Khaira, a manager at EcoSecurities, a developer and trader of carbon credits on the global market. "The only real reason is to reduce the subsidies."

Indeed, the CSM goes on to note that "mass protests ... sparked by subsidy cuts" led, in part, to Suharto's ouster in 1998. So, Indonesia's government is spending money to build biodiesel refineries and develop new palm oil plantations. Both the Indonesian and Malaysian governments have set aside palm oil reserves for biodiesel, anticipating large future demand from the EU and elsewhere if conventional oil prices continue to climb. As of now —
Rapeseed oil now makes up between 80 and 85 percent of the biodiesel produced by the EU, with soybean oil and a marginal quantity of palm oil accounting for the rest.

"We may be the new kid on the biofuel block, but the demand from Europe itself will keep palm diesel going strong against any other rival," said S.J. Dhass, marketing manager at Bell Group, operator of Malaysia's largest private palm oil mill.

The EU imports about 3.5 million tonnes of refined and crude palm oil every year, chiefly from Malaysia and Indonesia, and could supply up to a fifth of EU biodiesel demand by 2010, Fediol, a vegetable oils trade organisation, said in May.

Some private investors are now scrambling to supply the nascent palm oil biofuels industry. At this time, southeast Asia's palm oil biofuels business is where Brazil's sugar cane industry was 10 or 15 years ago. Regarding the food or fuel problem, there is enough palm oil to go around for the time being, but the balance may change should an economically viable industry ramp up in future years. This will all depend on conventional oil prices or government policies subsidizing biofuels use or production through tax breaks or direct investments.

The Environmental Consequences

Even as Malaysia and Indonesia hope for a booming palm oil biodiesel export market, the EU is getting cold feet because of the destruction of southeast Asia's forests. Indeed, the environmental news is very bad. As the Wall Street Journal reports (op. cit. above), an EU parliamentary committee recommended a ban on all biofuels from palm oil. And, as noted above, RWE npower cancelled their plan to use palm oil to generate electricity in England. However, the EU now plans to use 20% renewable power by 2020, with 10% of vehicle fuels coming from biofuels. So, the EU is in a bind concerning biofuels from palm oil. Their Hobson's Choice is this — they can cut CO2 emissions and thus avoid disastrous climate change using biofuels from palm oil, or they can increase CO2 emissions and promote disastrous climate change using biofuels from palm oil. Perhaps there is much larger overshoot and sustainability problem?

For some background on the CO2 emissions from clearing peat swamp forests, see my story Burning Buried Sunshine. The WSJ article focuses on the environmental damage.

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, some of which were set to clear land to produce palm oil -- a key ingredient in biodiesel, a clean-burning diesel fuel alternative...

Among other problems, the fires set to clear forest land spew millions of tons of carbon dioxide and other greenhouse gases into the atmosphere, experts say. In doing so, they exacerbate the very global-warming concerns biofuels are meant to alleviate.

"Let's be brutally frank: (The push for alternative fuels) is going to cause significant changes for the environment," says Sean Darby, an equities analyst and expert on alternative-energy companies at Nomura International in Hong Kong. He is most worried about the strain on water resources caused by accelerated crop production. Water, he says, is "just as precious" as oil.

It's good to know that fresh water and oil are considered equally important. However, the WSJ mentions a study presented last November at a United Nations climate conference in Nairobi, which showed that Indonesia is the world's third-biggest carbon emitter behind the U.S. and China, when emissions from fires and other factors are considered. The press release, Shocking climate impact of wetland destruction in Indonesia, references Peatland degradation fuels climate change (MS Word document), which provides some of the details. From the press release — of the estimated 2 gigatons of CO2 emitted by deforestation in Indonesia alone:
600 million tons is caused by decomposition of dry peat (a process that will continue until all peat has disappeared) and 1400 million tons is lost through the annual fires.

These amounts change the global picture concerning carbon emissions. In the ranking of countries based on their total CO2 emissions, Indonesia comes 21st. However, if peatland emissions are included, Indonesia is ranked third. The country emits more than India, more than Russia, and several times more than the UK or Germany. It emits more than all the efforts of western countries to reduce greenhouse gases under the Kyoto Protocol.

And from the more detailed document — relating to palm oil:
Western countries see oil palm as a good source of biofuel, a ‘clean’ alternative for fossil fuels. The European Union implements all kind of legislation for a large scale use of biofuels. Export of palm oil to European countries is growing rapidly. However, more than 26% of all Indonesian oil palm concessions are on peatlands, and similar figures apply to Malaysia. It is estimated that production of one ton of palm oil will result in an average emission of 20 tons of CO2 from peat decomposition alone – not taking into account the emissions from fire and other CO2 emissions during the production cycle. The Netherlands alone imported at least 400,000 tons of palm oil to meet its Kyoto target for 2005, thus actually increasing [its] greenhouse gas emissions.
Whoops! Although these huge numbers would have to be verified by further study and fit into the overall planetary carbons emissions budget, there is little doubt that there are very substantial CO2 emissions from land use changes that destroy the rainforests and peat forests of southeast Asia.

