Former weed may fill world's fuel tanks
In the world's most arid agricultural environments, jatropha is emerging as an alternative to ethanol.
By Mark Sappenfield | Staff writer of The Christian Science Monitor

JAGDALPUR, INDIA

In an overgrown corner of Moolchand Sethia's plantation, runty and unloved, stands what could be the next revolution in the world's search for renewable fuel.

From China to Brazil, countries have begun setting aside tens of thousands of acres for the cultivation of jatropha – a plant many experts say is the most promising source for biodiesel. At the same time, companies from Europe and India have begun buying up land throughout Africa to establish jatropha plantations.

As American farmers plan to plant the most corn since World War II to cash in on ethanol, which is added to gasoline, much of the rest of the world is turning to jatropha, which is used as a substitute for diesel fuel.

The two are not competitors, since neither can be used in the other type of fuel. But jatropha is fast emerging as a candidate for the ideal biofuel. It is grown in wastelands, needs relatively little care or refinement, and is inedible – meaning it will not take food from the poor for the gas tanks of the rich.

But Mr. Sethia's modest plantation is a reminder that jatropha has a long way to go. Although Sethia's home state of Chhattisgarh has been one of India's leading jatropha promoters, industries say it could be years before they begin production here. Until then, Sethia laments, the $1,500 he has invested in jatropha has been wasted.

Globally, experts worry that the story could be similar. Lured by jatropha's potential, nations and corporations have acted rashly, coming to the "idea that it is the final answer for many problems," says Kees Daey Ouwens of Fuels from Agriculture in Communal Technology (FACT) in Eindhoven, The Netherlands.

It could be. But it is too early to tell. "Jatropha is very promising," he says. "But there is not enough information … to start on such large scales."

There is no estimate as to how much jatropha is being cultivated globally, but anecdotal evidence suggests that the trend is accelerating:

• The government-owned China National Offshore Oil Corp. (CNOOC) is planning to have 80,000 acres of jatropha in Sichuan Province alone by 2010.

• Renova Biodiesel of Brazil is expected to plant 60,000 acres of jatropha, and reports suggest that other oil companies are considering planting nearly 500,000 acres in the next four years.

• D1 Oils, a British company that is considered by many to be the leader in jatropha cultivation, has plantations from Swaziland to Indonesia, and hopes to nearly double its 385,000 acres of jatropha worldwide by the end of 2008.

• The Philippine National Oil Co. recently earmarked $14 million for jatropha planting and production, while Indonesia plans to set up 52 biodiesel plants across the country at a cost of $7.3 million.

The cause of the excitement is both environmental and economic. The European Union has mandated that by 2020 all cars must run on 20 percent biodiesel, which burns cleaner than fossil fuels. A 1998 study, jointly sponsored by the US Department of Energy and the Department of Agriculture, concluded that biodiesel reduces net carbon-dioxide emissions by 78 percent compared with petroleum diesel.

Meanwhile, Asian economies are desperately seeking natural resources to support their growth. India, for example, imports 70 percent of its fuel, and its planning commission has prioritized the study of domestically grown biofuels in an attempt to become more self-sufficient.

Jatropha is a natural answer. The leafy bush thrives in arid regions around the equator, has no use as food, and takes little refinement: a hydraulic press to squeeze the oil from the seeds, and a chemical solution to create and filter the fuel. When the necessary infrastructure is in place – sufficient farms, transport routes, and processing plants – jatropha oil could be no more expensive than regular diesel.

"In 10 years, the production prices will not be much different," says Mr. Daey Ouwens.

Along with several other states, Chhattisgarh has responded with massive planting campaigns and incentives for farmers, including 500 free saplings. Sethia received a $250 loan for planting jatropha, as well as a commendation from the state. The problem is, there's no market here in the Indian outback.

The state says it will buy the seeds, which then must be crushed to create the oil. But Sethia says he would need to take his harvest to the capital, which is a half-day drive, at least. The cost of getting them there would outstrip any possible profit.

Then there's the fact that jatropha needs more care than he had anticipated. He has let most of his crop fend for itself. After two years, the plants are knobby fingers less than a foot tall. A few plants, however, he planted in a ruddy dirt embankment near a seasonal pond and tended regularly. Their leafy branches arch higher than Sethia himself and are already yielding seeds.

