Time to focus on palm oil
By Wei Seng
How is this not as disastrous as the Gulf oil spill?
As the oil spill in the Gulf continues unabated, environmentalists and activists are interested in targetting another source of fuel that may be an alternative to crude oil but is probably also as controversial in terms of its sustainability: palm oil.
The Economist reports late last month about how plam oil, "a popular, cheap commodity" is being targetted because of the damage to rainforests and ecosystems as a result of the encroaching oil palm forests, especially in our neighbouring countries Malaysia and Indonesia. Palm oil may be considered an alternative source of fuel as biodiesel, but the deforestation that takes places to plant oil palm trees is certainly far from environmentally friendly or sustainable. And at a time when "oil (continues) to spill into the Gulf of Mexico, companies' environmental responsibilities have never been more public", which makes this period a prime time to target companies that use palm oil as well as palm oil producers (mainly in Malaysia and Indonesia).
Is it possible to swear off palm oil usage? Firms being targetted for palm oil use, from Unilever to Nestle, are investing their supply chains to make sure that the palm oil they use comes from sustainable sources and of industry standard, though it is hard to control whether the palm oil obtained comes from sustainable sources as even palm oil certified as sustainable will be "mixed in with the rest" by processors and traders, the middlemen in the palm oil trade. Possible (but costly) alternative could include coconut oil which Lush, a British cosmestics company, is using. Otherwise, adopt the strategy of food companies such as Marks & Spencer and Mars: reduce palm oil content for health and "nutritional reasons".
The article in The Economist, in particular, also focuses a lot on environmental activists' approaches to appeal and petition industry, commerce and government. It is worth reading about all the environmental activism and the different tack activists take with time as the public, with a maturing and more sophisticated view about the environment, expect more from companies and industries. This article comes as a timely reminder that we should scrutinise how clean our sources of fuel are, even those supposedly considered as alternatives. A razed forest is certainly not any less disastrous as an oil-polluted sea.
Gulf Oil Spill: America’s Fault?
By Wei Seng
It is all America's fault!
At first glance, the title of the commentary written by Matthew Lynn of Bloomberg promises to stir controversy and in particular wrath amongst Americans and environmentalists: "BP Needs to Tell Whining Americans to Take A Hike", screams the headline. I thought it was quite outrageous and audacious of him to write something like that, but after combing through the article in Today, I realised that he had a valid point, albeit only one and flashing it out in a very blunt and insensitive manner.
Of course, to tell Americans to "go take a hike" would really be a slap in the face of Americans affected by the oil spill. Livelihoods have been destroyed as fisheries become polluted, ecosystems and biodiversity continues to suffer devastation as time passes. And while employing the "spin doctor" might seem like a waste of money to BP because of the irreversible damage to environment and reputation, to not do anything would put the management of BP in a tough spot with the shareholders (though I think it deserves quite a bit of grilling for the disaster).
Lynn's reasons for asking BP to snub the Americans:
1. "US is guilty of crazy double standards" - given the huge oil consumption / addiction of America, no wonder "oil companies have to drill in more and more dangerous places" to keep up with the demand
2. BP, with its reputation "finished in the US", should just hire "the nastiest, meanest lawyers that money can buy - the one commodity the US has in overabundance". This would no doubt make the Americans choke with burning wrath, but I like Lynn's stab at America's obsession with expensive, sometimes needlessly convoluted lawsuits
3. "BP needs to protect its shareholders" so BP should sell its American assets and just withdraw from America and focus on other markets
I think the blood of the Americans must be boiling as they read this, but I think the one lesson they need to take away is to cut on the addiction to oil, or accidents like this may not be the only one. It is promising that President Barack Obama is acting on alternative clean energy sources, but there needs to be action soon and fast.
Impact of Oil Spill in Gulf of Mexico
By Wei Seng
At what cost this oil spill?
If you have been following the news in recent weeks, there has been a huge oil spill from a damaged oil rig off the coast of America in the Gulf of Mexico. The scale of the oil spill is supposed to be even greater than that of the biggest ever in history, the Exxon-Valdez oil spill in Alaska in 1989 (you could visit this Time magazine photo gallery for a brief history). The costs in terms of the current oil spill (oil continues to spill from underground, and continues to spread towards the American coast, as this Time magazine article reports) continue to increase, not just in terms of economic but environmental, social and political.
The coast of Louisiana and Florida, which surround the Gulf of Mexico, contain sensitive habitats of many already-threatened wildlife. The spread of the oil slick towards these vital marshes and wetlands would exact a heavy ecological and environmental cost. Fisheries located off the coast would also be badly affected, and considering that America gets a significant proportion of its local fish from the waters here, the damage to the fishing industry as well as the threat to supplies of fish loom large. Details here.