Palm oil monoculture in tropical ecosystems has other harmful consequences. From the WSJ (op. cit) —

As residents are discovering, though, the spreading plantations have deleterious effects. They can alter water-catchment areas, destroy animal habitats and contribute to the months-long bouts of haze that spreads hundreds of kilometers across Southeast Asia.
Peat forest wetlands catch the rain and store the water. Without them, the water runs off, leading to erosion of precious topsoils and even freshwater shortages in some areas. Waste from palm oil production is also a problem. From (op. cit) —
Beyond the loss of forest ecosystems, the production of palm oil, as currently practiced, can be quite damaging to the environment. In 2001 Malaysia’s production of 7 million tons of crude palm oil generated 9.9 million tons of solid oil wastes, palm fiber, and shells, and 10 million tons of palm oil mill effluent, a polluted mix of crushed shells, water, and fat residues that has been shown to have a negative impact on aquatic ecosystems.
Finally, there is the tragic loss of Orang Utan forest habitat.

Threatened with extinction

A Note on Jatropha

Another tropical source of vegetable oil, jatropha, seems to offer many comparative advantages over palm oil.

Jatropha Beans — Source: Ecofriend

Europe Adopts Biodiesel: Can an African Bean Crack Europe's Biodiesel Blockage? is an excellent source of information.

One UK-based company, D1 Oils plc, has put itself at the forefront of efforts to fill this [EU biofuels] gap with Jatropha oil. Jatropha grows quickly, is hardy, establishes itself easily even in arid land, and is drought-tolerant, requiring only 300mm of annual rainfail. It grows especially well in South and West Africa, and South East Asia. Jatropha can even be grown on semi-arid land using waste water, making it a useful tool in the prevention of desertification. Each Jatropha tree can produce an average of 3.5 kilos of beans each year depending on irrigation levels. According to D1's estimates, if 2,200 Jatropha trees are planted per hectare, each hectare could yield up to 7 tonnes of beans per annum. Jatropha beans can produce oil yields of up to 40% and D1 expects each hectare to deliver about 3,000 litres of biodiesel.
For all these reasons, Jatropha looks promising as a biodiesel source.

Some Reflections

Now, it is easy for the EU, the Wall Street Journal and the author to take pot shots at Malaysia and Indonesia for attempting to lift themselves up economically by cultivating palm oil for biofuels. In fact, the Malaysian Palm Oil Council issued a rebuttal to some topics reviewed in this story. And although some of it is ridiculous, it does point out obviously hypocritical things like this —
Britain has little forest left, as most land has been converted to agriculture. Such a paucity of forest cover and the preponderance of agricultural land have resulted in reduced biodiversity and caused the loss of fauna and flora.

According to data from the Food and Agriculture Organisation, Britain has less than 12 per cent of its land under forest cover compared with 64 per cent for Malaysia. Agricultural land makes up 71 per cent of its total land area compared with less than 19 per cent in Malaysia, of which oil palm accounts for two-thirds.

In the 19th century, Europeans were despoiling southeast Asia for the rubber and timber trades. From the WSJ, peaking of Borneo —
In the 1800s, Dutch and British traders began carving up parts of the island to produce rubber and other commodities. Later, Malaysian and Indonesian timber barons devastated millions of hectares of forest logging tropical hardwoods. Today, only a little more than half of Borneo's once-ubiquitous rain-forest cover remains, according to WWF, the global conservation organization.
As a citizen of the United States — the world's largest natural resource consumer driving much of the planet's freefall — and largest abuser of the global commons, which is the environment upon which we all ultimately depend, I must add this apologetic to my criticisms of land use practices in southeast Asia. After all, people are just trying to feed themselves, raise their families and prosper economically as far as that is possible. Quoting the WSJ concerning Indonesia, "the arrival of new palm-oil plantations has meant jobs and opportunities for many Dayak families [of Kalimantan], and some have even taken ownership stakes in the operations." There are environmentalists in southeast Asia just as there are here among the NGOs in America — I have quoted some of them. At the same time, John Q. Suburban in the United States is just trying to feed himself, raise his family and prosper economically as far as that is possible.

So, in the short run, some will win, some will lose and everyone wants to live. Over the longer term, however, the underlying problem is too many people (wherever they live) consuming too much energy and other natural resources. Overshoot and unsustainable modes of living are not confined to southeast Asia, as any American should know.

Dave Cohen
Senior Contributor
The Oil Drum
davec @

Great Post. A story of robbing Peter to pay Paul. Good work.

Ditto. Thanks, Dave.

Each day it becomes more apparent that the final destination for this runaway train we are all on is catabolic collapse.

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Hello TODers,

My REDDIT post:

This is an excellent article documenting present day terra-forming into later terror-forming ecological devastation and unsustainability. Widespread Peakoil + Global Warming Outreach [which includes birth control education] is our best hope to offset this worrisome trend of raping the landscape. At the very minimum: these countries should be stockpiling the native seeds to help quickly reforest the lands once the palm oil industry becomes unsustainable due to topsoil losses.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Good and fair post. Overall it's even a little encouraging: there is such a thing as RSPO, Malaysia is at least "officially" committed to sustainability, and RWE npower took the trouble to get independent auditors and bailed when the results warranted it. I also appreciated Malaysia's poke back at the developed world. No question that all sorts of problems remain with palm oil and biofuels in general (I say this as a biodiesel user), but it is this type of scrutiny and demand for accountability which at least holds out hope that development can be done in a sustainable manner. And who knows, maybe it will remind those of us on the user side that there are no solutions which don't start with conservation.

