Indonesia’s Biofuels Plan May Require $22-Billion Investment
14 July 2006
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| Although still a member of OPEC, Indonesia became a net importer of oil in 2004 due to declines in production and increases in consumption. Source: EIA |
Antara. Indonesia’s plan to develop biofuels as a substitute for fossil fuels may require a total investment of about 200 trillion rupiah (US$22 billion), according to Energy and Mineral Resources Minister Purnomo Yusgiantoro.
Yusgiantoro, who also served a term as OPEC president, said this estimate covers the costs of building 6 million hectares of plantations and the accompanying downstream business infrastructure.
On 3 July, Indonesian President Susilo Bambang Yudhoyono said the country should focus on making biofuels from four commodities: palm oil, cassava, jatropha, and sugar left over from processing.
The government has assigned a special team to draft a master project plan to include funding, land acquisition, supporting infrastructure, processing plants and marketing and distribution networks. The team is expected to have finished its work by the end of this month.
Separately, the energy ministry’s research and development head Nenny Sri Utami said the government plans to set up 11 biofuel processing plants. Industry Minister Fahmi Idris was earlier quoted as saying that biofuel is expected to reduce Indonesia’s fuel oil consumption by about 10%, or 4.1 million kiloliters (1 billion gallons US).
Sounds like a hell of a lot of new industry to me. Good for Indonesia for pre-emptively trying to haul the bull by the horns.
Posted by: Mel. | 14 July 2006 at 11:12 AM
Mel -
nothing pre-emptive about this: Indonesia became a net importer of oil in 2005 (see graph). While people in the West gripe about $80 or $100 oil, they can still afford it. Emerging countries cannot.
Most of the indicated cost would presumably be due to clear-cutting vast tracts of virgin rain forest and buildin terraces for water management. The only way to avoid this is to encourage Indonesia to consider alternate strategies, including algae-based biofuels grown intensively using CO2-rich flue gases from power stations. The fuel for those could be coal, the country produced some 132 million metric tons of it in 2004. The sector is currently growing quickly.
Perhaps there is some way to combine food and energy farming, to use the available rice paddies more intensively. The NRELs design required continous circulation in oval ponds, which in this case would be impeded by the rice plants, which might have problems with both the algae and the circulation. Water consumption would go up as algae are removed. Fertilizer might have to be added. Still, co-agriculture might be worth studying, especially since other tropical Asian countries are facing a similar energy crunch.
Posted by: Rafael Seidl | 14 July 2006 at 12:43 PM
Rafael,
Don't forget aquaculture benefits too. Another problem is that their energy prices have been too low, for too long. Like other places with oil export dependent economies, it has wasted oil by having prices at very low levels. The Saudi's and Venezuela are doing the same thing.
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___Additionally, coal seam fires ignited by clearing forests via fires are emitting large amounts of GHGs and other pollutants (particulates, NOX, SO2, etc). They could pump captured CO2 into the underground fires to snuff it out, but it has to be done right. Otherwise it could end up forming a deadly suffocating gas layer near the surface.
Posted by: allen Z | 14 July 2006 at 06:35 PM