ankur

It isn't often that one hears of venture capitalists straying into anything connected to the environment; their focus has instead often remained fixed on things that might turn a profit really quick. So it was intriguing to find a casually dressed white polo-necked Vinod Khosla giving a formal dinner address at the Delhi Summit on Sustainable Development, organised by The Energy and Resources Institute (TERI) earlier this month. Khosla is a partner at the venture capital firm, Kleiner, Perkins, Caufield and Byers, whose ventures have included such famous brands as America Online, Sun, Genentech, and Amazon. He was a co-founder of Daisy Systems and founding Chief Executive Officer of Sun Microsystems, where he pioneered open systems. According to Wikipedia, "Vinod Khosla is a venture capitalist considered one of the most successful and influential personalities in Silicon Valley."

He was speaking on the subject of "Biofuels", which is itself unconventional. He declared straight away that he was talking about "energy with a different perspective: there are lots of energy technologies which are small, niche ... You don't need oil for cars and light trucks." His pitch was to switch, a la Brazil, to ethanol, which is a biofuel. It emits 80-90% less carbon, which is the main greenhouse gas associated with fossil fuels. Volkswagen, he said, was thinking of not making any more gasoline cars in Brazil, since ethanol in that country costs less than $35 a barrel. Surprisingly, he said, in California, there are as many cars running on ethanol as on diesel today. The potential is clear, he said, noting that even President Bush - himself an oilman - had cited ethanol in his recent State of the Union message.

His formula was Flex(ible) Fuel Vehicles or FFVs – in sharp contrast to the gas-guzzling and environment-unfriendly SUVs that are ubiquitous in California. These can switch from gasoline to ethanol, and only require minor modifications: different gaskets and a rubber hose. By relying on ethanol, Brazil was able to save $50 billion on oil imports. It not only saves 40% of the petrol used by cars but in the process, provides 22% more farm employment. FFVs there have jumped from just 3% of the total number of autos to 71% in three years.

In Khosla's simple arithmetic, with irrigation and other inputs, it would be possible to grow 20 tonnes of crops per acre and each ton of crop would yield 100 gallons of ethanol. Thus 50 million acres would generate as much as 100 billion gallons. Corn was expensive as the choice of crop; it would do only in the sort run. He recommended switching over to a tall grass called miscanthus in the US, which would yield a higher profit.

Bumps Ahead

Being a successful VC, who has persuaded hundreds of investors to opt for his pet projects in the past, he was pro-active enough to come up with three issues that he saw as potential obstacles to the path to biofuels. The first was 'land use'. The Natural Resources Defence Council, one of the most reputed American environmental bodies, has calculated that by 2050, the US would need to plant crops on 114 million acres to provide all the energy needed for road transport. This is not as much as one might think; for example, the US already pays farmers not to grow soybean on 40 million acres, simply to support them.

The second stumbling block, a fairly strong one, relates to the question of whether farmers use more energy (by way of irrigation, mechanization, fertilizer and pesticides) in producing these crops than is actually produced by them. In other words, an energy audit might reveal that there would be more calories expended in growing miscanthus than in the ethanol produced. This is especially troublesome, as the economic costs, especially in the developed world, are distorted by the hidden subsidies in growing many crops.

The final consideration was the impact on the environment, which he believed was a win-win situation, since the crops would both sequester carbon and the fuel would reduce the greenhouse gas emissions. However, this – when also related to land use -- is where Khosla's vision may not apply to developing countries, while it may make good sense in the US and Europe. The fact is that any conversion of land to produce ethanol, particularly if it is with crops like miscanthus that require fertile soil, could only be at the cost of food and fuelwood. In any poor country, there is a social dimension: a country like India cannot switch from producing crops for the public good to those that benefit only the minority of car-owners or industries.

Someone in the audience raised a different point, asking whether biocrops would only be practical in a country like Brazil, which is characterized by big farming estates and low employment. The obvious implication is that the situation is quite different in India, where the average holding is around 2.5 acres, with subsistence farming and low productivity. Khosla insisted that employment would increase with growing such crops, but that still leaves unanswered the question of whether such farmers then have to depend on an increasingly unpredictable market for their basic needs of foodgrain.

Khosla noted that the best "biomass belt" is around the equator, which puts developing countries at the top of the potential list of growers of biocrops. And even better than high-input crops like miscanthus, there is jatropha, which can be profitably grown in arid zones in this country; its fruit yields a biofuel. A technologist from Associated Cement Companies told me at the Delhi Summit that the company was already experimenting with this crop, which would yield multiple benefits. Reliance too is considering large-scale jatropha farming, according to some news reports, and experimental plots are already underway.