Good article on jatropha, as well.

As a side note, IIRC palm oil is favored by the food industry because it's a saturated fat that remains liquid at room temperature (might be palm kernel oil). That is, it remains pliant while resisting going stale (oxidizing) so it's good for shelf life. The food industry is scary sometimes.

Great job Dave. Your post points out yet another example of the looming clash between choosing energy (for consumption) and the environment( for long term survival).

Ranchers in Brazil are also looking into palm oil, but largely keep planting soybeans even though they have a lower yield. Apparently the issue is that a new palm oil plant wont produce oil bearing fruits for many years, so its a back ended investment. As oil prices rise, the higher net present value of discounted higher yields will make planting palm in Brazil more attractive as well. (Im uncertain how much is there now - but I assume the climate/geography is similar to that in Indonesia, except it would be jaguars not orang utans)

The relatively high productivity of rapeseed, which is essentially the same as canola oil, is interesting because it is a cool climate crop grown in northern Europe and Canada. But the food conflict is even greater because it is a heart healthy fat.

Sorry to steer off course a little bit, but I don't think we should lose sight of problems related to energy development and environmental destruction in our own backyards. A few days ago, I posted a link to an article on the environmental, health, and cleanup costs associated with the boom in uranium mining on federal lands.

Today, as I was skimming the headlines on Carolyn Baker's website I saw a link to an article concerning the president's recent signing of a new directive giving the White House greater authority as gatekeeper for various agencies. Apparently, the target of this new legislation was the EPA and OSHA. Increasingly, government scientists are being effectively muzzled with a concomitant loss of scientific objectivity. It is very disheartening to see that in the highest levels of political office it is the economic interests that are taking precedence over health, safety, and environmental issues.

Thanks Dave,

A subject that deserves far more attention than it's getting.

Down the line, it just goes to prove that everything will necessarily get a lot worse before it might get better, Peak energy will be the mopst destructive force we can imagine, we just started. That is not coincidental, it's an inherent part of our economic system.

What the EU has to do, of course, is to ban the use of palm oil in the, IIRC, 40% of all products in supermarkets that contain it. Yes, it's exactly like corn syrup. And ban it outright in fuel. My bet, it won't happen.

You quote the WSJ saying "the arrival of new palm-oil plantations has meant jobs and opportunities for many Dayak families [of Kalimantan]", but we all know that is not how the system works. Don't worry about lost jobs for the Dayak, that is just a political spin argument, they'll be much better off if we leave them alone.

The enormous amount of added liquidity in our markets means that investments in palm oil will rise through the roof. Japanese investors borrow money at 0.5% interest, and plunge it straight into these kinds of opportunities. We in the US and EU have that power, but not if we want 20% biofuel in our cars.

Orang Utan means man of the woods. We are white men, of European descent, hence Orang Blanda.

But for the Malay language and its users of old, those who lived next to the woods, we are all men.

Palm plantations have been a disaster since the days Joseph Conrad wrote of them.
The already huge environmental damage comes from quantities of palm oil that barely effect European energy balances. Scaling this up is madness. The figures in your story are tons per year. Conversion to barrels per day should be enough to make anyone want to forget this foolish experiment.

"He predicted Indonesia would produce 16.4 million tons of CPO in 2007 and the demand for the commodity may be greater than the production."

1 ton expressed palm oil = 7.3 barrels of same (from Dave), so 16.4 million tons x 7.3 = barrels oil equivalent per year = 119,720,000, barrels less 10% for less energy content of biofuels = 107,748,000 barrels pa = 2,952,000 barrels 'bio-crude' a day.

*If* this rough calculation is about correct, Indonesian biofuel production is the equivalent of Canterells production in year 2005.

Canterell has peaked, and is in decline. One assumes, absent some virulent infestation of a viroid such as Kadang Kandang (affects some, but not all, palm species), there will be no 'peak palm oil', Hubbert curve.

Can't say that about the megafields.


Perhaps a longer term view needs to be looked at. A mature rainforest is at best carbon neutral. The years it takes for a palm to become productive which means it is absorbing CO2 into its wood. While silvaculture can be practiced in a dumb unsustainable way it could also be practiced in a smart sustainable way. Buyers could insist that palm oil be produced in the smartest ways if they are willing to pay an appropriate premium just as some folks pay a premium for organic foods.
Some questions:
How long does a palm tree keep growing? How much more would it cost to use rainforest trees for lumber over just burning them in situ? Could the trees be pyrolyzed into charcoal for terra preta use? What is the ratio of CO2 released from tree and peat burning to the amount of fossil CO2 displaced by using biodiesel produced over the lifetime of the tree?

The photograph looks like a scene from Hell.

The scale of the rain forest destruction on Borneo is just staggering!

I've posted a little animated gif on my blog:

A Virtual Plunge in Borneo's Deforestation

In 1997, the fires were so widespread that the smoke was reaching India:

Composit of Visible (R and G) and InfraRed (B) channels of GMS-5, showing 100E - 120E / 10N - 10S area with 1/20 degree resolution per pixel. The smog-covered area extends Borneo, Peninslar Malaysia, Sumatora and wider.

