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A burst of energy

When oil prices suddenly shot up in 2004, it did not take long for the world to realise that the era of cheap oil had ended, writes Prem Shankar Jha.
Hindustan Times | By Prem Shankar Jha
UPDATED ON JUL 04, 2007 12:17 AM IST

When oil prices suddenly shot up in 2004 from the earlier $ 20 a barrel to $ 50 and then $ 65, it did not take long for the world to realise that the era of cheap oil had ended, that global oil production would peak at the latest by the middle of the next decade while demand continued to rise, and that 80 per cent of the oil in the earth’s crust would be exhausted by 2040. It could no longer, therefore, postpone the shift to other energy sources. What makes the impending shift far more difficult than the two that have preceded it — from wind and water power to coal, and from coal to oil — is that there is no single cleaner and more concentrated energy source to shift to. The world is, therefore, rife with experiments and each country is looking for solutions that best suit its natural endowment and needs.

India is no exception. With large, still untapped, reserves of coal, our planners know that the immediate need is for alternative transport fuels. But to meet it, they are on the verge of adopting a strategy that will not only never make India self-sufficient in transport fuels, but miss a once-in-an-epoch opportunity to build an energy economy that will, at the same time, solve most of the social, economic and environmental problems that have increasingly bedevilled our developmental effort.

The goal that the government has adopted is to meet 25 per cent of India’s energy needs from renewables by 2030. To do this, it intends, in the transport fuels sector, to blend gasoline with 5 per cent of ethanol and to replace a large part of high speed diesel with bio-diesel. The gasoline target is already within reach. The 400 million litres of ethanol needed to meet it is less than a third of the capacity of the 122 ethanol plants that have so far been set up. Oil companies have so far been reluctant to switch from MTBE (Methyl Tetra Butyl Ether) to ethanol as an octane booster because they are not sure that its supply will be uninterrupted. But the continuing rise in oil prices is dissolving their inhibitions.

But it is the prospect of producing bio-diesel, from a plant called Jatropha, that has galvanised the government. The technical and economic feasibility of the new fuel has been established and the government has committed itself to planting 30 million hectares of waste-land with Jatropha to produce 60 million tonnes of bio-diesel a year in 2030.

This strategy has already begun to attract the interest of private investors, for there are millions of hectares of land to be brought under cultivation, technologies to be developed and proven and plants to be built. Once they make a financial commitment, the opportunity to revise the policy will disappear. And revised it must be, for it suffers from two drawbacks. First, even if successful, it cannot conceivably meet more than a small part of our needs. By 2030, the demand for diesel will have risen from 40 to about 130 million tonnes and for gasoline from 8.65 to about 35 million tonnes. Ethanol will meet only 1.75 million tonnes of the need. India will, therefore, still need to import an additional 55 million tonnes of transport fuels.

Second, since ethanol can only be mass produced at present from food crops, even the six-fold increase in production that the government’s modest programme envisages will require the diversion of a large portion of land that is currently feeding people to feeding machines. If sugarcane remains the main source, more than 10 million hectares may need to be diverted. Other crops like maize, sugar beet and sorghum could need more.

The truth is that Brazil can base its transport economy on ethanol because it can bring millions of acres of virgin land under sugarcane. Making ethanol from food crops could prove a boon to the EU and the US since it would enable them to reduce their massive subsidies to farmers. But in India, even our tepid programme could prove a human disaster.

The huge power of the farm lobby in the West, and our dependence on it for ideas and technology, may be the reason for the resounding silence that surrounds that other clean transport fuel, methanol. While the technology for producing ethanol from non-food plant cellulose (e.g. wood, leaves, bagasse or straw) has still to be developed and proved economically viable, the technology for producing methanol from wood is more than two centuries old. In recent decades, it has been adapted in pilot and semi-commercial plants to use a wide variety of biomass fuels at extraordinarily high levels of efficiency. These have brought down the cost of producing methanol to well below the cost of an equivalent quantity of gasoline.

India produces approximately 200 million tonnes of bagasse and an equal amount of paddy straw and rice husk (equivalent in energy terms to about 150 million tonnes of bagasse) every year. These agricultural and industrial wastes are capable of producing 750 to 800 million tonnes of a fuel that has so far only been used in racing cars. In energy terms, this is equivalent to about 500 million tonnes of gasoline and slightly less of diesel. That is about three times the projected transport fuel needs of the country in 2030.

However, it would be short-sighted to view a switch to methanol only through the prism of our energy needs. If agricultural residues and wastes acquire a market value, every farmer in the country will become better off. If cotton farmers could sell their stalks in addition to their cotton, it would provide an additional, stable income of several thousands of rupees a hectare.

But these would be only the initial benefits. In the last 60 years, we have denuded or severely degraded half of the 76 m Ha of forest we inherited at Independence. Of this 12.6 m. Ha has been totally denuded and another 25 million Ha. has lost more than 60 per cent of its forest cover. Since the cleanest and best feedstock for the production of methanol is wood, an energy shift to methanol, as against ethanol or bio-diesel, would provide just the added incentive that farmers and forest departments need to embark upon serious reforestation programmes. These would not only provide work and a source of income to millions of people in the so-called forest villages (who are among the poorest in the country), but reverse the cycle of environmental degradation in which the country is trapped.

Finally, the combustion of methanol would add no more carbon dioxide to the atmosphere, no matter how much consumption were to increase, because it only would be releasing back the carbon dioxide that the plants had trapped. This is again in sharp contrast to ethanol produced from food crops, whose cultivation does generate additional carbon dioxide.

Often the strongest argument against doing something is that others are doing something different. But this is not applicable to the search for new sources of energy. Other countries are exploring other paths because they face a different set of constraints. The West, for instance, is placing its short-term bets on ethanol because it has a surplus of productive capacity in agriculture. It is placing its long-term bets on hydrogen fuel cells because it knows that it cannot grow enough biomass to meet the whole of its transport fuel needs when the oil runs out. We, however, will not get to that point for several decades. We also face the challenges of rural poverty and environmental degradation that they have largely overcome. We need to find our own path.

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