GreenGold shows the jatropha way

A little-known company GreenGold Ray Energies, Inc. (Other OTC:GRYE) issued a press release yesterday that its biodiesel refinery in Nasipit, Agusan del Norte should be opening within 90 days. The GRYE Processing and Refinery Plant which is capable of producing 680 million liters (180 million gallons) of biodiesel a year is designed to use jatropha oil as its feedstock.

To support its plant, GreenGold has been acquiring lands and growing jatropha plants in plantations in Mindanao and Marinduque and has forged supply agreements with local jatropha planters. It has also established a research and development center for jatropha in Cagayan de Oro City.

A model of GreenGold's biodiesel refinery

The investment is seen as a response to Republic Act 9367 or the Biofuels Act of 2006, which requires the use of biofuel blends of up to 10% on vehicle engines within four years. The Philippines is projected to need 150 million liters of biodiesel a year for the next few years to meet the Biofuels Act mandate.

While there are several biofuel plants in various stages of development in the country, the only other large-scale biofuel plant in operation is that of Chemrez Technologies Inc. (PSE: COAT) which uses coconut oil as feedstock. It has a capacity of only a third of GreenGold’s refinery.

Jatropha (Jatropha curcas) has been touted as a viable biodiesel plant since it grows almost anywhere, even on marginal lands. Proponents have endorsed it since the oil is inedible, and should be exempt from the food for fuel controversy.

However, agronomists from the UP Los Baños have shown a few years back that jatropha that grows on marginal lands cannot yield commercially-viable biodiesel, and the only way to increase the yield is to grow it as if it were like any other agricultural crop: fertile land, irrigation and use of fertilizers.

The government, through the PNOC Alternative Fuels Corporation has an ongoing jatropha initiative although it has not yet entered into the commercial phase.

Jatropha as biodiesel

Among the advantages of jatropha crude oil over fossil diesel cited by GreenGold engineers are: (1) it is biodegradable; (2) has higher flash point than petrodiesel ; (3) emits less carbon dioxide;  and (4) can be used alone or mixed with other fuels for vehicle use.

The disadvantages cited are: (1) it is more expensive than petrodiesel; (2) less suitable in cold weather because it may form a gel; and (3) tends to reduce fuel economy on vehicles running using pure biodiesel.

The potential of jatropha as a viable fule was recently demonstrated when Air New Zealand used a 50/50 mix of jatropha oil and jet fuel is a successful test flight. Last month, Houston-based Continental Airlines tested jatropha fuel on one of its jetliners.

If anything, GreenGold is trying to show that the jatropha plant can be made viable as a source biodiesel if grown scientifically and provided with proper requirements just like any other agricultural crop—and not just letting it grow on marginal lands as the government planners originally proposed.

DOE proposes to raise the biodiesel blend to 3%

Over the weekend, Department of Energy (DOE) director Mario Marasigan announced that his agency may propose to increase the minimum required biodiesel blend to 3% by February 2009 to spur investors to pour in more money to the sector.

 He revealed that there are now 13 accredited biodiesel manufacturers capable of producing up to 326 million liters which is more than what the 2% blend requires.

 “The DOE is studying that with this capacity in place, is it appropriate, rather than two percent mandated blend on February 2009, why don’t we increase it to three percent?,” he said.

 Why not? If the blend is indeed that friendly to the environment and it can compete with the usual diesel, why not make it to 5%. Studies suggest that a blend of 6 to 10% works very well with light cars and vehicles, and other countries are mulling to use up to 20% blend (B20) for large buses. In fact many countries start with a mandated 5% blend (B5) and gradually increasing it to B20. A 2% blend is just too dilute to effectively feel a difference in performance, and its avowed benefit may be hardly felt.

But what we, users, must guard against is substandard fuel introduced into the market by unscrupulous individuals or firms out to make a quick buck. True, the DOE has released its adopted biodiesel standards which is, on paper, quite stringent and appears to have been patterned after the European standards. What is uncertain though is whether the DOE has the know-how or the capability to scientifically monitor the blend already on the market.