Cumulative map of fire pixels derived from the 13 nighttime AVHRR GAC scenes identified in the data of Figure 9 (July–December 1997). Each white dot represents a GAC pixel determined to have contained at least one active fire at the time of one or more of the satellite overpasses.

The scale of tragedy is trule immense. The Google Earth graphic on your webpage is distressing. You go good work, Khebab.

Isn't it unfortunate that the Universe's only intelligent primate is destroying what is (essentially) the Universe's only living planet?

The irony is that humankind is destroying ecosystems which have functioned successfully for millions of years on behalf of an economic system which cannot endure for another thousand years. Future generations will inherit a polluted, desolate mess. The money will become worthless, the wealth (and all of its trappings) erode away, and humans will find life hellish and short.

That's the price future generations will pay for this generation's reckless destruction of Nature. Nature will recover, eventually, but humankind will not.

David Mathews

Only intelligent primate? One might argue that some of the non-human primates are more intelligent than humans. They aren't destroying the Universe's only living planet.

In my university days, I took a few primatology classes, one involved many days spent watching the (non-human) primate species at the local zoo. This experience imparted me with a great deal of respect for these amazing animals. The experience was actually quite humbling. I couldn't help but feel apologetic for the amount of their habitat we've destroyed.

Hello Mark,

I agree with you. The other primates are amazing creatures. They put humankind to shame.

I encounter plenty of wild animals every day and am astonished by their fitness compared to humankind. On the hot days, the animals endure the heat without complaint. On the cold days, the animals endure the cold without complaint. The humans cannot endure the climate at all. We hate the heat, we cannot stand the cold, and many humans could not survive without the crutch of climate control.

Humans are unfit and unhappy, stressed and angry, violent and destructive. These are the predominant traits of humankind. I think that the Earth cannot help but become a better place without us. We aren't exactly improving this place.

David Mathews

Shocking level of deforestation in Borneo.

Right now, S. America lags far behind in palm oil production, but could this change? I don't know whether the growing conditions in the Amazon are suitable for a rapid expansion of palm oil production.

Interesting to note that the area of Borneo is 743,330 sq km and this is roughly equivalent to the area of Amazon deforestation since 1970. The Amazon rainforest area is 5.5 sq km and the rainforest biome is apparently a subset of this area (excludes savannah and natural fields) at 4.1 sq km. Using the latter figure, the deforestation level is approaching 20%.

Following the Brazilian government's new initiative to open up the heart of the Amazon to logging, I wonder if anyone has a good handle on what level of further deforestation we should be expecting for the Amazon. I realize that, besides logging, soybean and cattle farming are also contributing factors. The prospect of drought and forest fires is also worrisome.

Real strong agreement with the overshoot comment in this informative and timely post. No doubt in my mind that we will continue destroying the environment in a desperate attempt to maintain our high energy lifestyles, endless growth, and/or overpopulated numbers of people.

Don't know where you're going with this, but I do know that extreme poverty is just as destructive environmentally as excess affluence (never mind the social and economic inequality). In this particular case, we all know that palm oil is seriously problematic, even before it was a potential biofuel, but where criticism was harsh towards Malaysia a few years ago, they have made a real effort toward sustainability, and now the criticism is leveled at Indonesia. So perhaps I'm reading this post a bit differently from most. Expecting unrelieved disaster, there are actually bright notes here and there that weren't there just a couple of years ago. And good on Malaysia for committing to RSPO; I wish we here in the US would commit to sustainability.

Everything is context dependent. I absolutely agree that palm oil production has been and will continue to be very destructive in many places.

The net carbon flux from converting virgin forrest to palm oil plantation is about 200 tons per hectare (ASB 2000 Climate Change Working Group). This is about 65 years worth of carbon emissions from the same amount of fossil fuels that would have been saved, without counting any external inputs for cultivation and processing. This is a huge problem, I agree.

However, there is another side of the story. I am currently working on an oil palm project in the Democratic Republic of Congo. This country has about 227M hectares, of which half is arable. Only .7 percent of this is under cultivation. The natural palm forrest at one time covered 1M hectares (Corley and Tinker, The Oil Palm). Abandoned platations cover vast expanses. Our project plans to occupy only previously existing plantations, natural palm forrests, and land already slashed/burned. We expect to achieve a net carbon STORE from our efforts, rather than a release of carbon.

We do not plan to export, but rather concentrate on the local market. We don't plan to save the world, nor to alleviate any global effects of oil depletion. We do think that we can make a huge impact for a very small oil consumer that uses less than one barrel per capita per year. The DRC is unique - small population, huge amounts of arable land, and the oil palm is native. It all depends on the context.

Ty Burn in Seattle


What is the difference between palm oil and coconut oil. Do they come from separate plants? How different are the extraction/processing methods? What are the differences in cultivation?

Yes, Different plats. Have a look at the Malaysia Timber Forum or other sites. Oil palms have fruit bunches with hundreds of little fruitlets on them, red in conor, or almost black. Just google oil palm.

