As Alternative Energy Heats Up,
Environmental Concerns Grow
By PATRICK BARTA and JANE SPENCER
December 5, 2006; Page A1
PONTIANAK, Indonesia -- Investors are pouring billions of dollars into "renewable" energy sources such as ethanol, biodiesel and solar power that promise to reduce the world's reliance on petroleum. But exploiting these alternatives may produce unintended environmental and economic consequences that offset the expected benefits.
Here on the island of Borneo, a thick haze often encloses this city of 500,000 people. The cause: forest fires that have blazed across the island. Many of them were set to clear land to produce palm oil -- a key ingredient in biodiesel, a clean-burning diesel fuel alternative.
Such side effects are not an isolated problem. In Indonesia, Malaysia, Canada and elsewhere, forests are being slashed for new energy-yielding crops or other unconventional fuels. In India, environmental activists say, water tables are dropping as farmers try to boost production of ethanol-yielding sugar.
"Let's be brutally frank: [The push for alternative fuels] is going to cause significant changes for the environment," says Sean Darby, an equities analyst and expert on alternative energy companies at Nomura International in Hong Kong. He is most worried about the strain on water resources caused by accelerated crop production. Water, he says, is "just as precious" as oil.
Some experts are also concerned that crops for biofuels will compete with other farmland, possibly driving up global costs of basic food production.
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