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    Oil prices reach record highs as the U.S. Energy Information Agency releases a report that showed crude oil inventories fell by more than seven million barrels last week. The rise comes despite a decision by the international oil cartel, OPEC, to raise its output quota by 500,000 barrels. Reuters - September 12, 2007.

    OPEC decided today to increase the volume of crude supplied to the market by Member Countries (excluding Angola and Iraq) by 500,000 b/d, effective 1 November 2007. The decision comes after oil reached near record-highs and after Saudi Aramco announced that last year's crude oil production declined by 1.7 percent, while exports declined by 3.1 percent. OPEC - September 11, 2007.

    GreenField Ethanol and Monsanto Canada launch the 'Gro-ethanol' program which invites Ontario's farmers to grow corn seed containing Monsanto traits, specifically for the ethanol market. The corn hybrids eligible for the program include Monsanto traits that produce higher yielding corn for ethanol production. MarketWire - September 11, 2007.

    Ethanol Statistics, a new industry information resource, reports that U.S. petroleum refiners Citgo and Valero are the top 2 ethanol importing companies in the United States in the first 6 months of 2007. Overall imports were up 7.64% compared to the same period in 2006, from 193,620 gallons to 208,404 gallons. Chevron imported 43% less, whereas Noble and ConocoPhilips' imports were up 255% and 372% respectively. Data are reported in 'The United States Ethanol Market 2007’, which also provides a breakdown of U.S. ethanol production costs and a detailed analysis of U.S. consumption and production. Ethanol Statistics - September 10, 2007.

    The government of British Columbia launches a $100,000 study into the production of biogas, heat, power and clean water from household waste streams. Raw sewage water can be cleaned by microbial fuel cells that deliver electricity as they clean the water; other technologies include classic anaerobic fermentation. Canada.com - September 10, 2007.

    Saudi Aramco in its Annual Review 2006 said that last year the company's crude oil production declined by 1.7 percent, while exports declined by 3.1 percent, compared with the previous year. Crude oil production in 2006 averaged 8.9 million barrels of oil a day (b/d) and exports 6.9 million b/d. Saudi Aramco - September 9, 2007.

    Chinese packaging manufacturer Livan Biodegradable Product Co. Ltd. will build plants in Alsozsolca and Edeleny in eastern Hungary at a combined cost of €18 million by 2009, the Hungarian economics ministry says. The plants, which will employ 800 people, are planned to produce initially 50, 000 metric tons a year of environmentally-friendly packaging material, and double that amount by a later date. Livan will use corn to manufacture biodegradable packaging boxes with similar properties to petroleum-based plastic boxes used in the food industry. Dow Jones Newswires - September 7, 2007.

    South Korea aims to raise biodiesel content in domestic diesel to 3 percent from the current 0.5 percent by 2012, Seoul's energy ministry said today. The government was initially set last year to impose a mandatory 5 percent blend, in line with the level targeted by the European Union by 2010, but the country's powerful refining lobby opposed the move, forcing it to push back the target, according to market sources. Reuters - September 7, 2007.

    Virent Energy Systems, Inc. announced today that it has closed a US$21 million second round of venture financing. Investor interest in Virent was driven in large part by the Company’s continued development of its innovative BioForming process beyond its traditional hydrogen and fuel gas applications and toward the production of bio-based gasoline, diesel, and jet fuels. Virent Energy Systems - September 6, 2007.

    The U.S. National Ethanol Vehicle Coalition (NEVC) announces that 31 models of motor vehicles will be offered in the U.S. with an E85 capable engine in 2008. Chrysler, Ford, General Motors, Nissan and Mercedes Benz will all offer flexible fuel vehicles (FFVs) in the coming year. The NEVC expects 750,000 such FFVs will be produced in 2008. National Ethanol Vehicle Coalition - September 5, 2007.

    GreenHunter BioFuels, Inc., has begun commercial operations with the start-up of a 1,500 barrel per day methanol distillation system. Methanol is an alcohol used to transesterify vegetable oils into biodiesel. The methanol production facility is a key element of GreenHunter's 105 million gallon per year biodiesel refinery, the largest in the U.S., slated for initial operations during the first quarter of 2008. PRNewswire - September 5, 2007.

    GreenHunter BioFuels, Inc., has begun commercial operations with the start-up of a 1,500 barrel per day methanol distillation system. Methanol is an alcohol used to transesterify vegetable oils into biodiesel. The methanol production facility is a key element of GreenHunter's 105 million gallon per year biodiesel refinery, the largest in the U.S., slated for initial operations during the first quarter of 2008. PRNewswire - September 5, 2007.