There is a fantastic article somewhere on the web about the Unilever soap company and the early days of the "Congo Free State" ( "Free" translates in this case as slavery and genocide). Palm oil has been the most important edible oil for a very long time.

I presume you are familiar with coconuts...

So there appear to be two different extraction methods for palm oil, one for pulp and one for the kernal, which result in 2 different products-a food grade and an industrial grade, if you will.

Is the plantation more of bush than tree enviroment-are the plants trimmed for production and harvesting ease ala an apple orchard? In a native state, are the plants tree size in stature? What is the typical understory in your plantations, or is this tilled or eliminated to reduce nutrientt competition.

Your project sounds great-a local solution to a local problem. I understand that a primary local use is for cooking fires, with oil replacing naptha. But who funds your work-later proceeds from crop sales?

I often hear of palm oil and coconut used interchangeably. I was never sure if cultural practices or human selection differentiated the two.

Palm Kernel Oil - yes two separate products. Kernel oil takes more equipment to extract than the oil from the mesocarp. Often hexane is used as a solvent. The other method is to use extreme pressures which implies a lower EROEI. I don't know much about this yet.

Plantations can be planted in many areas with varying conditions. It is entirely practical to cut down forrest and plant, if you want to. Much savanna land or forrest margins is also suitable. Forrests already cut by locals is also just fine. Mostly the existing abandoned plantations are where we will go - we only need a few hundred thousand hectares.

I have not seen palm oil used for fuel. The oil palm produces more dry biomass than any other plant that I am aware of (up to 50 tons dry weight per hectare) and so there is not much need to burn expensive palm oil - you eat that and burn the biomass.

The project is a biofuels project. It will be funded by investors and should have a very very good IRR. Local fuel prices are very high due to transport issues. We produce locally, avoiding the logistics to a great extent.

Excellent post. Destroying the Earth's biodiversity for the sake of the economy and profits in a longstanding tradition of humankind. Humans are an ecological disaster, we've pretty much destroyed everything within reach. Pollution and climate change will likely finish the job. These tragedies continue and will likely accelerate as humankind desperately attempts to maintain this unhealthy civilization as resources become depleted. The future is bleak. The apocalypse is occurring right now.

If you read the New York Times today you may have noticed that John Tierney has an editorial in which he is optimistic about humankind's (short term) future:

"Can Humanity Survive: Want to Bet on It?"

In fact, the wager I’d really like to make with Dr. Rees is that we’ll make it to 2100. I’ve posted that prediction on Long Bets, and I’d be glad to give him better odds than the 50-50 chance he gives civilization of surviving the century.

Which, incidentally, is a pretty safe bet. Short of an asteroid impact, humankind will almost certainly survive until the year 2100. Civilization might collapse, the technology age might become a distant memory or even a myth, but humankind will see the dawn of the 22nd century.

The bet become progressively riskier the further out into time you go. I am confident that Homo sapiens will still walk the Earth in the year 3107 A.D., but have serious doubts about humankind surviving until the year 12,007 A.D. Extinction within the next ten thousand years appears like a safe bet to me and it becomes a certainty within the time 10,000 - 100,000 year time frame. Of course, we won't live long enough to validate any of these guesses. But the last 10,000 years of human history tends to diminish confidence in humankind's ability to survive forever.

Civilization, of course, cannot possibly survive for another thousand years. Or five hundred. Or two hundred fifty. But there's a good chance that remnants of technological civilization might endure for at least another two centuries.

John Tierney has set up a bet. His optimism is overwhelmingly in the lead. I voted to the negative because I suspect that whomever is living in the year 2100 A.D. will find life extremely difficult and unpleasant. You can vote, too, if you wish. There's no penalty for error. If you live to the year 2100 no one will remember your pessimism, and if civilization does come to an end people will have more problems than they can handle so they won't mock your optimism.

Here is John Tierney's bet:

Note his argument:

I believe the best way to predict the future is to look at past trends -- the longest trends possible. And my reading of history is that humans have a longstanding habit of surviving. As the late Julian Simon pointed out in his refutations of doomsayers, there is a long-term trend of humans facing news problems and not just overcoming them but emerging better-off as a result. Our species now has more members living longer than ever before. It's always possible this trend will end abruptly, but I think the odds are against it.

I wonder what he means by "the longest trends possible"? I am looking at a planet which is 4.5 billion years old and populated by millions of species which are millions of years older than humankind. Homo sapiens have existed for one hundred thousand years, that might seem like a lot of time but it is not. Civilization has existed for ten thousand years, a long time relative to the human lifespan but almost nothing from the standpoint of geological time.

Our species will likely endure to the year 2100 A.D. but it appears increasingly unlikely that humankind will prosper. Life is going to become harsh between now and then. Massive numbers of humans will die, too, because of overpopulation, resource depletion and climate change. But undoubtedly both humankind and civilization will continue in some form at the dawn of the 22nd century.

David Mathews

Some rule changes could improve the palm oil situation. These could include no open air burning of native vegetation or deliberate firing of peat swamps, patrolled areas set aside for orang utans and mulching and return to the soil of processing residues. I've seen that cattle can be grazed between the palms to reduce weeds and add nitrogen rich manures. The EU could blacklist biofuels from certain countries as ineligible for the quotas.

