Sunday, September 14, 2008


The energy needs generally, are met through hydroelectric, coal and fossil fuel based thermal and nuclear plants. To a limited extent wind power is also contributing its might to augment energy supply. While coal based power projects are facing increasing hostility from people because of their enormous pollution risks, fossil fuels are sourced externally in countries like India to a large extent with limited domestic production. With automobile sector growing at a frenetic pace, demand for fossil fuels is increasing sharply entailing unbearable outflow of foreign exchange and increased domestic prices for fuels, adversely affecting all walks of the economy. Recent sharp spurt in prices of crude oil in the global market is attributed to increasing demands from China and India, two Asian giants on the threshold of breaking into the exclusive club of developed countries. But such ambitions may still be derailed if the energy crunch is not
handled with vision and fortitude.

Extending the fuel supply is a major agenda on the menu of all countries and ethyl alcohol is the prime candidate for making fuel blends with lesser amount of fossil fuels. The shining example of Brazil in producing alcohol on a massive scale from sugar cane which is grown abundantly for blending with gasoline, serves as a model for others. USA uses 20% of its corn production for converting into ethanol and blending with gasoline and by law the country has set a long term goal to use 36 billion gallons of ethanol for fuel blends by 2022 from 3.5 billion gallons in 2004. The logistics of such huge production may pose large scale conflicts in a world where more than 20% of the population is estimated to be suffering from hunger. The US Arboretum in Washington D.C cites crops like corn, sorghum, soybean, mustard, sugar beet, sugarcane all presently used for human consumption as future fuel sources for their automobile industry!

The reported approval by the Government of India (GOI) of a Bio-fuel Policy raises some concern as to its potential for creating strain on the food supply in future. According to this policy, by October this year it will be mandatory for the petroleum companies to mix 5% bio-fuels with petrol and diesel and increase this to 20% within 9 years. The National Bio-fuel Policy being implemented and to be monitored by the Bio-fuel Coordination Committee headed by Prime Minister himself is supposed to be laying stress on non-edible agricultural crops like Jatropa and Pongamia using community, government and marginal/degraded/ waste lands for cultivating these crops. How far this is feasible remains to be seen though GOI wants to introduce Minimum Support Price concept for buying bio-ethanol by the fuel distribution companies in order to boost the production for meeting the demand. The supporting policy to be put in place also will allow free movement of bio-ethanol through out the country unhindered across all the states while they are exempted from all taxes. How far this will be diverted by the unorganized liquor industry for conversion to spirits is a worrying factor.

What has not caught the attention of GOI is the enormous potential for converting ligno cellulosic materials, the waste streams in the agricultural operations, into alcohol for which ready technology is available. The 300 million gallon bio-ethanol plant being commissioned in Kakinada, AP, India, by Universal Biofuels using latest technology with much lesser energy and water requirement, is a right model for India and must be replicated several fold to meet the demand from the petroleum industry for bio-ethanol in the coming years. Such ethanol blended petrol (gasohol) is more environment friendly emitting less green house gas CO2 than the normal petrol while it can save valuable food crops for human consumption.


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