Right now, he says, the economics don't work. "But if there is a [processing] plant nearby, farmers will grow it, because there is the assurance that they will be able to sell it," he says. As it is, he knows of only one other person in the district growing jatropha.

For their part, oil industries are interested in building processing plants. But it will be several years before there is a critical mass in Chhattisgarh – about 50,000 acres – to justify the costs. "That has to come up," says B. B. Choudhary of Indian Oil. "It has not yet."

Yet there is also a danger in industries pushing too fast, experts say. Jatropha cultivation is so new that scientists know little about it, such as ideal conditions for growth, susceptibility to disease, or expected yields per acre. Some critics even suggest that toxic strains of the plant can cause health problems for workers.

The Energy and Resources Institute in Delhi has set up plantations across India to study these issues for British Petroleum. In four years, all these knowledge gaps will be filled in, argues Alok Adholeya, who manages the program.

He advises farmers like Sethia to remain patient: "If they are patient enough, they will find some buyers very soon, because the message is getting out."

http://yaleglobal.yale.edu/display.article?id=6817



As Brazil Fills Up on Ethanol, It Weans Off Energy Imports
David Luhnow
Geraldo Samor
The Wall Street Journal, 16 January 2006


RIO DE JANEIRO, Brazil -- After nearly three decades of work, Brazil has succeeded where much of the industrialized world has failed: It has developed a cost-effective alternative to gasoline. Along with new offshore oil discoveries, that's a big reason Brazil expects to become energy independent this year.

To see how, take a look at Gildo Ferreira, a 39-year-old real-estate executive, who pulled his VW Fox into a filling station one recent afternoon. Instead of reaching for the gasoline, he spent $29 to fill up his car on ethanol made from sugar cane, an option that's available at 29,000 gas stations from Rio to the Amazon. A comparable tank of gasoline would have cost him $36. "It's cheaper and it's made here in Brazil," Mr. Ferreira says of ethanol. If the price of oil stays at current levels, he can expect to save about $350 a year.

[Saving at the Pump]

At current prices, Brazil can make ethanol for about $1 a gallon, according to the World Bank. That compares with the international price of gasoline of about $1.50 a gallon. Even though ethanol gets less mileage than gasoline, in Brazil it's still cheaper per mile driven. As a result, ethanol now accounts for as much as 20% of Brazil's transport fuel market. The country's use of gasoline has actually declined since the late 1970s. The use of alternative fuels in the rest of the world is a scant 1%.

Yet countries wanting to follow Brazil's example may be leery about following its methods. Military and civilian leaders laid the groundwork by mandating ethanol use and dictating production levels. They bankrolled technology projects costing billions of dollars, despite criticism they were wasting money. Brazil ended most government support for its sugar industry in the late 1990s, forcing sugar producers to become more efficient and helping lower the cost of ethanol's raw material. That's something Western countries are loath to do, preferring to support domestic farmers.

With government support, sugar companies and auto makers' local units delivered cost-saving breakthroughs. "Flexible fuel" cars running ethanol, gasoline or a mixture of both, have become a hit. Car buyers no longer have to worry about fluctuating prices for either fuel because flex-fuel cars allow them to hedge their bets at the pump. Seven out of every 10 new cars sold in Brazil are flex-fuel.

Brazil is also fortunate that sugar is the cheapest way to make ethanol and Brazil has the right conditions for growing the crop -- plenty of land, rain and cheap labor.

Despite these unique circumstances, Brazil's efforts are being closely followed by countries with big fuel bills. India and China have sent a parade of top officials to see Brazil's program. India, the world's second-biggest sugar producer behind Brazil, mandated in 2003 that nine of its states add a 5% ethanol mixture to gas. The Brazilian unit of Germany's Volkswagen AG, the first car maker to introduce a flex-fuel model in Brazil, has received 38 delegations from more than a dozen countries in the past year alone, VW officials say.

Brazil says its ethanol exports will likely double to $1.3 billion in 2010 from $600 million in 2005, largely to Japan and Sweden. These countries hope using ethanol -- which releases less carbon dioxide than fossil fuels -- will help them meet their obligations under the Kyoto Protocol to cut emissions.

