Green fuel gets a black name

[ The Sydney Morning Herald ]

The race for clean energy may be doing more harm than good, writes Marian Wilkinson.

It is a sickening picture. A photograph of six soft-eyed baby orang-utans stamped with the words "Orphaned by Palm Oil companies". The image, along with scores of others showing adult apes staring out through the bars of cages, has created a public relations disaster for global companies buying the oil that many hoped would fuel a green energy boom.

This week, as Greenpeace International launched a "Forest Defenders Camp" in the Indonesian province of Riau, where swathes of orang-utan habitat have been cleared by felling and fire for lucrative palm oil plantations, the "oil for ape" scandal hit Australia.

Caught in the middle is a quietly spoken Sydney businessman who walked away from the petroleum industry several years ago convinced that price, supply and climate change made it yesterday's game. Barry Murphy, a former Caltex Oil chief, plunged into the heady world of "clean" energy hoping to fuel Australian industry with diesel made from the world's second most popular edible oil.

"It would be foolish to ignore the fact that people are anxious about fossil fuel and its effect on the environment and that it's not sustainable," Murphy told the Herald last week. "People are naturally looking to palm oil." Why? "It has the highest yield of any of the vegetable oils. You can get 4000 to 5000 litres of oil per hectare per year." That is about 10 times more productive than soya beans.

Perhaps unfortunately, Murphy is not alone in his thinking. In January this year, the China National Offshore Oil company reportedly signed contracts to develop 1 million hectares of palm oil plantations in Indonesia and Papua New Guinea.

This thinking has sent palm oil stocks soaring. European countries hoping to slash their greenhouse gas emissions by using biofuels have also turned their attention to palm oil. Already a ubiquitous ingredient in supermarket products from margarine to lipstick, palm oil's promise as a clean biofuel supercharged the price which reached a staggering $US828 ($921) a metric tonne last month, a leap of more than $US300 in just one year.

But the palm oil boom is proving to be an ecological disaster in Indonesia and Malaysia, which produce more than 80 per cent of the world supply. The trade has helped drive Indonesia's spectacular rate of deforestation and the burning of its peatlands. Early this year, the United Nations released a report on the crisis, finding that the explosion in palm oil plantations "is now the primary cause of permanent rainforest loss" in Indonesia and Malaysia. As the forest disappears, local environmentalists estimate that up to 50 orang-utans are dying each week.