Does Energy Grow On Trees?: Jatropha Plant to Address India’s Fuel Needs

Today the WSJ reports that jatropha (pictured), a plant found throughout India, represents a major potential source of energy. The “ugly” shrub’s potential centers on the oil contained in its “golf-ball-size” fruit, which can be refined into biodiesel. Horticulturally-derived fuel, particularly from corn and sugarcane, is already an important source of alternative energy for many countries. Within the U.S., farm states like Iowa and Nebraska have experienced significant economic growth due to government incentives for ethanol production and Brazil has been particularly successful at reducing its oil imports by promoting the consumption of ethanol produced from sugarcane.

However, unlike corn and sugarcane, both of which are edible, jatropha has no value as a foodstuff. This means that jatropha used for biodiesel production will not make food more expensive or “divert resources away from crops that could be used to feed people”. The plant, which was formerly considered to be relatively useless beyond its ability to be grown as a hedge, keeping wild animals from entering farms, is also attractive due to its hardiness and ability to grow in difficult environments (“deserts, trash dumps, and rock piles”). It is also requires little water or fertilizer to thrive, both products which may be expensive or hard for poor farmers to come by. Other sources of biodiesel like corn and palm oil, require large amounts of water and land, jatropha is less picky.

The economics of jatropha biodiesel appear to be attracting the attention of some big players in the international energy industry. Some estimates place the per-barrel cost of refining jatropha at $43, half as much that of corn. With oil hovering at $70 per-barrel, this could make large-scale biodiesel production competitive without market-distorting government subsidies. BP recently invested $90 million in a joint venture with another British firm to develop jatropha biodiesel production in India as well as other countries.

Although some worry the flow of money into jatropha could suddenly dry up if the plant doesn’t live up to the hype and horticulturists caution that little is known about the plant due to its only new-found notoriety , some feel that jatropha oil could play a significant role in growing India’s biofuel capacity, something the Wire first profiled here.