The political cost of this disaster is potentially heavy too. President Obama will be judged on how he deals with this crisis, just like how President Bush was judged on how he dealt with Hurricane Katrina. His promise to expand offshore drilling will probably have to be reneged given how unpopular offshore drilling now will be thanks to this disaster. Environmentalists, while agonising over the damage to the ecology and environment of the Gulf of Mexico and surrounding coast, perhaps would be glad that at least a moratorium on offshore drilling will be re-imposed. As this Time magazine article reports, while expanding offshore drilling will support President Obama's energy strategy of diversification of energy sources and relying less on Middle Eastern / external sources of oil, this disaster has just complicated his strategy as it would be very unwise and unpopular to continue with offshore drilling. Even Republicans that used to support offshore drilling are now saying "NO!" because of the impact of the spill. While I would certainly be happy if offshore drilling is stopped, it would not solve the problem of reliance on the Middle East for oil. But hopefully this may mean a more in-depth consideration of other alternative energy sources: renewable sources such as solar energy amongst others. Unfortunately, given that offshore drilling was a concession to Republican demands in America's energy policy, now that offshore drilling will be off the table is there anything (realistic) that can bridge the divide between the Republicans and Democrats?
In addition, if offshore drilling is not permitted in America, oil imports have to continue from other countries, most of which have very lax environmental standards much worse than America's. While environmentalists in America may rejoice, environmentalists in other oil-producing countries may see their woes increase. All in, quite unsavoury choices that need to be made in the aftermath of the oil spil, but there's still that glimmer of hope that alternative, renewable energy will prevail.
Your oil comes from… Venezuela?
By Wei Seng
Pipe Source Unknown...
Following up from my write-up on why petrol is expensive in oil-producing Alaska, another article written by The Green Conservative Jim DiPeso in The Daily Green argues that pumps should feature where their oil comes from. And the reason for such features are not just for the geography student like me keen to know where my products come from.
"Country of origin labels on gas pumps" are being advocated in the USA, the land where federal regulations dictate that agricultural products be labeled for their country-of-origin and customers like to demand for the right to knowledge about the products they consume. It helps people choose which country's oil they want to use, and hence avoid supporting "despots" like Hugo Chavez of Venezuela or Vladimir Putin of Russia. But it will be too complicated, as much as it sounds like a really cool idea. As mentioned in my previous write-up, all that oil from different countries are pooled together then sold, so chances are the gas / petrol in your tank comes from all over the world literally. An alternative he suggests is the proportion of oil coming from which country, so consumers get to know.
And perhaps choose to boycott petrol stations that buy oil from "evil" countries to sell. (Venezuela, Iran & Russia for starters...) Not that they would have much of an option, considering that coincidentally many oil producing countries happen to be rather undesirable in aspects ranging from democracy and freedom of expression to living standards, so if you wish to make a statement you'd probably have to stop driving to stop using petrol.
Drill, baby, drill… not!
By Wei Seng
Just keep digging...
I subscribe via email to The Daily Green, a website that advocates green consumption as well as champions environmental initiatives by the green movement. I chanced upon this article on high gas prices in Alaska one day in my email. It took me by surprise because one would think that since Alaska produces quite a significant amount of America's gas (gasoline, referred to as oil or petrol in the Singaporean context), one would be surprised by how expensive petrol can be in Alaska. And what caught me by greater surprise is that this article was written by a green Republican! Jim DiPeso, The Green Conservative of The Daily Green, is policy director of Republicans for Environmental Protection, and if you, like me, used to think that Republicans do not believe in saving the environment, then you thought wrong.
Coming back to this article, in the "Land of Sarah Palin", to have oil prices higher than the rest of the country and to have stage legislators calling for fuel price regulations would be a surprise given our assumptions that Alaskan oil would fuel the state and that Republicans are against price controls or regulation. The article highlights the components of the cost of petrol, and highlights that essentially all that crude oil pumped out of Alaska goes into the global market, subject to global market pricing, which is subjected to influence by OPEC (Organisation of Petroleum Exporting Countries) as well as influence by global events that will affect demand and supply of crude oil worldwide.
In addition, Alaska's petrol market is described as oligopolistic, i.e. players have more pricing power in a relatively-small state with little competition in supply of petrol compared to other states. Given that competition in refining and distribution of petrol is limited in Alaska, the prices would probably already been higher even if Alaskan oil went straight to Alaska. The fact that petrol producers in Alaska even need to import crude oil from other countries will debunk the myths about Alaskan-produced oil.
So essentially, the "drill, baby, drill" lobby who claim that the answer to lower petrol prices would be to open up more oilfields in Alaska are quite mistaken. Looks like The Green Conservative is pitting himself against other Republicans who belong to that lobby. And perhaps the solution might turn out to be more competition instead, which is something the Republicans should focus on instead of drilling their way out of an energy crisis in America (and give the environment a reprieve!)
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