I'm afraid we will have to accept major changes to forest ecology in all latitudes as the human population grows, especially post Peak. That might force a rethink on what constitutes a comfortable number.

Maybe. The money incentive is at cross purposes with the environmental purposes, which is almost always the case whereever we look. Part of the problem is actually the EU mandates on biofuel usage - cause and effect has led to an actual carbon flux many times greater than simply burning fossil fuels.

Governments have little incentive to even take part in regulatory schemes - not doing so puts them at a huge comptetitive advantage. We play against each other on almost all fronts.

While maintaining our competitive worldview, I don't see any solution at a high level. Any rule only stands until the price reward for breaking it reaches a threshold, and then it fails. You can set up a new rule, but it then fails in turn.

Local cooperation on a community level may be the only tool we have, and it is hard to use. Much harder than playing the violin, and not nearly as much fun, except in the rare joyful moments when things really work out.

The latest issue of National Geographic contains a distressing story about the ecological catastrophe and crime against humanity which is the oil industry in Nigeria. The article is titled:

"Curse of the Black Gold". which you can see an audiovisual presentation of here:

National Georgraphic's servers aren't handling that material very well, unfortunately. I recommend for everyone to read the article carefully. I did so myself at Barnes & Noble, with coffee and a lemon bar. I read the whole thing, too, in spite of the extraordinary force of the beautiful day which would lead me to spend the rest of the day out in the beautiful wilds along the Hillsborough River, with hawks and peacocks and wasps and numerous flowers.

Nigeria's situation has grown progressively worse as the oil companies have grown. Nigerians are suffering, the Niger Delta is an ecological disaster, and future generations of Nigerians will inherit that mess for millennia after the oil is all gone and burned into atmospheric pollution by fat Americans and their ridiculous SUVs.

Two Nigerians are quoted as saying that Nigeria would be a better place today had Nigeria never produced any oil. I agree with them. The oil industry in Nigeria is one massive crime against humanity. Too bad that the corporate psychpaths have collected their millions as a reward for their crimes.

David Mathews

One of those oil industry "corporate psychopaths" is our Sec State - the only cabinet officer in our history to have an oil tanker named after her!

Hello nelsone,

One of those oil industry "corporate psychopaths" is our Sec State - the only cabinet officer in our history to have an oil tanker named after her!

Our President & Vice President, too. Sickening to think what sort of crimes these people have committed against the impoverished people of oil-producing countries. The Nigerians are right about oil being a curse to Nigeria, I wonder if the Iraqis feel the same way? They should.

Iraq sold America its oil and for that the Iraqis got American bombs, bullets and depleted uranium for free.

I just wonder: When will all these crimes end?

David Mathews

I knew there would be little interest on TOD in my subject today, although it is very important — and I was right.

However, everyone's good comments are much appreciated by me and I have learned a few things.

best --

Hello Dave,

I knew there would be little interest on TOD in my subject today, although it is very important — and I was right.

The subject is very important and it is very good that you brought it up. I just wish that there was some means of solving the problem, i.e. some means of preventing the world's dominant primate from destroying everything for the sake of profits and energy.

But that is a goal which is officially hopeless.

Man is as evil as he is stupid.

The end of this story is a tragedy, both for the orangatun and also the Homo sapiens. We've really made a mess of this Earth and there's a price that humankind will pay for its egregious stupidity.

How long can technological civilizations survive in the Universe?

I'm guessing: Less than a thousand years.

Supposing that bacterial life continues to survive on the Earth until the sun becomes a red giant, that means that technological civilization's lifespan is 1000 years relative to eight billion years of Nature on the Earth. We just happened to be born at the apex of humankind's exuberance. The downslope will be rough, we're going to see some of it but (fortunately) not all of it.

Those rain forests will return, Nature will evolve all sorts of new species to replace those that humankind drove to extinction, but the end of humankind also constitutes the end of (allegedly) intelligent life in the Universe.

Extinction is not such a terrible fate as it seems. Humankind will leave some lovely fossils in the sedimentary rocks of this era. On some future day millions of years hence the forces of erosion will pry these fossils from the rocks and for a brief moment humankind (well, our bones) will again see the light of day.

That's the glorious future of humankind.


Dave, I think this subject is one many of us know little about, and your very thorough coverage leaves little to comment on for us not well educated on the subject. I suspect you had a higher lurker/commenter ratio than normal posts. Great article I enjoyed reading it.

Without establishing new plantations hardy trees like this could easily be planted roadside in the tropics for children or poor people to collect the pods/seeds for subsistence income. I know in my town in brasil if you put something on the street of any value it walks off.


Dave, I think this subject is one many of us know little about, and your very thorough coverage leaves little to comment on for us not well educated on the subject. I suspect you had a higher lurker/commenter ratio than normal posts. Great article I enjoyed reading it.

Oilrig you stole those words right from my mind.
I think this goes for a lot of Dave's post (his Angola analysis comes to mind).

A lack of discussion doesn't mean a lack of interest, just a lack of things to say.

Dave, if you want more comments leave big gaps in your logic and analysis. As it is we have nothing to add :-)

I could not agree more with your assessment. Dave's pieces really are some of the best on TOD, I think they're just usually so comprehensive on the topic that it leaves little room.

