Tuesday, July 21, 2009

BP Burns the Jatropha Mirage

I may be eventually proven wrong, but I've never had any faith that jatropha would prove itself as a viable biofuel crop. Kids can grow on a marginal diet; that doesn't mean they thrive (link).

BP has indeed given up on jatropha, the shrub once touted as the great hope for biofuels, and walked away from its jatropha joint venture for less than $1 million.

Speculation abounded this summer that BP was ready to jettison its participation in the project with British partner partner D1 Oils. The original plan called for the investment of $160 million to turn the jatropha tree into feedstock to make transportation fuel. Now, BP will turn its alternative-fuel efforts toward ethanol in Brazil and the U.S., as well as biobutanol.

The not-with-a-bang-but-a-whimper end to BP’s jatropha adventure underscores a couple of key points. First, the inedible but hardy plant that just a few years ago seemed like it could revolutionize biofuels has turned into a bust. The initial attraction was that it grows on marginal land, so it wouldn’t compete with food crops. But marginal land means marginal yields. And jatropha turned out to be a water hog as well, further darkening its environmental credentials.

Second, for all the ink spilt over jatropha—and Big Oil’s interest in biofuels in general—the value of some of those investments really is miniscule. D1 Oils will buy out BP’s half of the venture for 500,000 pounds—less than the price of a nice apartment in London—even though the joint venture is apparently worth more than 7 million pounds.

And this wasn’t a piddling venture, as far as jatropha experiments go: Reuters notes that BP and D1 Oils planted more than 200,000 hectares of the stuff—25% of the worldwide jatropha planting.


Twenty-five percent? That's a lot.

- Brewskie

2 comments:

  1. Sad to say, jatropha looks like a tough sell. Palm oil trees, of course, do work. Pongamia Pinetta offers hope.
    I suspect oil from trees is a viable business model, in the right places. Indeed, in Louisiana, where water is cheap (New Orleans doesn't even bother to fix water leaks), pongamia pinneta might be a go.
    One hope in jatropha and other oi crops: We have only started on the improvment of these crops. Corn was the size of your little finger when man started to breed for size.
    It may be that jatropha, palm oil and pongamia can be breed for much higher yields. Palm oil yields are rising by about four percent annually.
    B Cole

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