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Monday, Nov. 2, 2009 | It started with the corn-ethanol boom in 2004. Plants — whether algae or dinner table staples — were billed as the cure for our addiction to fossil fuels.
But high hopes and initial enthusiasm gradually gave way to a sobering reality: that finding a viable replacement for oil in the modern economy is an extremely difficult proposition. To get a sense of just how difficult, consider the saga of jatropha curcas.
The poisonous, oil-yielding weed was all the rage among biofuel enthusiasts in 2007, when a Goldman Sachs report claimed jatropha biodiesel would cost just $43 a barrel to produce. But domesticating jatropha has proven difficult.
Yet even with all this uncertainty, two San Diego County companies are betting on jatropha being a big part of the biofuel mix. Encinitas-based S.G. Biofuels, and La Jolla’s Synthetic Genomics, are plowing ahead with their efforts to make the wild weed viable for cultivation.
The two companies are among about three dozen working on biofuels in San Diego, which has become a hub for the nascent industry. And though most of the firms are small operations or start-ups, they and their plants are being looked at as a future driver of the local economy.
“[Jatropha] is profitable today with an undomesticated crop,” says Kirk Haney, president and CEO of SG Biofuels. “It has two times the oil yield of rapeseed and four times the oil yield of soy … and with that the potential to improve it.”
Originally from South America, jatropha is a small, drought-tolerant tree that bears plum-sized fruit; it grows rapidly and remains productive for three decades or more. Some farmers in India, where Portuguese sailors later introduced the plant, used it for lamp fuel or soap.
Jatropha’s large, poisonous seeds are 30 to 40 percent oil, far more than most other plants, and the oil can be used to produce biodiesel in much the same way as oil from soy. But unlike many biofuel sources the tough little tree grows in rocky soils or wasteland where food crops wouldn’t survive.
Impressed by its potential, countries like India and Brazil rushed to plant jatropha during the last few years. In the United States, entrepreneurs have tried growing jatropha in Florida and in Southern California. The results have been mixed and often disappointing.
Part of the problem is that just like most algae strains, jatropha is a wild plant, says Steve Briggs, a professor of cell biology at University of California, San Diego. “The thing that’s holding both of these crops back is that they’re undomesticated,” Briggs says. “The key is to improve them to the point where they can sustain commercial operations.”
Briggs, who is a scientific advisor to both SG Biofuels and Sapphire Energy, a San Diego-based algae biofuel company, believes that jatropha and algae are both very promising but for different reasons. Jatropha is easier to develop and will probably reach the market first, he predicts, although in the long run algae might have a greater payoff.
“New technology has to be invented to improve algae, but existing technology can be used to improve jatropha,” Briggs says. He sees algae as a more high-stakes investment with greater challenges to overcome and greater possible rewards. “With algae you have ten times the risk but you have ten times the market potential.”
Ultimately, however, Briggs believes the post-petroleum market will be complicated and that no single crop will dominate — meaning that jatropha, algae and other biofuels like cellulosic ethanol will carve out different sectors. “It’ll be very diverse … You’ve always had multiple fuel sources and I think that will continue, because it’s expensive to move fuels long distances.”
As biofuels supplant crude oil, different regions will come to rely on different biofuel crops, predicts John Gartner, a senior analyst at Pike Research, a clean tech market research firm. While cellulosic ethanol might have an advantage in the Midwest, for example, jatropha would do better in warmer climates since it can’t tolerate cold temperatures, he said.
To capture a chunk of that fractured market, SG Biofuels has spent the last three years collecting a library of different jatropha strains. Now they’re working to improve jatropha, maximizing yield and drought tolerance through plant breeding and genetic engineering.
“We realized that the basic work had not been done [with jatropha],” Haney says. Jatropha might have significant natural advantages, but it still needed a little tinkering to realize its full potential — and San Diego, Haney says, seemed an ideal place. “Here in San Diego we have some of the best molecular geneticists in the world.”
Haney compares the process of improving jatropha to the way corn and tomatoes were bred over thousands of years to become high-yielding crops. “The tomato that we eat was originally the size of a marble, and we all know how big it is today.”
But with the modern marvels of biotechnology, that thousands-of-years process can be whittled down to less than two years. SG Biofuels hopes to have its domesticated jatropha on the market in another 12 to 18 months.
Synthetic Genomics, co-founded by J. Craig Venter, the legendary genomics pioneer, is best known for its recent collaboration with ExxonMobil to develop algae-based biofuel. But the company has big plans for jatropha as well.
In May of this year, Synthetic Genomics announced they had sequenced the jatropha genome in collaboration with the Asiatic Centre for Genome Technology in Malaysia. Scientists at the two companies are working in partnership to improve jatropha through biotechnology techniques like marker-assisted selection.
Industry analysts are bullish about the long-term outlook for the biofuels sector. But it has had a rough road in recent years after the corn ethanol boom went bust after many came to believe that corn ethanol’s negative environmental impacts outweighed its positive ones. And the crash of the economy last year has had a disproportionate impact on investment in sectors like biofuels that are considered risky.
“[Biofuel] will rebound but not as quickly as the rest of the economy,” Gartner, the clean tech analyst, predicts. “It will be much more difficult in the short term to get investors excited.”
Government spending could provide a boost, especially given the Obama administration’s push to direct federal stimulus money toward clean tech industries. Dallas Kachan, a managing director with the San Francisco-based Cleantech Group, said the flood of federal cash helped compensate for the steep drop in venture capital spending — although it didn’t come without its drawbacks.
“There’s a lot of celebration over the stimulus … although some venture capital firms are critical of this stimulus fund,” Kachan says. “For some venture caps, [the stimulus] is picking winners and losers, it’s obscuring market signals, so it’s a very confusing time right now for the industry.” Stimulus spending on clean tech in China this year was even greater than in the United States, Kachan says.
All of this complexity is perhaps why some of the most promising contenders seem so unusual: plants like pond scum and poisonous trees that could help quench our thirst for fuel.
Jonathan Parkinson is a San Diego-based freelance writer. Please contact him directly at firstname.lastname@example.org with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.