"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Friday, August 04, 2006

Indonesian US$22Bn. Bio - fuels project gets under way

Indonesia, is with 240 Million people, the world's 4th most populous country, living in a 3,000 mile long archipelago that spans three time zones.

In response to soaring energy costs,the Indonesian Government has recently introduced an ambitious crash program to develop bio-fuels and intends to invest US$ 22 Bn. by 2010 to promote the Indonesian biofuel industry. Three-quarters of the funds will be for palm oil - i.e large plantations.Malaysia's diversified conglomerate Genting Bhd. had already approached the government for a 1 million hectare allocation for biofuel development in palm oil and sugar cane revealed the Energy and Natural Resources Minister Dr Purnomo Yusgiantoro yesterday.

Several other Malaysian companies like Petroliam Nasional Bhd and Sime Darby Bhd, were keen to invest in the biofuel sector as well. "However, the opportunity is only for upstream activities as we have decided to give Pertamina, the state-oil company, monopoly in the downstream activities," said the Minister.

It is intended to produce alternative fuels using crops such as palm oil, cassava, jatropha (castor oil) and sugar cane for the production of biodiesel and ethanol.

About US$6 Bn. will be spent securing 6 million hectares (14.8 million acres) of land, in locations so far unspecified plus plants, roads and structural services.Plant- derived can be mixed with mineral oil based gasoline, diesel and kerosene,(1/3rd of which are imported) which are now subsidized by the government (in Indonesia).

Besides improving levels of fuel self-sufficiency it will creates a large number of jobs on the land and in fuel production.

Indonesia is already the world's second-largest producer of palm oil,following Malaya, the price of which has gained 5.6 percent since the year started to 1,497 ringgit ($409) a metric ton. Production may reach 15 million tons this year, Derom Bangun, chairman of theIndonesian Palm Oil Producers' Association, said on June 21.

The government will enlist the support of agricultural companies such as PT Astra Agro Lestari, the country's largest plantation company by market value, smaller producers, cooperatives and multilateral agencies, he said.

The government will also seek favorable financing from state banks such as PT Bank Rakyat Indonesia, PT Bank Mandiri and PT Bank Negara Indonesia, the minister s aid.

Alhilal Hamdi, the newly installed chairman of Indonesia's national biofuel promotion committee, said: "The promotion of biofuel could help develop what we call the social economy". The policy, he said, was part of the government's triple-track strategy of promoting biofuel, which was intended to promote growth and employment, and reduce poverty. The government's decision to raise fuel prices by an average of 120% last year had particularly impacted the poor.

By the year 2010, the government hopes that the biofuel industry will employ a total of 3.6 million people in biofuel processing plants, and in castor oil, palm oil, cassava and sugar cane plantations.

Mines and Energy Minister Purnomo Yusgiantoro has said that it is expected that Indonesia can produce 720,000 kiloliters (kl) of biofuel per year on average between 2005 and 2010, 1.5 million kl per year over the five years after that up to 2015, and 4.7 million kl per year over the following ten years up to 2025.

By the year 2010, he said, the country would be able to substitute some 10 percent of its oil-based fuels with the environmentally friendly biofuel

Paradoxically it is the castor oil plant (Ricinus - source of the poison ricin) which is seen as a key to helping the rural poor, easily grown - indeed a weed in many countries, Jatropha curcass and Ricinus communis grow quickly and are easily harvested several times a year in tropical zones.

Castor-oil growers can process their castor-oil harvests into bio-diesel using their own small-scale processing machines.

PT Tracon Industri for example manufactures portable machines with production capacities ranging from five kilograms to 50 kilograms per hour.

If farmers were to purchase the five-kilogram-capacity machines, which cost less than ten million rupiah each, they could process their produce and then sell the oil to either state power utility PLN or state oil and gas firm Pertamina.

Alhilal Hamdi said that the government would also guarantee that PLN and Pertamina would buy the biofuel from the micro-businesses. "We're also designing fiscal incentives, including tax holidays, for people who want to enter the biofuel business," he said.

The governments intention is not only to aid self succicency in energy but help generate small scale economic growth, create new jobs and reduce poverty.

More here at BIOPACT

Indonesia allots 6 million hectares for biofuels

Biopact is a site that "unites EU citizens and African citizens who work towards a common bioenergy future, in which the EU couples part of its green energy policies to its humanitarian and development policies in Africa. We also monitor biofuels and bioenergy news coming from the developing world in general." Have a look.


Anonymous said...

Has anyone done any costing of all of this where the unit of account is energy rather than fiat currency?

ps Don't forget about the fish

Postman said...

I cannot give an answer on either query.

We assume that the proponents of the scheme have. Labour costs will of course be low, as will land.

One question I keep asking but don't get any sensible answer is, where does all the glycerine by product get used - or is the world's consumption of cosmetics and sun screen soaring at the same rate as energy consumption ?

Of course in this scheme as in similiar Malyan schems (see post here previoulsy) much of this is to help rural poor and extend agriculture and employment - so energy poutput / cost is not the sole criteria to judge the schemes on.

One hopes that the main driving force is not simply land grabbing and de - forestation by major companies.

There is wide criticism by major world tree huggers, Greenpeace, WWF etc., of these schemes.

Anonymous said...

Hi Postie

"We assume that the proponents of the scheme have. Labour costs will of course be low, as will land." In terms of fiat currency (ringitt?) the costs may be low but what about in energy (Joules or barrels of oil). I'm not talking about the cost of land and labour but the energy cost of the process. Also, according to Monbiot they're going to use fish stocks to provide oil. That is, they're going to get fish, crush them for their oil content and then discard the residue. As to how true that is ... I don't know.

There are some processes that use the glycerol in polyurethane production by mixing with di-isocyanates (eg O=C=NCCCN=C=O). It can be burnt and there are ideas of using it as a chemical feedstock following various modifications. (Again, this depends upon cost - not necessarily currency but energy).

(C) Very Seriously Disorganised Criminals 2002/3/4/5/6/7/8/9 - copy anything you wish