There's a lot of interest in the inedible jatropha, but can this rough-and-tumble weed ever really take the place of Big Oil?
An ugly, toxic, tough-skinned weed has made a bit of a splash in recent weeks as a renewable energy source that wields a unique distinction: a decent shot at commercial viability. Oil made from the seeds of the jatropha plant, native to Central America and used for centuries as a hedgerow, has helped to power test flights by Air New Zealand (AIZ.AX), Japan Airlines (9205.T), and Continental Airlines (CAL) in the past six weeks. The oil's ability to replace kerosene-based jet fuel has provoked cautious optimism among researchers aiming to speed the aviation world's transition from crude oil.
Pilots ran the jet engines through a battery of tests, including complete shutdowns and restarts, to investigate jatropha's legitimacy as a jet fuel. "From a technical perspective, it performed flawlessly," says Darrin Morgan, director of sustainable biofuels strategy for Boeing (BA). The airplane maker is part of the Sustainable Aviation Fuel Users Group, a consortium that includes nine airlines and UOP, a Honeywell (HON) subsidiary focused on fuel technology. Created in 2008, the group's goal is eventually to power jets with alternatives such as jatropha, algae, and camelina, a prairie grass.
Jatropha has long been used as a hedgerow and, less frequently, as a parasol to shade coffee crops. Its leaves have been used as a pesticide, its bark for dye, and its oil for soap. One of the so-called third-generation of biofuels, which includes algae and switchgrass, jatropha yields more energy than oils derived from soy or corn and avoids the food vs. fuel debate. Its fruit is poisonous and, like any weed worth its name, jatropha can grow on non-arable ground, such as sub-Saharan Africa and India, the current leading grower.
While soy can produce 60 gallons to 100 gallons of oil per hectare (2.5 acres) each year, jatropha's pressed seeds yield roughly 600 gallons of amber-tinted oil. Its durability in conditions that would make other plants wither, plus its 40-year lifespan, has created a bit of a mythology. "There's a lot of hype it can grow on the side of a cliff, upside down, with no sunlight," jokes Sanjay Pingle, president of Terasol Energy, a plant biotechnology company.
A Tiny Blip So Far
For many, the idea of a rough-and-tumble weed supplanting Big Oil holds a certain romance, but Morgan and others believe jatropha can claim a legitimate future in the energy business. Yet for all of jatropha's success as an easy-to-refine "drop-in" jet fuel, it remains a very tiny green blip on the radar of energy policy. Still, with a new Administration friendlier toward renewable energy, that blip could grow. President Barack Obama's stimulus package includes $18 billion to spur research into renewable energy.
Jatropha backers' delight is tempered by several enormous challenges: There's no commercial quantity at the moment, even in the distant countries where it is cultivated, and the refined oil's production faces several critical hurdles. The plants require two or three years to produce their first full fruit, and seed oil won't hit the world market in bulk for another year or two. Compounding the immediate shortage is that the fruit clusters don't ripen simultaneously, making mechanization impossible. Through agronomy, and altering the plant's genetic makeup, jatropha researchers say both problems are fixable.
Most biofuels, such as the common ethanol gasoline additive, also exact an expensive physical toll on supply chains. Ethanol corrodes pipelines and biofuels strip off loose particles, which contaminate the oil supply. Another major issue to address is jatropha's need for warm climes. Even 48 hours in frost typically kills the plant, making it difficult to cultivate in most of the U.S. Until plant geneticists can overcome frost problems, U.S. companies will likely import the oil by ship from South America, Asia, and Africa.
If jatropha alone isn't ready to fill petroleum's large shoes, biofuels researchers are also exploring algae. Algae can be grown almost anywhere, although in the wild well-fed algae is particularly appealing to birds, fish, and microorganisms hunting their own fuel. An added advantage of coastal cultivation is that algae farms could be near refineries, connecting two parts of the supply chain that can be easily linked to shipping routes. Algae can be harvested multiple times per day rather than a few times per year, and an acre produces an estimated yield of upwards of 5,000 gallons annually—100 times more than soybeans. Will Thurmond, president of Emerging Markets Online and author of Biodiesel 2020, witnessed the Jan. 7 Continental flight as a volunteer with the National Algae Assn. Synthetic biology company Solazyme, which counts Chevron (CVX) as an investor, brews algae near San Francisco, fattening it on sugar and sawdust. "Brewing it is just like Budweiser," Thurmond says.
For a market to open, algae producers need to start mass producing. But first, they need to perfect the process. Thurmond compares the third-generation successes with making a perfect batch of beer at home. "What happens when you want to make 100 million gallons of that?" he asks, alluding to unexpected impurities and manufacturing problems. South San Francisco-based Solazyme is already cutting production costs—over the past three years, the company says its price per gallon has dropped from $3,000 to $8.
Jatropha's price point is still wide open. Without mechanized harvesting, mass distribution simply will not happen. Terasol Energy planted 13,000 acres of oilseed plants, including jatropha. For undeveloped regions, a lack of large industrialized farming competition is a blessing since the harvest provides manual labor. Since jatropha's seed is 35% to 40% oil, pressing is typically done near the crops to reduce weight and shipping costs. In South Africa, Tanzania, East Africa, and Southeast Asia, plants are sprouting by the millions of acres. The Indian government doled out 30 million seeds with a guarantee to buy back citizens' plants. Boeing is collaborating with the Yale School of Forestry & Environmental Studies to develop a plan for large-scale jatropha cultivation, and schools such as the University of Florida and the University of California at Berkeley are also researching the plant. Even with crude oil back to $40 per barrel, the European Union carbon caps that start in 2012 are incentive for international aviation to start moving quickly. "Mankind is pretty good when there's a need," says Jennifer Holmgren, director of renewable energy and chemicals for UOP, the Honeywell subsidiary.