Organic Energy Inc.

Whew! It turns out shipping ethanol needs a lot more preparation and creates a lot more hassle than biodiesel! Can you say, hazardous material?

Oil topped US $111 a barrel last week.

Who would have thought this was possible several years ago?

And yet, anyone who looked at the situation closely should have been able to predict that oil prices could only go higher, as increasingly energy-hungry nations Like China start to pull their weight and oil peaked.

It reminds me of the predictions of many experts a long while back before the dotcom explosion, which were almost always positive about the outlook on over-valued internet start-ups that made no money and ate up their investments like crazy.

Or the general opinion of people who thought housing prices would always go up like crazy as demand priced homes to ridiculously astronomical levels.

Or the unbridled optimism and hype in the biodiesel industry, which was hit hard the last year or so as commodity prices for their feedstock have skyrocketed, a precarious situation that many should have realized would happen as the laws of supply and demand worked on agricultural products that were now in demand for both food and energy production.

It’s amazing that we never seem to learn from our past, or maybe it’s just that people tend to be optimistic about the present, which is perhaps a little bit less foolish.

One of the most hyped biofuels crop is undoubtedly Jatropha curcas, a small tree that has attracted the attention of governments and entrepreneurs in many tropical and semi-tropical regions. The primary attractions of the plant are its alleged ability to survive in marginal land and its reputation as a hardy weedy species, traits which enable proponents to popularize it as a viable alternative to using food crops and crops grown on previous rainforest for biodiesel.

In the Philippines, the government has waded into the Jatropha waters and formally encouraged the cultivation of this plant, a stance which has resulted in a near frenzy among businesses and farms wanting to capitalize on this news. Lost among all the hoopla is the fact that there are very real dangers involved in throwing investment money and time into these ventures without a clear idea about the risks inherent in cultivating Jatropha for biodiesel.

1. The ultimate yield and optimal cultivation techniques for Jatropha curcas are still relatively not well known, and are still being extensively researched. Profit calculations from would-be entrepreneurs frequently use the most optimistic projections, which are most likely incorrect.
2. J. curcas can survive in marginal land, but this does not mean that its yield in these lands can create profits. Large inputs of fertilizer, water, and other resources may be needed in order to achieve higher yields, which may make profitability hard to achieve.
3. Jatropha curcas is poisonous, with the seeds having the greatest concentrations of the toxin curcin. This means that the resulting seed cake is also highly toxic and inedible. This is in contrast to many other non-poisonous plant types that may be displaced by Jatropha cultivation.
4. Harvesting of Jatropha curcas is extremely labor intensive, especially given the fact that both ripe and unripe fruits can coexist in the same tree at the same time. This is often forgotten when nice colorful presentations are handed out to unsuspecting investors. Labor costs could push up the overall costs to daunting levels, further eroding any hope of profitability.
5. Jatropha curcas oil can easily absorb water and can degrade quickly if not handled correctly. The seeds of Jatropha also are unstable rather quickly, and Jatropha derived biodiesel seems to have low oxidative stability.

The question of whether Jatropha curcas is a worthwhile feedstock for biodiesel is still very much up in the air, no matter the frenzy surrounding the plant nowadays nor the enthusiasm of national governments. It is up to the discriminating investor to avoid getting lost in the translation.

I came upon a site that declared rather grandly that biodiesel and ethanol were first generation biofuels, and that biobutanol and isbutanol were second generation biofuels. Does this mean that both biodiesel and bioethanol are on their way out before they have even crashed the dinofuel monopoly? (and yes, I am being sarcastic here).

It got even worse, with some pundits proclaiming:

“First generation” biofuels such as bio-ethanol and bio-diesel have their limitations. These biofuels do not fit neatly into the existing fuel infrastructure and there are some concerns over their sustainability and longer term environmental impact. However, they are a good start and pave the way for “second generation” biofuels, such as butanol, which is a better fuel offering greater sustainability and environmental benefits. We believe that (butanol) will supersede “first generation” biofuels within five to ten years as a fuel extender and it ultimately has the potential to completely replace fossil fuels for road and air transport.”

Well, it’s too late in the night for me to expand on this right now, but suffice it to say that I find all this a little hard to believe.

