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An aerial view shows a cleared forest area under development for palm oil plantations in Kapuas Hulu district, Indonesia, on July 6, 2010.

CRACK PALINGGI/REUTERS

My last column pointed out that electric cars are only as "green" as the fuel used to generate the electricity they consume. For internal combustion-powered vehicles, much of the focus has been on trying to reduce carbon emissions by adding ethanol to gasoline and vegetable oil to diesel.

These "bio-fuels" are sourced mainly from cereal grain and vegetable oil. Ethanol is manufactured by fermenting and distilling grain, while vegetable oil comes mainly from palm trees. Bio-fuel production has become an enormous global industry producing some 100 billion litres annually. Mandatory ethanol and vegetable oil standards have been enacted in 64 countries.

But are bio-fuels really greener than the fossil fuels they displace? Answering this question needs to start with correcting the popular misconception that burning bio-fuel produces significantly lower emissions than gasoline or diesel. In reality, there's little difference. Essentially all of the hypothesized emission reduction relies on the premise that, since plants consume carbon dioxide to grow, the carbon they remove approximates the carbon released when burned. This is the basis for the bio-fuel industry's claim of zero net emissions.

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But just as the zero-emissions electric car fallacy ignores the environmental impacts of electricity generation, the zero emissions bio-fuel myth ignores the environmental impacts of production. And there's a lot of evidence that these production impacts are causing very serious environmental damage, while also exacerbating global food shortages and price escalations.

Let's start with ethanol fuel. The United States and Brazil are by far the largest producers. In the United States, some five billion bushels of corn are used annually to produce 13 billion gallons of ethanol fuel through the same highly energy-intensive fermentation and distillation process used to produce whisky. That 13 billion gallons of ethanol is enough to fill 65 billion standard-size whisky bottles.

Multiple studies, including that of the International Institute for Sustainable Development, have concluded that the fossil fuel used to produce corn ethanol creates essentially the same carbon emissions as the gasoline and diesel displaced. But that's only part of the environmental impact. Rising corn prices have led to the draining and tillage of ecologically important wetlands, while increased fertilizer use has caused nutrient rich run-off into streams and rivers, resulting in weed-choked, oxygen-starved water courses devoid of fish and other aquatic life.

Meanwhile, in Brazil, almost a million acres a year of carbon-dioxide-absorbing tropical forest are being clear-cut and replaced by sugar cane for ethanol production. Authoritative studies show that the net effect is about 50 per cent more carbon emissions than by fuelling automobiles with fossil fuels.

Then there's the food or fuel issue. The cereal grain required to produce enough ethanol to fill the fuel tank of an average-size car would feed one person for a year. In 2000, some 70 per cent of global corn imports came from the United States, but that important global food supply has largely been redirected to ethanol production. So while U.S. corn-belt farmers buy bigger tractors and more expensive pickups, international food-focused NGOs such as Oxfam cite bio-fuels as contributing to food-supply shortages and price increases that disproportionately hurt the world's poor.

What about the environmental impacts of producing palm oil for bio-diesel? Indonesia is the world's largest producer of palm oil. The Indonesian island of Borneo is a great place to produce palm oil, provided you first burn one of the world's most important rain forests. A visit to this land of endangered orangutans and aboriginal peoples is a depressing lesson in the unintended consequences of actions taken by politicians half a world away.

We encountered lung-choking smoke as hundreds of thousands of square kilometres of rain forest were burned to create huge industrial palm tree farms. The same scenario is playing out in remote parts of Indonesian Sumatra. How ironic that political decisions made half a world away aimed at environmental benefit are permanently destroying the lungs of our planet, wiping out endangered-species habitat and destroying the way of life of aboriginals who have lived in harmony with nature for centuries.

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A National Geographic article on bio-fuels states, "Gasoline and diesel are actually ancient bio-fuels … made from decomposed plants and animals that have been buried in the ground for millions of years." Trying to replace these ancient bio-fuels with fuels made from plants grown today will go down in history as one of mankind's greatest environmental blunders.

Gwyn Morgan is the retired founder and CEO of Encana Corp. He has been a director of five global corporations.

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