Green Car Congress: ADM to Invest $2.3 Billion Before 2009 to Expand Production of Biofuels and Plastics

Archer Daniels Midland (ADM) plans to invest about $2.3 billion before 2009 to expand its capacity for the production of ethanol and other biofuels and on the development of PHA (polyhydroxyalkanoate, a biodegradebable plastic made from plant sugar). See more here: ADM to Invest $2.3 Billion Before 2009 to Expand Production of Biofuels and Plastics

The talk around biofuels, whether it's biodiesel or ethanol, tends to make one think it will help the small family farm to survive. Biofuels means someone has to grow the biological material that go into creating the fuel. That means greater demand for biological material, which will mean higher prices for biological material, and eventually trickle down to more money flowing to farmers. Supposedly.

Or is it only going to enrich the likes of Archer Daniels Midland?

WWF and palm oil industry join forces in Malaysia

Malaysia is going for biodiesel production in a big way. They are building many palm oil plantations and building biodiesel production plants. I have previous coverage here, here, and here.

One issue with Malaysia's plans is they're cutting down their rain forest to build these palm plantations. That, in turn, means new threats to rare species and a reduction of biodiversity. In other words, in the process of solving one environmental problem (environmental degradation from burning fossil fuel) they're creating a different environmental problem (reduced biodiversity).

WWF and palm oil industry join forces covers work by the World Wildlife Foundation to do something in cooperation with the palm oil industry. Through their Forest Conversion Initiative and the Malaysian Palm Oil Association (MPOA) signed two Memoranda of Understanding (MoU) to develop Better Management Practices for the Malaysian oil palm industry to safeguard high conservation value forests (HCVF) in the country.

This sounds nice ... if some action is going to cause an environmental problem, it's nice there's an environmental protection organization they can partner with to mitigate the problem.

But ... in my mind is another thought. I wonder if this partnership is meant to whitewash the problem? Is this partnership only meant to give the appearance of solving the problem? Or is this partnership taking actions which are truly useful?

RenewableEnergyAccess.com | Plant Science Advances U.S. Potential for Ethanol from Biomass

As I look at the issues around energy supplies and resources, I'm coming over to the picture in this article: Plant Science Advances U.S. Potential for Ethanol from Biomass ... American Society of Plant Biologists (ASPB) President Michael Thomashow is quoted discussing how plant science is showing a way towards winning independance from fossil fuels. With plant science you can create organisms which readily produce the same substances which the earth turned into fossil fuels, but you can do it in hours rather than having it take millions of years.

RenewableEnergyAccess.com | Anaerobic Digestion Found to Produce Renewable Energy

Here's another article on anerobic digesters, giving some details of operation: Anaerobic Digestion Found to Produce Renewable Energy

Green Car Congress: Denmark To Build Worlds Largest Biogas Plant

Denmark To Build World’s Largest Biogas Plant discusses an anerobic digester plant being built in Jutland. It's sized large enough for electricity to 800 homes and heat to 200.

Green Car Congress: Microreactor for Distributed Production of Biodiesel

Microreactor for Distributed Production of Biodiesel discusses a development by scientists at the University of Oregon which promises to revolutionize biodiesel production. Producing biodiesel has an involved series of chemical reactions to perform. The Univ of Oregon scientists have developed a simplified gizmo which makes the process very simple, and very quick.

more is available from the Univ of Oregon

Kuwait, Saudi Arabia, and oil reserves (HoweStreet.com)

Yikes! Things Just Got Worse ... what just got worse? It has to do with the claimed oil reserves in Kuwait. The article discusses a report published by Petroleum Intelligence Weekly (PIW) titled Oil Reserves Accounting: The Case Of Kuwait. Unfortunately the subscription price puts me off so I can't read the report myself.

Supposedly the report discusses details of Kuwait's claimed oil reserves. Kuwait's reported oil reserves are 99 billion barrels. Kuwait has been an oil exporter since 1946, and has a massive oil field. However it's clear the reserves have been overstated.

The PIW report is based upon data circulating within the top echelons of the Kuwait Oil Co. (KOC). KOC is the upstream arm of state-owned Kuwait Petroleum Corp. KOC has primary responsibility for conducting exploration, drilling and production from Kuwait's oil fields. The PIW report claims that Kuwait's remaining proven and nonproven oil reserves total about 48 billion barrels, or 51 billion fewer barrels than previously advertised.

That 51 billion fewer barrels of reserves represent 5% of stated world reserves. Especially troubling is I've read several articles claiming that many oil producing countries have been overstating their reserves as well. What isn't overstated is the world consumption, especially the growing consumption levels in India and China resulting from their economic expansion.

How did this come about? Well, it's not a simple matter of bravado (e.g. the stereotypical men boasting about the size of X or Y or oil fields). In this case it is about distinguishing between "proven," "probable" and "possible" reserves.

Kuwait (and others?) have stated their reserves as the sum of all three. Well, I don't know about you, but "possible" reserves doesn't sound very promising. Especially when you consider most oil wells turn up dry, even on a good day.

As I said, the oil consumption rate is known (and growing). What isn't so clear are the actual reserves. One thing that's clear is the Hubbert model which predicts the peak oil phenomenon. It's not that an oil field produces fine until one day it just fizzles to a stop. Instead it produces fine until the peak occurs, after which it's a constant struggle to get oil out.

This means the world oil situation will appear fine, but with more and more oil fields tilting to the "struggle" phase as each individual oil field peaks.

That, in a nutshell, is the peak oil phenomenon. The last several years of oil use will be characterised by a struggle to retrieve oil, and therefore the actual oil "production" will inexorably decline.

In the face of America stupidly continuing the glut of oil use and gas guzzling way of life, along with India and China rapidly expanding their oil use, this will not be pretty to watch.

I should warn you the author of the article I've linked to -- well -- he works for a financial investment company. They purport to having some investment ideas related to the scenario they describe. While I agree with the scenario, there may be some tilting of the rhetoric on their part.