Good problem to have, I think.

Your post is most appreciated. You've taken us to yet another part of the world to show us that, yes, it is a global issue and no place on earth is untouched by what is unfolding. I have learned so much at this site and the range of my emotions attest to the breadth and depth of what is presented. As dark as it at times looks, I actually feel I know what's going on in the world and why. Thanks to the many people like you who care enough to share what you've learned with the rest of us.

best regards,


There might be more interest than is reflected in the comment numbers. Some of us are kind of dumbstruck at the devastation the planet is undergoing. A parallel development to this is fish farming and its massive impact on estuarian areas, although it is not directly energy related.

Good post Dave. Your work is much appreciated.


I read your article with great interest. I looked at the picture of the palm oil plantation and thought it compared to the vast stretches of corn and soybean in the Midwest where I live. I also thought back to the dust bowl, and how our plowing methods were the ecological disaster to the prairie compared to the burning of the rain forests today.

I think in the end it comes back to a problem of over population and over production. As the oil slips away we will try to extract energy from every source possible at any cost with out thought for the future. Eventually there will be some tipping point but I fear it will long after we have destroyed our environment.

You put a face on the people who are producing the palm oil. Again, I think this relates back to the US and our farmers. Most of them want to do what is right. They believe that what they are doing is right, that they are good to the environment. They want to make a living off of the land, feed their family, and pass it on to their children. But they are just part of a bigger system beyond their control. They are just like the plantation worker growing palm in many ways. Your reflections at the end bring that to light, and I liked that part of the article. Often times we get cought up in the technical aspects to Peak Oil, production numbers, advanced recovery methods, and the evil oil companies. But in the end there are faces and people behind these items, and most of them believe that what they are doing - their little piece of the puzzle - is the right thing to be doing for the greater good. Tragically we see that it is not.

Thank you for the great article on a subject that I think most people have not had a lot of exposure to.



Great post on a very important topic. I am delighted to hear about the push back from potential biodiesel purchasers in Europe.

I have spent quite a bit of time in the jungle in Borneo, although now over ten years ago. Even then, the rape of the forest was horrible and the damage it did to both the heritage of the world and the people in the region are inexcusable.

A comment above claims that the local dayaks gain some economic benefits from post deforestation cultivation. I don't think this is accurate. Many of these tribes are near nomadic and have been chased from the land or given token compensation.

However, I am not sure that biodiesel is the sole culprit or that replacing it with Jatropha or any other crop would mitigate the problem. The forests, as far as I know, are harvested primarily by Malaysia and Chinese timber companies for the purpose of logging. This is the way it was ten years ago, when the harvested land was laid barren, not cultivated in any large-scale way.

I suspect that the main beneficiaries remain logging companies who look for any excuse, dams, farming, etc, to let loose with the chainsaws.

At the end of the day, I think this is only partially an energy issue and more of a development issue. The only solution that I can see is providing the countries with income for preserving the forest. However, this might involve determining an economic value for it, which I know riles you up.

Finally, this issue pertains primarily to the Island of Borneo, which is shared by Indonesia and Malaysia. Thailand, mentioned elsewhere in the article has, like England, pretty well savaged its forests already. In the Southeast Asian region, I would worry about Laos as the next potential clash between forests, poverty and economic advantages from exploiting what is now ancient primary forest.

Good to hear from you, Jack.

I avoided the logging issue, which you appropriately brought up here, because I was trying to stay with the energy biofuels angle, which is real, of course. I don't know what else to say — I agree with you.

Yes, the energy issue is real and there is no doubt that rising demands for biofuels make an existing crisis much worse. I think you are right to focus on that angle. I just wanted to suggest that in looking for solutions, we may need to step back and see the bigger picture.

I am encouraged that Europe is stepping back from purchasing these fuels, but worry that the slack will be picked up elsewhere. At the end of the day, I think the only viable solution is to give the countries, or other entity, offsetting income that provides an incentive for preserving, rather than destroying the forest. I am doubtful that it could happen.

By the way, I do support some use of biofuels and think they can be a small, partial, and temporary substitute for declining availability of oil. However, they are not without huge risks and I think it is essential to discuss these in an analytical fashion that helps us to avoid the worst parts, such as deforestation and the ridiculous corn pumping schemes, without just saying "food good, fuel bad".

Hello Jack,

The only solution that I can see is providing the countries with income for preserving the forest. However, this might involve determining an economic value for it, which I know riles you up.

I agree. We need to set an economic value on that forest.

I propose the following:

Humankind can purchase the rights to destroy these forests at the price of humankind's extinction.

Does that seem like a too small a price to pay?

Well, then, let's re-open the negotiations.

The new price for those forests:

Humans can destroy the rain forests of the world at the price of suffering the most horrendous apocalypse which will lead to humankind's extinction from the Earth and the Universe.

How does that sound?

Actually, the above negotiations are not fair. How so? Because at this point there actually is no negotiations available for humankind. The apocalypse is coming, the apocalypse is already here, and humankind's extinction is guaranteed, and humankind will go extinct in the most hellish manner possible.

Too bad for humankind, but those forests will recover in their own good time. Thank God for evolution.

