Biofuels – Targets through 2025

Anyone interested in what the Indonesian government is doing to diversify its energy needs, reduce dependence, and use of oil. Read away.

The government is positioning itself to make a concerted effort to see Indonesia move from its increasing dependence on oil as its primary energy source to a more diversified energy supply. This diversified energy supply is set to include biofuels. Biofuels include Biodiesel, Bioethanol, and Pure Biofuel.

The Minister of Energy and Mineral Resources Regulation, No. 32 of 2008, is the coming to fruition of an early draft on the same subject matter. Generally, the provisions of the original draft have been retained in the now enacted Regulation. The primary difference is that the Regulation includes an Attachment that sets out targets for Biodiesel, Bioethanol, and Pure Biofuel targets starting in January 2009 and running through January 2010, 2015, 2020, and 2025.

The targets are not fixed for 2015, 2020, and 2025. For these years the actual target will depend on global circumstances at those specific times. Nevertheless, the Regulation sets a target for 2025 of 20% for biodiesel, of 15% for bioethanol, and 10% for pure biofuel.

Oil Revenue

I think I should do a little research on this one and produce a more comprehensive post on the following little fact.

Over the past 12 months ExxonMobil’s revenues—$404 billion—exceeded the GDPs of more than 160 countries.

I wonder what the executive pay packets at Exxon looked like with base salaries and bonuses all tallied up and together?

The question that springs to my mind is why some oil producing countries like Nigeria, Iran, and Iraq, to name but a few, are in such dire straits with regards to human development? Obviously the trickle-down effect does not work in the oil markets.

Rising Fuel Prices

A recent study by the CSIRO in Australia, Fuel For Thought, suggests that fuel (petrol) could reach AUD 8 per litre within ten years. This is expected to add about AUD 220 per week to the expenses of anyone running a medium sized car by 2018. This rapid rise is premised on an ever-decreasing supply in a time of ever-increasing demand. Simple economics really.

It would therefore make sense that now is a good time for investment in cars that are more fuel efficient and perhaps even into alternative fuels. It is much more than just reducing our carbon footprints and saving the world from a self-induced inferno. There is a genuine need for us to innovate with respect to energy in order to survive.

Once we have burned all our fossil fuel supplies and we have drilled every where there is to extract each and every last drop of the black gold, then what? Then what will be our chance to see Darwinian theory up close and personal, as only the fittest will survive!

Perhaps the report is not all gloom and doom, but it certainly does not paint a rosey picture of the future. There are a lot of assumptions and theorizing in the report that seems to require certain things to happen and certain times and quite often simultaneously in order to make the numbers work.

In a move to alternative fuels such as ethanol from maize there are inherent problems. One such problem has already come to the fore. More people are planting maize and selling it to fuel producers because they get a better price for it. This means that there is less maize in the market place and there will ultimately be food shortages which in turn drive up the cost of foodstuffs generally. Pressure from another angle.

These pressures will increase as the world reaches the peak oil limit. Peak oil simply is where production rises to a peak and then begins to decrease as no new reserves come on line or are discovered.

What is clear is that we should expect an increase in the price of petrol at the pump.

The report deals with the impacts in Australia. I might have to write a post on how peak oil might play out in the very inefficient Indonesian setting. It is scary just to think about as oil is still heavily subsidized here. The photo was taken from here.

Uncle Sam and Oil Dependence

Something for the cynic in all of us.

Zimbabwe

The Dictator

The Opposition Leader

The Economy

I am not a person that has an in-depth knowledge of Africa or the African Continent and perhaps I am batting out of my league with this post. However, that is not the point as I am not intending to provide any analysis of the situation per se but rather pose a question or two.


The economy in Zimbabwe is spiralling out of control with inflation running at more than 1000% and this is forcing the government to print money (above picture) and this then puts even more pressure on the economy. It is sad that the Zimbabweans have gone from being the bread basket of Africa to being its biggest basket case.


The current leader is proud of being compared to Hitler and has gone on the record as saying he would like to be Hitler ten-fold. He is running an election campaign that is relying on violence to get the desired outcome. This has surprisingly brought out a little spine in the British government, the former colonial masters, who have publicly named the individuals that they believe are orchestrating the campaign violence.


The opposition leader, Morgan Tsvangirai, has pulled out of the run-off poll. This means a default win for Mugabe. Yet, Tsvangirai has a point in that the risks to people to come out and vote are high, particularly when one considers that Mugabe appears intent on keeping power by any means necessary. Reports of intensifying violence are increasing.


It seems abundantly clear to me that Mugabe is a tyrant and a dictator determined to do whatever it takes to cling to power. This includes not only running the Zimbabwean economy into the ground but also arbitrarily arrest, torture, and kill his own people if necessary in order to cling to power. The only difference that I see between Mugabe and Saddam Hussein is that there is no false claims about Mugabe having weapons of mass destruction and Zimbabwe has no oil.


So, here is my question:


Why is it that the US felt the need to go into Iraq to remove a nasty dictator and then call on the rest of the world to come into a coalition and support them, but they do not seem to feel there is any need to do the same thing with an increasingly violent dictator in Zimbabwe?


Call me a cynic but is it because there is no oil?

Fuel Prices At The Pump

The Indonesian government's recent decision to jack up the fuel prices here in Indonesia was met with some isolated but fierce demonstrations. Isolated because many of them were one off and have yet to be repeated. This tends to give the impression that in most cases the demonstrators were of the rent-a-crowd variety.

Nevertheless, the reduction of the fuel subsidies is going to have a significant impact on the great number of Indonesians living on or under the poverty line. Estimates put this figure at somewhere near 40 million people. The jacking up of the fuel prices is going to impact on the middle and upper classes as there is likely to be fuel-based inflation in prices of most goods. Yet, the impact will be minor compared to others.

In any event this got me to thinking. Australians, at least Sydney-siders, are now paying record prices for fuel at the pump. The price last night in Sydney has reached 171.9 cents a litre. When I left my homeland the price of fuel at the pump was under AUD 1. How times have changed!

The thinking part comes on this point though. Indonesians are now paying around IDR 6,000 a litre for fuel. Considering they were paying IDR 2,500 a couple of years ago this is a significant hike. Nevertheless, if the 171.9 cents per litre is converted to IDR, then Australians are paying the equivalent of about IDR 16,000 per litre. Indonesians have still got it good in that sense.

100 Years of Oil

The beauty of the Internet is that I learn a little something every day in my travels through cyber space. One of the things I learned was that yesterday, 26 May 2008, was the 100th anniversary of the discovery of oil in the former Persia or modern day Iran.

So, it is fair to say that it was a discovery that changed world history and made lots of people very rich!

Who would have thought that such a discovery would lead to wars, violence, green house gases, the destruction of the environment, and myriad of other problems. But then again who would have thought at the time that oil would allow societies to ramp up their industrialization and become powerhouses of manufacturing and technology. Perhaps it is true there is always an argument for good and evil, the light and the dark; Alfred Nobel knew this better than most and we have an annual peace prize along with other Nobel Prizes on offer as testament to the evil inherent in all good when abused.

Rather than continue this rant into uncharted territories of my brain, the point really was to highlight that the 100th anniversary of the discovery of oil has just passed. Now, is a good a time as any for some reflection on from where we have come and to where we are heading.

The key players in this discovery over time have been William D'Arcy, Winston Churchill, Burmah Oil Company, Anglo-Persian Oil Company, Anglo-Iranian Oil Company, British Petroleum or BP, among others.