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emersonbiggins
Moderator
Joined: Jul 10, 2005
Posts: 4848
Location: Dallas
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 Posted: Thu May 01, 2008 2:27 pm Post subject: Palm oil bust in Asia |
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Those damn receding horizons...
(emphasis mine below)
| Quote: | Biofuels Backlash: Asian Palm-Oil Producers Shut Plants
Posted by Keith Johnson
U.S. and European biofuel producers are singing the blues these days. But that’s nothing compared to the tsunami overwhelming Asian biofuel makers. The good news? There may actually be a silver lining to it all.
American ethanol refiners, swamped by rising feedstock prices and a capacity glut, have seen economics go south, even with federal subsidies. European biofuel producers are shuttering plants, complaining about unfair U.S. competition and higher feedstock prices.
But in Asia, where demand for transport fuel is growing much faster than in Western economies, biofuel producers still can’t catch a break. Our EC colleague Tom Wright reports today in the WSJ (sub reqd.) that biofuel producers across southeast Asia are shelving plans for tens of billions of dollars of investment in new refineries:
That is an unexpected reversal of fortune for the industry. Just a year ago, Asian companies were rushing to build biodiesel plants to take advantage of subsidies in Europe and the U.S. aimed at promoting the consumption of cleaner-burning fuels. Projects being built or planned were forecast to pump out five million metric tons of biodiesel a year upon completion, or about half of Europe’s total refining capacity in 2007. The Indonesian government boasted that $12.5 billion in new biofuel investments were in the pipeline for that country alone.
The main culprits? Higher raw material prices, a supply glut in Europe (a big export market), and increasing concerns over the environmental impact of biofuels, especially the southeast Asian variety, which often involves deforestation. The higher prices for key ingredients like palm oil are especially painful: Indonesia’s state oil company Petamina has slashed its biofuel blend from 5% to 1% in less than 2 years because the economics just don’t work anymore.
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| Quote: | | The result: Some Asian palm-oil producers have scrapped their plans for biodiesel refineries, and only a few new plants have come on line. In Malaysia, for instance, the industry produced just 80,000 metric tons of biodiesel last year, much lower than the country's annual capacity of one million tons, Malaysian Commodities Minister Peter Chin said last week. |
WSJ (subs. req'd)
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frankthetank
Fusion
Joined: Sep 16, 2004
Posts: 4248
Location: Southwest WI
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| Posted: Thu May 01, 2008 2:42 pm Post subject: Re: Palm oil bust in Asia |
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| Quote: | | Projects being built or planned were forecast to pump out five million metric tons of biodiesel a year upon completion |
Thats around 30 million barrels. We could burn that up in a few days.
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auscanman
Heavy Crude
Joined: Dec 28, 2005
Posts: 294
Location: Toronto, Ontario
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| Posted: Thu May 01, 2008 4:33 pm Post subject: Re: Palm oil bust in Asia |
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I'm glad to hear this news. Perhaps the remaining rainforests in Borneo will now stand a chance.
Back in Malaysia 6 years ago it was creepy as hell to see endless rows of palm trees. The rainforests have been pretty much wiped out on the Malaysian Peninsula, and I would hate to see that kind of devastation expanded. |
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cube
Fusion
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Joined: Mar 12, 2005
Posts: 3307
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| Posted: Thu May 01, 2008 4:34 pm Post subject: Re: Palm oil bust in Asia |
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| frankthetank wrote: | | Quote: | | Projects being built or planned were forecast to pump out five million metric tons of biodiesel a year upon completion |
Thats around 30 million barrels. We could burn that up in a few days. |
BINGO! You notice that the mainstream media never bothers to put this into context by comparing it too crude oil? " five million metric tons of biodiesel a year" sounds really impressive until a comparison is made.
crude oil 85 mbpd
palm oil 0.08 mbpd
or in other words less than one / one thousands.  |
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dorlomin
Intermediate Crude
Joined: Aug 05, 2007
Posts: 974
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| Posted: Thu May 01, 2008 4:59 pm Post subject: Re: Palm oil bust in Asia |
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| That is great news. A brief glimps of common sence in a world gone mad. Hopefull this will alleviate some of the pressure on food prices. However thinking of the climate in Indonesia it may only be a matter of time before sugar-cane replaces palm oil. |
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shortonoil
Fission
Joined: Dec 02, 2004
Posts: 2470
Location: VA USA
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| Posted: Fri May 02, 2008 9:51 pm Post subject: Re: Palm oil bust in Asia |
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dorlomin said:
| Quote: | | However thinking of the climate in Indonesia it may only be a matter of time before sugar-cane replaces palm oil. |
Thinking about the paucity of nutrients in the soil of the tropical rain forests, without the application of hydrocarbon based fertilizers, their life span can be measured in a very few years.
Most bio-fuels are net energy losers, and unless there is a lot of petrochemicals to plow into them, they won’t last for long. It looks like the age of abundant, cheap hydrocarbons has run it course. Don’t worry about the tropical rain forest, they will outlast the age of oil, their greatest treat, by a few hundred million years. |
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pstarr
Expert
Joined: Sep 27, 2004
Posts: 7081
Location: Behind the Redwood Curtain
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| Posted: Fri May 02, 2008 10:09 pm Post subject: Re: Palm oil bust in Asia |
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| shortonoil wrote: | dorlomin said:
| Quote: | | However thinking of the climate in Indonesia it may only be a matter of time before sugar-cane replaces palm oil. |
Thinking about the paucity of nutrients in the soil of the tropical rain forests, without the application of hydrocarbon based fertilizers, their life span can be measured in a very few years.