David Mathews

Hello Everyone,

For those wondering what price humankind is paying for the oil industry, here is a distressing story from here in the U.S. of A.:

Utah's mountains, valleys under a 'soup'
By ED WHITE, Associated Press Writer

Utah's world-class mountain peaks have been barely visible at times from the floor of the Salt Lake valley. A winter storm that won't quit? No, it's nasty pollution that just won't blow away.

Northern Utah's valleys have been smothered by an "inversion," a blanket of warm air that keeps cold air close to the ground and traps everything: car exhaust, factory emissions, even hard-to-see particles from furnaces or a cozy fireplace.

Together they form a cloudy shroud that has been described as soup, gunk, smog, and a few other titles that can't be printed.

A small price to pay, I must say. Thank you: Oil industry, auto industry, and all industries.

Fill the air with pollution, we don't care; just keep us driving and shopping, we Americans are passive animals when we are consuming. Just like cows. Perfectly pliable obese cows.

Burn the Earth. The Earth was created for humankind to burn.

David Mathews

You forgot to thank all of us who are busily consuming all those products, including gasoline, which leads to the inversions you speak of.

Hello tstreet,

You forgot to thank all of us who are busily consuming all those products, including gasoline, which leads to the inversions you speak of.

There's plenty of blame. The consumers of the world are guilty. All Americans are guilty. I know I am guilty. I have reduced by consumption substantially over the last five years but still ... not enough.

Isn't it a pity that a primate owns the world? I can think of a million other animals who could have done a better job dominating the Earth. Humans are the very worst of the animals but at least our dominion over the Earth is temporary.

David Mathews

Very important article in today's USA Today:

Fossil fuels are to blame, world scientists conclude

A major international analysis of climate change due Friday will conclude that humankind's reliance on fossil fuels — coal, fuel oil and natural gas — is to blame for global warming, according to three scientists familiar with the research on which it is based.
The gold-standard Intergovernmental Panel on Climate Change (IPCC) report represents "a real convergence happening here, a consensus that this is a total global no-brainer," says U.S. climate scientist Jerry Mahlman, former director of the federal government's Geophysical Fluid Dynamics Laboratory in New Jersey.

"The big message that will come out is the strength of the attribution of the warming to human activities," says researcher Claudia Tebaldi of the National Center for Atmospheric Research (NCAR) in Boulder, Colo.

Pay special attention to the associated graphics on the USA Today webpage. Miami and New Orleans are two cities which have no future. The ocean will swallaw these cities. Undoubtedly major hurricanes which were formerly weakened by Florida's barrier islands will ravage the interior of Florida. I wonder where Florida's sixteen million inhabitants will go?

Humankind is going to lose all of its coastal developments, industries and cities. Millions of people will be displaced. The economic consequences are substantial.

Too bad for humankind.

David Mathews


You scooped the New York Times, but now they are playing catch-up:

Once a Dream Fuel, Palm Oil May be an Eco-Nightmare

Jan 31, 2007

Dave, good to see coverage of palm oil in TOD.

I'm from SEA and have experienced first hand the environmental issues you brought up and comments made by other posters. Not much fun inhaling forest fire smoke, seeing formerly pristine rivers turn brown from erosion caused by deforestation.

On the other hand, the reactive stance taken by NGOs and govts of importing countries toward the palm oil business does not augur well for a planet facing a liquid fuel supply challenge which can be mitigated in some way by this high oil yielding plant.

Rather than calling for boycotts it's will make more sense for importing countries to work directly with the producing countries/businesses to ensure that practices are sustainable.

I don't believe there are more than a dozen large plantation companies combined in both Indonesia/Malaysia representing the majority of acreage that would pose a challenge to large CPO buyers to work directly with to implement better environmental pratices.

In fact the Malaysian government is currently combining it;s majority stake in three of the largest palm oil companies in the country to form the worlds largest palm oil company (which incidentally have have landbanks in Indonesia as well). An important and perhaps less known outside the country is that the current Malaysian leader is pro-environment.

Practically, green buffers zones / silt trap along water ways and non-burning land clearing practices can stop water way pollution and CO2 emission immediately.

On the side, I'd like to add that the palm oil tree has a life span of about 25 years and starts yielding fruit 2 to 5 years after planting. In comparison to say sugar cane or corn there's no seasonal replanting thus possibly improving EROI in that respect. Jatropha Curcas has an even longer life span of about 50 years. It would not be surprising if soil erosion is minimised significantly from not having regular ploughing of the land.

ALso, arguments that increasing palm plantations area will eat into acreage available for edible crops does not necessary hold true. I've come across young palm plantations intercopped with pineapples for example. In another instance, there's a plan for a jatropha plantation that will be intercropped with fruit and vegetebles in the early years.

Of course finally, easier said than done, but being a little less reactive would surely help address environmental and energy issues we will all face in the near future.


I'm curious, you give two different numbers for jatropha productivity:

"The tropical jatropha produces 1590 kg of oil per hectare per year"
"D1 expects each hectare to deliver about 3,000 litres of biodiesel"

These don't seem to square up. Do you know anything about that, has D1 had an breakthrough that has generated dramatically better yields per hectare?

My first input to the Boxer Commission was ...

Increase incentives/rebates for wind and solar
55 mph max speed limit
electrify the rail lines