In the time-honoured fashion of indefatigable champions of causes, Khosla asked a seemingly heretical question, at the end of his address. What would happen if around a third of the current world population - 2 billion people - ran cars with ethanol? Would that be catastrophic for agriculture and food security? Not necessarily. At an average output of 15 tons of biomass per acre, 1 billion acres would produce enough energy to replace all the world's oil. The US by itself has an area twice as large, and, with increasing productivity (and presumably the use of genetically modified crops), the yield could increase, requiring less acreage.

manoj

It is admirable that debates are veering toward the use of bio-fuels. But why doesnt anyone in India talk of pongamia pinnata, the tree native to India, found all over and easy to grow, that can be a viable source of bio fuel instead of Jatropha? Jatropha has been tried in places abroad and has been found to be effective. But Pongamia has the advantage of being local, needing next to no care or water when growing, its cake is an excellent manure, lasts and yields for 80 years once mature ... I wish those interested in promoting bio fuels in India would look at the potential of Pongamia and other indigneous plants instead.

Pioneering work in this field,working specifically with pongamia, has been done by Prof.U Shreenivasa of Sutra technologies, bangalore, IISc. They've managed to power an entire tribal hamlet in AP using pongamia, among their other achievements with pongamia.

junaid

Dear friends,

Jatropha is a native plant species in many parts of India. It's used for biofencing of the farm yards. If it's grown as a monoculture crop we will have to confront with decline in biodiversity. It's well known that domination of any plant specie will lead to the extinction of many species which happened in the case of Eucalyptus in South India. Reliance should not take the trouble of Jatropha cultivation in large scale monoculture; instead it should apply some wisdom to encourage the communities to cultivate jatropha in polyculture methods. If all the gardeners are to stop fencing their gardens with sliced stone and shift to biofencing with jatropha, we can save lot of hillls and can produce some oil for the country....

manoj

We are building castles in the air. Jatropha may be the best TBO substitute for petro-diesel; its feasibility as feedstock depends on economics-yield of seed per hectare. So far jatropha has been used as a live fence or found growing on wastelands [because it is unpalatable to our cattle!!]; the only attempt on plantation scale was made over ten thousand hectares in the nineties in Nasik district of maharastra under the leadership of Vinayakrao Patel and latter abandoned for lack of market.

But according to Patel the average yield of seed was one and half tonnes per hectatre only!!! This was the performance on good farm-land and under good management by progressive farmers; we cannot expect even these yields under the deadly combination of marginal lands managed by poor farmers/landless and seed of unknown origin obtained by sweeping the floor under existing plants on wastelands.

The planning commission report mentioned a figure of yield of 5 to 12 metric tonnes and did not give any basis for this estimate; TERI in its voluminous report prepared for the Ministry of Rural Development repeated the same planning commission's figure and in the sensitivity analysis said that at five metric tonnes yield the market price of jatrodiesel would be Rs 16.65 per litre at 2500 plants per hectare after deducting the income from byproducts namely glycerol and de-oiled cake. As any forester with experience of tackling wasteland afforestation can vouchsafe, yields will be much lower from these lands compared to the Nasik experiment.

We are putting the cart before the horse; when one wants to take up largescale, nay, massive mindboggling extent of plantations, wisdom lies in focusing on 5 to 10 hectare plantations in different agroclimatic zones, selection of highyielding clones, biotechnology to improve yields, standardisation of cultivation practices. All this is lacking in the biofuel mission, although these are being done in the Daimler-benz, Teri-BP project and a few other private sector initiatives. Govt wil do well to hold its programme till more data is avaiable on performance of jatropha.

shubha

I am not an expert on the subject, but find the estimate on the biofuel productivity rather questionable.

According to estimates at http://home.alltel.net/bsundquist1/gcia.html , we are already using close 90% of the available Net Primary Productivity (NPP). Also, current total global energy usage is about 4 times the NPP. I don't see how that can be reconciled with using only about 2 billion acres of 32 billion acres to produce all that energy.

Also, biofuels are not zero net carbon as many would have us believe. Currently, most of it is grown on cleared forests and grasslands, releasing the stored carbon in the area.

anshuman

The spacing of Jatropha plants planted by the so-called private parties is far from being adequate. Even in Mr.Patel's Nask jatropha plantation, the spacing between plants was more than 8 feet. I am surprised to see these private plantation Cos. are advocating a spacing lesser than 6 feet [2mtrs].

This is very dangerous because at end of the 2nd year of plantation the plants will overlap each other, and this will not permit sunlight and air to penentrate to the lower parts of the plant, which then will lead to lower yield. A point to be noted, is that in all the native plantation of jatropha planted as bio fence, even though closely planted there was enough sunlight and air circulation to maintain the plants' yield.