    Spanish renewables group Abengoa released its results for the first half of 2007 financial year in which its consolidated sales were €1,393.6 million, which is a 27.9 percent increase on the previous year. Earnings after tax were €54.9 million, an 18.6 percent increase on the previous year's figure of 46.3 million euro. Abengoa is active in the bioenergy, solar and environmental services sector. Abengoa - September 4, 2007.

    Canadian hydro power developer Run of River Power Inc. has reached an agreement to buy privately owned Western Biomass Power Corp. in a $2.2 million share swap deal that could help finance development of new green sources of electricity in British Columbia. The Canadian Press - September 4, 2007.

    As of Sept. 1, a biodiesel blending mandate has come into force in the Czech Republic, requiring diesel suppliers to mix 2 per cent biodiesel into the fuel. The same rule will be obligatory for gasoline starting next year. In 2009 the biofuel ratio will grow to 3.5 percent in gasoline and 4.5 percent in diesel oil. CBW - September 3, 2007.

    Budapest's first biofuel station opens on Monday near the Pesterzsébet (District XX) Tesco hypermarket. This is the third station selling the E85 fuel containing bioethanol in Hungary, as two other stations are encouraging eco-friendly driving in Bábolna and Győr. Caboodle - September 3, 2007.

    Canadian forest products company Tembec announced that it has completed the acquisition of the assets of Chapleau Cogeneration Limited located in Chapleau, Ontario. The transaction includes a biomass fired boiler and steam turbine with an installed capacity of 7.2 megawatts. Consideration for the assets consists of a series of future annual payments to 2022, with a present value of approximately $1 million. Tembec - September 1, 2007.

    Innovative internet and cable/satellite channel CurrentTV is producing a documentary on Brazil's biofuel revolution. Biopact collegues and friends Marcelo Coelho (EthanolBrasil Blog), Henrique Oliveira (Ethablog) and Marcelo Alioti (E-Machine) provided consulting on the technical, economic, environmental and social aspects of Brazil's energy transformation. ProCana - August 31, 2007.

    Oil major BP Plc and Associated British Foods Plc won competition clearance from the European Commission on to build a plant to make transport fuel from wheat in Hull, northeast England. U.S. chemical company DuPont is also involved. Reuters UK - August 31, 2007.

    The government of the Indian state of Orissa announced its policy for biofuel production which includes a slew of incentives as well as measures to promote the establishment of energy plantations. The state aims to bring 600,000 hectares of barren and fallow land under Jatropha and Karanj. At least 2 million hectares degraded land are available in the State. The new policy's other objectives are to provide a platform for investors and entrepreneurs, market linkages and quality control measures. Newindpress - August 29, 2007.

    Brazil's state-run oil company Petrobras said today it expects to reach large scale cellulosic ethanol production in 2015, with the first plant entering operations as early as 2011. Lignocellulosic biomass is the most abundant biological material on the planet, making up the bulk of the structure of wood and plants. In a first phase, Petrobras intends to use bagasse as a feedstock. Reuters / MacauHub- August 29, 2007.

    Seattle based Propel Biofuels, is announcing a $4.75 million first round of capital from @Ventures and Nth Power. The money will be used to help Propel set up and manage biodiesel fueling stations. BusinessWire - August 29, 2007.

    BioEnergy International, a science and technology company committed to developing biorefineries to produce fuels and specialty chemicals from renewable resources, announced today the closing of a major US$61.6 million investment that will provide funding for the Company’s three strategic initiatives: generating secure cash flow from its conventional ethanol platform, product diversification through the introduction of novel biocatalysts for the manufacture of green chemicals and biopolymers and the integration of its cellulose technology. BusinessWire - August 28, 2007.

    German company Verbio Vereinigte BioEnergie, the biggest biofuels producer in Europe, says it is considering plans to invest up to €100/US$136.5 million in a biofuel production facility in Bulgaria. The company wants the new facility to be located close to a port and Bulgaria's city of Varna on the Black Sea is one of the options under consideration. If Verbio goes through with the plan, it would produce both biodiesel and bioethanol, making Bulgaria a major source of biofuels in southeastern Europe. Verbi currently produces around 700,000 tonnes of biofuels per year. Sofia News Agency - August 27, 2007.

    Czech brown-coal-fired power plant Elektrárna Tisová (ETI), a unit of the energy producer ČEZ, could co-fire up to 40,000 tons of biomass this year, the biggest amount in the company’s history, said Martin Sobotka, ČEZ spokesman for West Bohemia. ETI burned more than 19,000 tons of biomass in the first half of 2007. The company’s plan reckoned with biomass consumption of up to 35,000 tons a year. Czech Business Weekly - August 27, 2007.

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Wednesday, September 12, 2007

Analysts: labor-intensive Jatropha not a magic bullet

The oilseed plant Jatropha curcas is often touted as a biodiesel crop that can be grown on poor soils and requires relatively few inputs. However, analysts warn that this new 'underresearched' biofuel plant currently faces three major problems: yields are unreliable, seeds are toxic, requiring careful handling, and harvesting the nuts is extremely labor intensive.

