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OECD warns against biofuels subsidies

Andrew Bounds, Financial Times
Governments need to scrap subsidies for biofuels, as the current rush to support alternative energy sources will lead to surging food prices and the potential destruction of natural habitats, the Organisation for Economic Co-operation and Development will warn on Tuesday.

The OECD will say in a report to be discussed by ministers on Tuesday that politicians are rigging the market in favour of an untried technology that will have only limited impact on climate change.

“The current push to expand the use of biofuels is creating unsustainable tensions that will disrupt markets without generating significant environmental benefits,” say the authors of the study, a copy of which has been obtained by the Financial Times.

The survey says biofuels would cut energy-related emissions by 3 per cent at most. This benefit would come at a huge cost, which would swiftly make them unpopular among taxpayers.
(10 September 2007)
Recommended by economist Jason Scorse at Gristmill.

Mali’s Farmers Discover a Weed’s Potential Power

Lydia Polgreen, New York Times
KOULIKORO, Mali – When Suleiman Diarra Banani’s brother said that the poisonous black seeds dropping from the seemingly worthless weed that had grown around his family farm for decades could be used to run a generator, or even a car, Mr. Banani did not believe him. When he suggested that they intersperse the plant, until now used as a natural fence between rows of their regular crops – edible millet, peanuts, corn and beans – he thought his older brother, Dadjo, was crazy.

“I thought it was a plant for old ladies to make soap,” he said.

But now that a plant called jatropha is being hailed by scientists and policy makers as a potentially ideal source of biofuel, a plant that can grow in marginal soil or beside food crops, that does not require a lot of fertilizer and yields many times as much biofuel per acre planted as corn and many other potential biofuels. By planting a row of jatropha for every seven rows of regular crops, Mr. Banani could double his income on the field in the first year and lose none of his usual yield from his field.

Poor farmers living on a wide band of land on both sides of the equator are planting it on millions of acres, hoping to turn their rockiest, most unproductive fields into a biofuel boom. They are spurred on by big oil companies like BP and the British biofuel giant D1 Oils, which are investing millions of dollars in jatropha cultivation.

Countries like India, China, the Philippines and Malaysia are starting huge plantations, betting that jatropha will help them to become more energy independent and even export biofuel. It is too soon to say whether jatropha will be viable as a commercial biofuel, scientists say, and farmers in India are already expressing frustration that after being encouraged to plant huge swaths of the bush they have found no buyers for the seeds.

But here in Mali, one of the poorest nations on earth, a number of small-scale projects aimed at solving local problems – the lack of electricity and rural poverty – are blossoming across the country to use the existing supply of jatropha to fuel specially modified generators in villages far off the electrical grid.
(9 September 2007)

Cultivating a Crop of Hope

David A. Fahrenthold, Washington Post
Long, Tall Switchgrass Has Promise Uprooting Corn as a Main Source Of Ethanol and as a Boon For Ex-Tobacco Farmers

When it grows high and thick in midsummer, the crop that might fill Virginia’s gas tanks, revitalize its farm belt and keep its mud and manure out of the Chesapeake Bay looks like . . . weeds. Like the world’s most overgrown lawn.

At a Virginia Tech agricultural research center here, in this small town west of Fredericksburg, the switchgrass plot is an unruly, waving thicket of seven-foot-tall green stalks. But it only looks neglected: This is one of the center’s most prized plants, a formerly obscure prairie grass now projected to be a major source of farm-grown fuel.

…Researchers across the country think that switchgrass could help supplant corn as a source for the fast-growing ethanol industry. In Virginia, some officials are trying to make the state the Iowa of the new cash crop. They’re urging farmers to grow it and envision dozens of refineries that will turn the stalks into fuel.

…But such efforts have hit a snag: Scientists haven’t perfected the process that turns switchgrass into ethanol. So for today, the Crop That Could Change Virginia is just hay with better publicity.
(6 September 2007)

Brazil: Ethanol Divides Agribusiness

Mario Osava, IPS/IFEJ
The expansion of sugarcane farming to produce more ethanol in Brazil has run into unexpected resistance in Rio Verde, a prosperous town in the central state of Goiás, and it is coming from agribusiness leaders.

The local government, of the conservative Progressive Party, decided to impose a limit on sugarcane to 10 percent of the municipality’s farmland. That represents 50,000 hectares, eight times the area already planted with sugarcane in Rio Verde, to supply an old distillery that produced fuel alcohol, or ethanol.

The measure, demanded by agribusiness leaders, was proposed by Mayor Paulo Roberto Cunha and approved unanimously by the municipal Council.

Sugarcane monoculture is “a green tsunami that is breaking the agribusiness productive chain” and causes “social tragedies” as well as environment problems if it is not controlled, Avelar Macedo, secretary of industry and commerce, and promoter of the restrictions, said in an interview.

…The union of local officials and business leaders defends the “diversified activities” that they say led to an average 30-percent economic growth in the municipality since 2001, according to the Commerce and Industry Association.

…[Rio Verde] is a city of 136,000 people without obvious poverty — nobody asking for money on the streets — and many signs of prosperity, such as brisk commercial and banking activity on the main avenue. There are four university institutions, which draw students from nearby towns.

This agro-industrial chain, “which adds value locally,” is threatened by the “euphoria for ethanol,” said Macedo. The sugarcane industry does not benefit the population because it mainly offers temporary, low-paid work, and generally purchases its machinery and inputs from foreign suppliers, he explained.
(8 September 2007)