We mean the technical capability to verify whether these biodiesel blends passed the technical requirements such as fatty acid content, cetane rating, sulfur limits, heavy metals content and the like. Corollary to this is the question whether there are laboratories which can independently check the quality.

These are not routine inquiries, for what is at stake is the integrity of one’s vehicles, not mentioning the projected impact to the environment.

 There is also a need for more public discussions on the DOE standards. The consumers need to be clarified whether the standards apply to the diluted blend or to the pure biodiesel (B100) which is the starting material for blending.

 As far as I could tell, we are the first and possibly only country to have specified a coco-methyl ester (CME) standard rather than the usual fatty acid methyl ester (FAME) or fatty acid alkyl ester (FAAE) standards. Its formulation smacks of political undertones or lobbying from CME manufacturers in attempts to exclude other biodiesel sources.

 There is nothing wrong with protecting our own native coconut industry. The Malaysians have done it with their palm oil and the Americans with their soya oil. What is objectionable though is a protectionist policy that stretches beyond the boundaries of technology to favor certain interests to the ultimate detriment to the consumers whose choice becomes limited.

 This outlook apparently crept into the formulation of the cetane rating in which the DOE standard pegs it at 55. The cetane rating measures the relative amounts of easily burnt component in a fuel; in this case the molecular weights of fatty esters. The higher the cetane rating, the better the fuel.

 Scientifically, though, the standard vehicle engines work very well with cetane ratings for 46 to 55. This is the reason why the U.S. ASTM standards pegs the cetane rating to only 47—which the soya oil, a major U.S. crop product for biodiesel,  passes easily—while some European countries put the minimum at 51. Incidentally, DOE claims that CME has a higher cetane rating than soya or palm oil.

 The danger is, such exclusive provisions can be twisted to suit one’s selfish interests and mislead the public. For example, a leading CME manufacturer listed at the Philippine Stock Exchange made it appear that only biodiesel conforming to the CME standards are allowed in the market citing the DOE's revised circular that “only CME conforming to PNS/DOE QS 002:2007 shall be manufactured, sold, offered for sale, dispensed or introduced into commerce as biodiesel in the Philippines.” Apparently the manufacturer’s announcement was in reaction to reports that some firms are importing biodiesel which is not CME-based from Korea and other places, and is trying to protect its turf.

 The mandate to use the biodiesel blend in accordance with Republic Act 9367, otherwise known as the Biofuels Act, starts in February 2009. There is still time to conduct public discussions in media to educate the consumers on the pros and cons of biodiesel, and on how they could be protected from unscrupulous dealers.

How to spend P49.1 billion for fuel

By any metric, P49.1 billion pesos is a huge sum of money.

 That is the sum that the government is willing to spend for the Alternative Fuels Program next year, Senator Juan Miguel Zubiri, principal author of the Biofuels Act of 2006, revealed last Tuesday.

The bulk of the allocation goes to biofuels development at P25.6 billion, which is some 21% higher than P21.2 billion budgeted for the purpose this year. Which begs us to ask the following: Has the allocation for this year been exhausted? If so, has the government anything to show for it?

 According to Zubiri, P8.7 billion will go to the Natural Gas vehicle Program for Public Transport; the autogas program, or the conversion of fuel engines to LPG use, P4.4 billion; and the hydrogen development program, P10.4 billion.

 The Alternative Fuels Program is a key component of the Arroyo administration’s Energy Independence Agenda, which aims to make the country 60 percent energy self-sufficient by 2010.

 Why such a big budget for biofuels development, when this activity should rightfully belong to the private sector? Financial incentives for the developers such as income-tax holidays and tax breaks for capital goods importation do cost money, but it would be in the form of reduced taxes for the government, not an upfront cost.

