The arrival of El Niño and its potential to bring hotter, drier weather to Southeast Asia will be a crucial test for the global palm oil industry to prove it’s no longer at fault for causing forest fires and choking haze.
Haze is a recurring problem in the region, disrupting tourism and costing local economies billions of dollars. It originates from natural or man-made fires in Indonesia and Malaysia, such as when land is cleared for agriculture, and is often linked to palm oil as both countries are the world’s biggest producers.
That’s a perception the industry’s fighting to fix. Palm oil is found in half of supermarket products around the world, but its association with deforestation has fueled consumer campaigns calling for its boycott. The European Union has also come up with regulations that reduce market access for palm oil.
The El Niño weather pattern is set to return this year, bringing drier conditions and increasing the risk of forest fires in Southeast Asia. This will be a test for the industry as it tries to repair its image, said Joseph D’Cruz, chief executive officer of the Roundtable on Sustainable Palm Oil, a certification body.
“Either we prove that the improvements that have been made over the last few years have allowed us to become more responsible stewards of the lands and environment that we have been entrusted with—or we simply prove our critics and our detractors correct in saying this industry hasn’t changed and all the efforts around sustainability are a facade,” he said in an interview.
Major producers in Indonesia and Malaysia have in recent years committed to zero-burning, and increased resources for monitoring hotspots and putting out fires. But local communities have a long history of setting fields ablaze as a cheap way to clear the land for growing oil palm, pulpwood and rubber trees.
The likelihood of fires is “almost inevitable” during an El Niño, D’Cruz said. A lightning strike or a cigarette stub tossed in dry grass could ignite peatlands. During a hot and dry spell, fires can very easily burn out of control.
The RSPO has started sending weather alerts to warn members of the risks of haze. It will provide guidelines in the coming days on how plantations can mitigate fires and ensure workers’ safety during the dry season.
“We have the experience, we have the systems in place to know how to respond,” D’Cruz said. The industry should be prepared this time, he added.
Alberta wildfires
The wildfire situation in Canada’s top energy-producing province of Alberta remained volatile Saturday, while the disruptions to oil and gas production now have buyers facing supply cuts.
At least two buyers were notified this week of force majeures and cuts of 5 percent or more to their receipts of low-sulfur Canadian crude this month, according to people familiar with the matter. Pembina Pipeline Corp. also declared force majeure on its Peace Pipeline system, which carries natural gas liquids from western oil and gas fields to the Edmonton area, according to two people who received the notice.
In all, the equivalent of about 240,000 barrels of daily oil and gas production—and perhaps more than 300,000 barrels—have been shut due to the fires, consultant Rystad Energy estimates. A total of 86 wildfires were burning in Alberta as of Saturday evening, down by seven from Friday, while the number of out-of-control blazes was steady at 26, provincial data show.
More than 2,800 firefighters from Canada and the US are on the ground, dealing with hot, dry and gusty conditions, Christie Tucker, a spokeswoman for Alberta Wildfire, said Saturday.
Image credits: Bloomberg