The U.S., which currently imports 60% of its oil, is watching Brazil's progress, too. Three members of the Senate Energy Committee recently visited, and Sen. Hillary Clinton has cited Brazil as a role model in cutting dependence on imported oil. When President Bush made a recent stop-over in Brasilia, Brazilian leader Luiz Inacio Lula da Silva hosted a barbecue and described to Mr. Bush how the country has reduced its oil import bill, according to Brazilian officials at the meeting.

The most recent U.S. energy bill, signed into law in August, calls for more than doubling ethanol use by 2012. But U.S. ethanol, which is made from corn, costs at least 30% more than Brazil's product, in part because the starch in corn must be first turned into sugar before being distilled into alcohol. It may take the U.S. a few more decades to bring the cost of ethanol down to 80 cents a gallon -- equivalent to Brazil's most efficient producers -- according to the U.S. Department of Energy. U.S. trade barriers make Brazilian ethanol and its sugar expensive to buy.

Using carbohydrates instead of fossil-fuels to run cars is not a new idea. Henry Ford's first car was made to run on ethanol. So was the first spark-ignition car engine, developed by German Nicolas Otto in the second half of the 19th century. During World War II, the U.S., Brazil and other nations relied on ethanol to extend gasoline supplies. In the postwar period, however, gasoline was so plentiful and cheap that ethanol lost its allure.

'Strategic Challenge'

The first oil shock in 1973, sparked by an oil embargo amid war in the Middle East, rekindled interest. Months after Syrian and Egyptian tanks rolled into Israeli-held territory, the price of oil quadrupled. Few places were hit harder than Brazil, which imported 80% of its fuel at the time. Within months, Brazil's economy slid into recession. About 40% of its foreign-exchange income was used to import oil.

"We faced a clear strategic challenge: How would we develop without oil?" recalls Eduardo Pereira de Carvalho, a finance ministry official at the time who now heads the São Paulo state sugar-growers' federation.

In 1975, Brazil's military leader, Gen. Ernesto Geisel, ordered that the country's gasoline supply be mixed with 10% ethanol, a level Brazil steadily raised to 25% over the next five years. That meant the same amount of gasoline would last longer. It also allowed Brazil to pay for fuel with local currency, in the form of payments to farmers.

To help the nascent industry, the government gave sugar companies cut-rate loans to build ethanol plants and guaranteed prices for their product. Sugar companies were delighted with the new market, which helped when prices were low. The government also funded Urbano Ernesto Stumpf, an ethanol researcher at a Brazilian Air Force laboratory, who was developing a car that would run on ethanol alone.

In November 1976, three ethanol-powered cars created by Mr. Stumpf -- a Beetle, a Dodge and a Brazilian car called a Gurgel -- embarked on a 5,000 mile trip from the air force's research lab in the southeastern state of São Paulo to the northern city of Manaus in the heart of the Amazon. The trip, christened "The National Integration Rally," aimed to demonstrate to Brazilians that ethanol really worked. When the government ordered state-owned companies to test ethanol engines in their fleet, the São Paulo state telephone company converted 400 gasoline cars into ethanol ones. They displayed the logo: "Powered by Alcohol."

After the 1979 Iranian revolution caused the world's second oil-price shock, Brazil sped up its efforts, initiating what became known as the Proalcool program. In Brazil, ethanol is called "alcool" (pronounced OWL-coal).

Brazil's new leader, Gen. Joao Baptista Figueiredo, ordered sugar companies to ramp up production. He also required state-run oil giant Petrobras to make the fuel available at filling stations. Car companies received tax breaks to get ethanol-powered vehicles into showrooms. By the end of the year, Italian car maker Fiat SpA was offering an ethanol-only car for sale. Within a year, every foreign and domestic auto company in Brazil had followed suit.

Big Hit With Consumers

The cars were hard to start on cold mornings because ethanol burns at a higher temperature than gasoline. Creating a fuel with 10% ethanol makes little difference to a car's performance, but anything above that, researchers have found, can cause problems. The mixture can corrode metal engine parts because of its high water content, for example.