 The only huge expenditure that can be thought of is when the government gives a huge dole-out for its biofuel from jathropa program which is being carried out by the government’s PNOC Alternative Fuels Corporation to buy or lease huge tracts of land, machineries and seeds or seedlings. Even then, jathropa cultivation for biofuels is still highly iffy; and according to some UP Los Baños agriculturists who should know what they are talking about, it will not be cost-effective if grown in peripheral soils as envisioned.

 Not much enthusiasm for large-scale cultivation has evolved throughout the world. There is some development in Brazil, but ironically, India—to which local enthusiasts are looking up to for seeds and technology—is now keenly watching how the Philippine program is progressing.

 As for LPG conversion, the amount may be just right if the plan is to simply replace the thousands of polluting motor cab engines with those using LPG at no cost to the owners and operators. This is a dole out, plain and simple. A complete phase-out of these polluters from major streets and highways to improve our breathing space would only cost a fraction.

 As for the P10.4 billion for hydrogen development program—is the government trying to leapfrog over the countries most active in hydrogen power development like the U.S., Germany and Japan, in commercialization of hydrogen-powered cars? Those who allocated this amount are completely clueless to the scientific and technological barriers needed to be hurdled to make the hydrogen car commercially viable.

 I wouldn’t be surprised if part of the money would be simply spent to buy a fleet of hybrid cars like Toyota Prius for our congressmen and cabinet officials to test-drive and show off.

 If a few millions each would be given as research grants to some science or engineering departments who have alternative energy programs in top universities such as UP. Ateneo, La Salle or Mindanao State University, or even to regional schools like Bicol University or Silliman, the results would likely to be more productive than the current allocation plan.

E10, the latest blend:Let's drink to that!

By J R Ruaya

E10?

This is the newest entry into the dictionary of Filipino motorists who have been groaning under the onslaught of ever escalating prices of gasoline. It stands for the newly introduced vehicle fuel which is 10% ethanol and 90 % gasoline, which is cheaper by about P2 a liter. On top of that, it is supposed to be friendlier to the environment that the usual gasoline, and has been introduced by virtue of the the mandate under the Biofuels Act of 2006.

There are actually tow major types of ethanol-gasoline blends. One, the low-level blend which consist of 5 to 10 % ethanol by volume is designed for existing motor vehicles and it is not much different than the gasoline in terms of function. The other one, the high level blend has ethanol content of 60-85 % ethanol, also referred to as E85 (or E60, as the case may be) is used in special factory produced vehicles called flex-fuel vehicles (FFVs) which can use both the ethanol blend and conventional fuel. Intermediate blends with 20-40% ethanol are mulled, but are not designed for traditional four-wheeled road vehicles.

Why ethanol?

Ethanol, a common type of alcohol, is also the same chemical in alcoholic drinks. Its use as motor fuel was in fact considered during the early years of production of cars, but with the advent of cheaper gasoline from oil, its use was no longer found attractive.

Its present "rediscovery" was prompted largely by demands for a replacement of the "anti-knock" additive methyl t-butyl ether (MTBE) which had been discovered to cause contamination of ground water. MTBE, in turn was introduced to replace the heavy metal lead, the original anti-knock component in gasoline.

Economic issues

Aside from technical issues, social and political issues have arisen with increased ethanol production. Critics point out that production of ethanol, which uses mainly organic waste (e.g., bagasse) and food crops like corn, may sacrifice food production. No less than UN experts on food production have pointed out such very real possibility.

This has become an issue in the United States where corn farms have been converted to ethanol production. In Brazil, the leading ethanol user in its vehicles, ethanol production has been linked to exploitation of farm workers and the degradation of lush tropical forests in the Amazon basin.

Here in the Philippines, there have been accusations that some prominent land owners are trying to circumvent the agrarian reform law by converting their farms to ethanol production.

Another very important economic issue raised is whether its production would in fact generate more energy than the required input. Depending on which side of the fence you are in, the assumptions used and personal bias, the answer to the previous query is either yes or no.