Visitors to the business website may have noticed some initial information about cellulosic ethanol and wondered what happened to the focus on biodiesel. Well, to make a long story short, we got some feelers from a potential client earlier this month who was actively looking for other kinds of biofuels besides biodiesel, and it suddenly dawned on us that there really is no particular reason to limit our focus on just one aspect of the biofuels and bioenergy industry.

I admit it. I personally like the entire range of biofuels, so long as it has to do with biological systems and plants. It’s the plant molecular biologist and attinologist in me, it jives with all my other interests that have to do with Mother Nature. I could care less whether we’re into biodiesel or biobutanol, or bioethanol, so long as I get to work with products from plants.

So if you or your organization is also into these biofuels, why not give us a shout? Perhaps there is some future opportunities for partnership between us

We are a young company, and most of our activities take place in the so-called Pacific Rim, but we are starting to have more and more contacts and dealings with American manufacturers of biodiesel, mostly due to demand for biodiesel from clients abroad.

One interesting phenomenon that we’ve encountered in the USA is a reluctance by a few manufacturers to allow us to export their biodiesel far away from their locality. This does not happen very often (only twice in fact), but at first glance this may be surprising to people who are not that familiar with the biodiesel industry, given that the natural assumption is that a business will try to maximize its revenues and profits so long as nothing illegal is being done.

The explanation for this is that in some ways, the biodiesel “movement” has similarities to the open source movement in information technology (Linux, OpenOffice, FireFox, etc) in that people are reacting negatively to an established industry by building healthy and viable community-based businesses or organizations. In such a setting, profits sometimes may take a back seat to higher principles, something which is obviously not a bad thing per se.

In one case, one goal is sustainability, which in the biodiesel industry has a higher and stricter definition. As attendees to the Sustainable Biodiesel Summit in San Antonio noted: Sustainable biodiesel is produced and distributed regionally, sourced from locally harvested crops, and from unique attributes that develop based on the particularities of the region. It is in balance with the local energy systems. A relationship develops between the consumers and distributors, the producer and farmer, and ultimately throughout the community. It is about “reverence of interconnections.”

The notion that biodiesel must be distributed only regionally does however complicate our jobs, because we are geared to function in a global economy, one that seeks to optimize supply and demand for the greater good. In our eyes, it is truly a borderless world in many ways. For example, if one man in a small crowded room smokes, then the problem created is one for all people in that room, and not just for that one person. In the same way, the problems addressed by the use of biodiesel and other renewable biofuels (problems such as pollution, the peaking of dinofuels, global warming, etc) are in our eyes global problems, and ones that do not on the whole make a distinction between localities. To us it is worthwhile and notable that countries which do not have enough biofuel feedstock are nonetheless still very interested in utilizing biofuels for their benefits over petroleum diesel, even at the extra costs of importing them.

One of our primary goals is To support local community efforts to produce renewable biofuels….thus promoting the creation of decentralized networks of towns and villages who are not only energy self-sufficient, but who may be able to derive additional revenue streams to aid in their development.

Does it matter if those additional revenue streams result in the transport of the product to far away lands and places, so long as they benefit everyone and help our planet continue its move towards renewable energy sources?

I decided on the title after reading a book called Organic Inc., which detailed the rise of businesses built on selling “Organic Food”.

It’s pretty obvious that food from the big agribusinesses are just as “organic” as the food these smaller businesses sell (in the sense that all the food are basically composed of long carbon chains and the occassional extra elements), but the “organic” in their name actually refers to something else. It refers to a way of growing the food that promises to the consumer a healthier, more natural, earth-friendly, and more sustainable product.

In the same way, the new renewable biofuels like biodiesel, ethanol, and biobutanol pretty much have the same functionality as fuel sold by Exxon-Mobile, Shell, and all the other Big Oil corporations, but they distinguish themselves as being more “earth-friendly”, more sustainable (if handled correctly), and generally a healthier and better option for everyone.

Unfortunately, Organic Energy is similar to Organic Food in another, more negative way: Both tend to cost significantly more for the consumer than their competitors, which means that both have to try to convince consumers that they have additional value in them that justifies the higher price.

Organic foods tend to have an easier sell, since they directly address something that is very highly valued by many consumers - their own personal health. Organic Energy on the other hand has to push forward the notion that the consumer should be concerned for the welfare of many other people, perhaps even the entire planet, a proposition that is generally harder to sell.

This blog will focus on these organic energies, such as biodiesel, ethanol, and biobutanol. I hope you’ll join and learn along with me.