Nonetheless, the cars were big hits with consumers, largely because government price supports made the fuel 35% cheaper than gasoline at the pump. Ethanol also helps acceleration, an advantage in a country where Formula One racing is a national passion. By 1983, nine out of every 10 new cars sold in Brazil ran on ethanol alone.

While motorists grew fond of the made-in-Brazil fuel, there was a cost in the form of hefty government subsidies. Consulting firm Datagro, which counts Brazil's biggest sugar companies as its clients, estimates that Brazil spent at least $16 billion in 2005 dollars from 1979 to the mid-1990s on loans to sugar companies and price supports. The Datagro estimate doesn't include foregone revenue from tax breaks as well as other costs to consumers.

In 1986, after civilians replaced generals in Brazilian politics, the world price of oil plunged, endangering the government's pledge to keep the price of ethanol below that of gasoline. In the following years, the country was battered by hyperinflation, prompting the International Monetary Fund and other creditors to urge Brasilia to rein in spending. In 1989, President Jose Sarney started cutting ethanol price supports. Sales of ethanol cars plummeted and some Brazilians felt the entire experiment had been a waste.

But the ethanol market never dried up entirely, thanks largely to the decades of groundwork. Sugar companies continued to make the fuel and learned how to cut costs, encouraged by a state requirement that all gasoline be mixed with ethanol. Gas stations still offered the fuel, which is taxed at just nine cents a liter compared with about 42 cents a liter for gasoline, according to World Bank estimates.

While other countries were busy mapping the human genome, Brazilian scientists at the Centro de Tecnologia Canavieira, a research lab funded by sugar growers, were decoding the DNA of sugar cane. That helped them select varieties that were more resistant to drought and pests and yielded more sugar content.

The center is located in the heart of Brazil's sugar country, about two hours drive from São Paulo. Giant satellite images of sugar fields help researchers identify which variety will grow best in which part of the country, where to locate new fields and the best time to harvest. Over the past 20 years, the center has developed some 140 varieties of sugar, which has helped lower growing costs by more than 1% a year, according to Jaime Finguerut, the center's director of ethanol research.

Other improvements include using remains of processed cane to power sugar and ethanol plants, and using industrial waste from ethanol production to fertilize sugar fields. As a result, the productivity of Brazil's ethanol producers has steadily increased. In 1975, Brazil squeezed 2,000 liters, or about 520 gallons, of ethanol from a hectare, or nearly 2.5 acres, of sugar cane. Today, it's nearly 6,000 liters.

As gasoline prices soared in recent years, ethanol rebounded. By 2002, its price was again competitive with gasoline and old ethanol-only cars started recovering their prestige. Last year, thieves stole an ethanol-only, 1994 Ford Royale, owned by Francisco Baccaro Nigro, one of the engineers who helped develop ethanol-only cars. "I'm sure it's because ethanol is cheaper," Mr. Nigro says. "Thieves know this."

One last step remained. Some consumers were leery of buying ethanol cars because they weren't convinced the fuel would remain cheaper than gasoline.

A Cheaper Device

[Fernando Damasceno]

Fernando Damasceno, chief engineer at the Brazilian unit of Italian car parts company Magneti Marelli, thought the solution was to create cars that ran on either fuel equally well. Ford Motor Co. had offered flex-fuel cars in the U.S. since 1991 but the Brazilians thought its flex-fuel device expensive and cumbersome.

Mr. Damasceno created a cheaper device by programming a standard car computer to constantly calculate the mixture of ethanol versus gasoline in the tank and adjust the engine accordingly. In 2002, the team sold the device to Volkswagen, which introduced its flex-fuel Gol the next year. Mr. Damasceno's black box is now sold by five major car makers in Brazil. Even Ford's Brazil unit uses the Damasceno device.

In Ford's newest ad in Brazil, an indecisive young boy can't decide between a pair of brown and red shoes. As a teenager, he can't pick between a blonde and a brunette at a party. The ad ends with the young man pulling up to a gas station in his Ford Ecosport. The attendant asks: "Alcohol or gasoline?" The man, happy he doesn't have to choose, raises two fingers, signifying both.



Source:
The Wall Street Journal

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