Jatropha remains a wild plant that has not yet undergone the heavy agronomic, biotechnological and commercial research cycles so typical of the major oilseed crops that currently dominate the market. This is changing rapidly as biotech companies are investing in improving the crop (e.g. Bayer CropScience and D1Oils/BP).

However, the woody perennial shrub has attracted interest in countries like India and China because it can grow on barren, marginal land and does not intrude on farmland needed to grow food crops. Trial projects have shown that the crop can blend it with local farm practises as it is easy to maintain and requires few upfront costs and fertilizer and water inputs. So far, no major pests or diseases have been identified for Jatropha.

Labor intensive

However, M. R. Chandran, adviser to the Roundtable on Sustainable Palm Oil, today told an oil and fats conference that the crop is very labour-intensive as each fruit ripens at a different time. It needs to be harvested separately and manually.

In an earlier overview of labor inputs needed for different energy systems, Biopact too warned that Jatropha may be too labor intensive and would require very cheap labor to make economic sense. The labor intensity of biofuel production can be a benefit, as it implies the creation of a large number of jobs (see the renewable energy jobs calculator). But in order to be socially acceptable, the production system must also allow an increase in wages over time. Else, a situation akin to plantation slavery emerges in which laborers are kept in perpetual dependence, and the social potential of biofuel production evaporates.

In short, a balance must be found between labor intensity and the potential to take laborers along in an upward trend towards increased incomes. A crop like palm oil, also harvested manually, yields far more oil (energy) per man-hour, but still provides many jobs - a perfect balance (see table, click to enlarge).

Moreover, the very essence of an economic energy system is to produce as much energy as possible with as few energy and labor inputs as possible. Jatropha clearly faces a problem there:
:: :: :: :: :: :: :: :: :: ::

A second difficulty with Jatropha lies in the fact that its nuts and leaves are toxic. These toxic qualities have been exploited in traditional medicine across the developing world, where concoctions of Jatropha substances are used to heal wounds and treat a great variety of ailments (hence its popular name, the 'purging nut'). The plant can also be found in many West-African villages where it is used as a natural hedge to protect fields from grazing animals, who spontaneously stay away from the poisonous plant. But now that Jatropha production is being scaled up as a biofuel crop, the toxicity of the seeds may become a hazard for the people who have to harvest and process the seeds.

Research is needed to understand potential health risks for harvesters and handlers at the processing plants. An engineer specialising in oil and fat processing plants, including for biodiesel production, said special facilities were needed for crushing jatropha nuts as they could produce a toxic vapour. However, the same engineer, who declined to be named, is optimistic and said his company hoped to seal a deal with a private investor to build one of the world's first large-scale jatropha-based biodiesel plants in China's southern province of Yunnan before the end of this year.

Finally, so far Jatropha has not enjoyed much professional efforts to improve its productivity. According to analysts, it would take at least five years of intensive breeding and plant improvement before the crop could achieve productivity that would make its cultivation economically viable.

The oil yield of current wild species is less than 2 tonnes per hectare with large swings from year to year. Compare this with palm oil, yields of which are around three times as high, with continuous plant improvement research leading to varieties that yield ever more.

In short, jatropha still faces major difficulties to make it as an attractive biofuel crop. Some caution is required by potential investors who should not be blinded by the current hype surrounding the plant. On the other hand, most of these problems may be solved over the coming years. There is no reason to assume that the crop would be resistant to yield improvements. According to several sources, classic breeding techniques will possibly result in varieties with twice the productivity of wild plants. Modern biotechnology could develop genetically improved Jatropha, even though this would be controversial.

When it comes to the toxic nature of the seeds, several initiatives are already underway to turn this into a benefit: researchers hope to utilize the toxins in pharmaceutical applications (earlier post). Simple technical interventions and the establishment of safety procedures at seed crushing mills and biodiesel plants may offer solutions to the health risks that could emerge in the processing stage.

The labor question remains. However, Biopact knows that several organisations are currently researching mechanical harvesting techniques for Jatropha. They basically come down to systems that resemble olive harvesting machines ('tree-shakers'). It remains to be seen whether these techniques become viable, as jatropha continuously yields ripe nuts without there being any clear 'harvest' season.

Reuters: Toxic jatropha not magic biofuel crop, experts warn - September 12, 2007.

Biopact: D1 Oils and BP to establish global joint venture to plant jatropha - June 29, 2007

Bipact: Interview: DaimlerChrysler, farmers see great future in jatropha - June 30, 2007

Biopact: Renewable energy jobs calculator - August 07, 2007

Biopact: Jobs per joule: how much employment does each energy sector generate? - September 01, 2006


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