Most bio-fuels are net energy losers, and unless there is a lot of petrochemicals to plow into them, they won’t last for long. It looks like the age of abundant, cheap hydrocarbons has run it course. Don’t worry about the tropical rain forest, they will outlast the age of oil, their greatest treat, by a few hundred million years. |
I really enjoying the coming peak-oil termination of rampant consumption, rainforest depletion, ocean fisheries' decline, CO2 emissions, the sprawl lifestyle, '2nd' homes (most people don't 'vacation' in them, they only watch TV), endless mind-numbingly commutes, dumb kids, MacIntoshes and vegetarians. 
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shortonoil
Fission
Joined: Dec 02, 2004
Posts: 2470
Location: VA USA
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| Posted: Fri May 02, 2008 10:24 pm Post subject: Re: Palm oil bust in Asia |
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pstarr said:
The elders have been hoping for this for 10,000 years. I’m not sure it has anything to do with oil. |
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pstarr
Expert
Joined: Sep 27, 2004
Posts: 7081
Location: Behind the Redwood Curtain
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| Posted: Fri May 02, 2008 10:29 pm Post subject: Re: Palm oil bust in Asia |
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| shortonoil wrote: | pstarr said:
The elders have been hoping for this for 10,000 years. I’m not sure it has anything to do with oil. |
Cars make kids dumber. They use them for their escapes.
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fletch_961
Tar Sands
Joined: Jan 31, 2008
Posts: 76
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| Posted: Fri May 02, 2008 10:50 pm Post subject: Re: Palm oil bust in Asia |
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| Quote: | I'm glad to hear this news. Perhaps the remaining rainforests in Borneo will now stand a chance.
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| Quote: | | The higher prices for key ingredients like palm oil are especially painful: |
I guess you missed the part about "higher feedstock" costs. The price of palm oil is up. More incentitive to plant more. More rainforest chopped down. This makes you glad? |
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shortonoil
Fission
Joined: Dec 02, 2004
Posts: 2470
Location: VA USA
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| Posted: Fri May 02, 2008 11:10 pm Post subject: Re: Palm oil bust in Asia |
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fletch_961 said:
| Quote: | | I guess you missed the part about "higher feedstock" costs. The price of palm oil is up. More incentitive to plant more. More rainforest chopped down. This makes you glad? |
The point is that because bio-fuels are net energy losers, without cheap hydrocarbons to make them they will be, and are, going out of business. No matter how pricey palm oil gets, its production will go down with oil. |
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fletch_961
Tar Sands
Joined: Jan 31, 2008
Posts: 76
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| Posted: Fri May 02, 2008 11:49 pm Post subject: Re: Palm oil bust in Asia |
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| shortonoil wrote: | fletch_961 said:
| Quote: | | I guess you missed the part about "higher feedstock" costs. The price of palm oil is up. More incentitive to plant more. More rainforest chopped down. This makes you glad? |
The point is that because bio-fuels are net energy losers, without cheap hydrocarbons to make them they will be, and are, going out of business. No matter how pricey palm oil gets, its production will go down with oil. |
Well, that is an interesting conclusion. I don't see any where in the press clipping that biofuels are struggling with a negative EROEI. Or that palm oil production is struggling (going out of business) due to lack of cheap hydrocarbons. Instead I read an article that says that there is idle capacity and demand for more palm oil, just not at the present price.
Biofuel makers are struggling (going out of business) due to the high price of palm oil. This can't be good for the rain forest. Does this make you glad also?  |
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shortonoil
Fission
Joined: Dec 02, 2004
Posts: 2470
Location: VA USA
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| Posted: Sat May 03, 2008 9:44 pm Post subject: Re: Palm oil bust in Asia |
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fletch_961 said:
| Quote: | | Well, that is an interesting conclusion. I don't see any where in the press clipping that biofuels are struggling with a negative EROEI. |
Actually it is rather doubtful that you will see anything of value at all in the Lame Stream Media. The media is about selling advertisers’ products and supplying entertainment to the proletariat. |
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Gerben
Heavy Crude
Joined: Mar 07, 2007
Posts: 318
Location: Holland, United Kingdom (of the seven Netherlands)
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| Posted: Sun May 04, 2008 1:22 am Post subject: Re: Palm oil bust in Asia |
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| shortonoil wrote: | | Actually it is rather doubtful that you will see anything of value at all in the Lame Stream Media. The media is about selling advertisers’ products and supplying entertainment to the proletariat. |
I think it's more a question of anything you would value. Most biofuels have a positive EROEI. You might not like it, but that's not the point. |
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thor
Heavy Crude
Joined: Jun 21, 2005
Posts: 449
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| Posted: Sun May 04, 2008 3:05 am Post subject: Re: Palm oil bust in Asia |
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| dorlomin wrote: | | That is great news. A brief glimps of common sence in a world gone mad. Hopefull this will alleviate some of the pressure on food prices. However thinking of the climate in Indonesia it may only be a matter of time before sugar-cane replaces palm oil. |
Indeed. I sincerely hope this industry crashes down competely. |
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