Cal Hodge, an energy consultant based in Houston, Texas (the oil center of the U. S.) in an article published in the prestigious Oil and Gas Journal in September 2002, collated the available studies at that time and found out that range of results varies from a net loss of up to 20 % and net gain of up to 40 %. In order to make any sense to these studies, Hodge averaged their results assuming that the authors have done their best efforts in coming up with their conclusions and came up with with the value that only 92% of the energy expended in ethanol production is recovered. Meaning, it is likely that one in fact loses-- not gains--energy in producing ethanol.

These issues are valid and should be addressed by our lawmakers, policy makers and by any concerned citizen.

Environmental issues

Proponents of ethanol as fuel wax eloquent on purported environmental benefits of ethanol blends, but these benefits are probably overstated.

Because ethanol contains oxygen, it can be regarded as a partially oxidized hydrocarbon. On a per weight basis and using the same engine, an ethanol blend produces less carbon monoxide (CO), a deadly chemical poison found in vehicle exhausts. But at the same time, because of more efficient fuel burning, the same engine actually produces more carbon dioxide (CO₂), the same gas that you exhale and also the same greenhouse gas (GHG) accused of primarily abetting man-made global warming, than pure gasoline.

In the local context though, CO production is more of a function of the state of the car system than on the fuel. Unmaintained engines (e.g., improperly tuned-up) usually generate more CO owing to incomplete fuel combustion, for example.

Ethanol burning has more nitrogen oxides (NO_x), also a major environmental concern, than does MTBE, the compound displaced by ethanol. For E10, the increase in NO_x was found to be statistically significant at 5 % more.

In advanced countries, ethanol blends pass ambient environmental standards not because of ethanol per se, but because of the catalytic converters in exhaust systems which render the nitrogen oxides innocuous. Here, it is doubtful if motorists pay much attention to the state of their catalytic converters, if their cars have them in the first place. Do public utility vehicles like jeepneys , FX and taxis which normally use the "dirtier" diesel have them?

Ethanol is completely miscible with water but not so with hydrocarbons, the main component of gasoline. So ethanol blenders will have to sacrifice easily burned low molecular weight components such as pentanes in favor of higher molecular components (e.g. benzenes). Unfortunately, the latter component releases more of the so-called volatile organic compounds (VOCs) which many of these (e.g., aromatics like benzenes) are considered carcinogens (cancer-causing).

Production of VOCs is far worse in ethanol plants.

Needless to say, this would also increase NOx emission which negates the decrease in CO production.

Safe to use in your car?

Car manufacturers and proponents assure us that E10 blend is safe to use even without extensive modification of your car. It is claimed that the only cars not suitable for properly-blended ethanol gasoline mixtures are those cars manufactured earlier than 1970, and there are not many of those around.

There were many issues involved during the earlier introduction of ethanol blends, but these have been apparently resolved. For example, ethanol reacts with rubber, and can create jams in the fuel pipe. The rubber components in fuel pipes have been replaced by more expensive, but more ethanol resistant fluorocarbon rubber. However, most of the cars in our streets have been manufactured prior to the idea of using ethanol blends and it is likely that the use of fluorocarbon-based rubber is not as extensive as one might think.

As mentioned earlier, ethanol is completely miscible with water, so if even traces of water are introduced into the blend during the manufacture of ethanol, during blending, or even during transport, could cause corrosion in your engine or other car parts. Absolute, or water-free, ethanol is used in blended fuels, but one cannot be sure if the blenders of ethanol producers are zealously meticulous in their processes.

To use or not to use

The P2 discount per liter over the regular unleaded gasoline should be enough incentive to shift to E10. Using it for the sake of the environment is more like a leap of faith than a conclusion based on hard scientific data.

Let us not be intoxicated by overly eager pronouncement of the proponents of the blended fuel regarding saving the environment or saving dollars by avoiding crude oil imports. Due to scarcity of local ethanol, Petron is in fact importing ethanol from Brazil for the roll out of it blended fuel.

What is required is a continuing sober assessment of the issues involved, many of which have not been mentioned in this note.

About the only certainty in shifting to E10 is at least some of the alcohol is going into the tank, and not to the motorists' heads.

Let's drink to that!