“A good time to invest”, a special Biofuels Digest report on India

By Biofuels Digest special correspondent Joelle Brink

The latest issue of Business Week will arrive on your screen or in your mailbox with the cover story “How Safe is India?” The answer: it’s a good deal safer now than it was before the attack on Mumbai, in large part because the rest of the world has finally come together to address the covert war waged by terror outfits linked to Pakistan’s Inter-Services Intelligence Agency (ISI).

While some writers have raised fears of violence fuelled by lack of opportunity for Muslim youth, this ignores the work and example of Dr. A.J.P. Abdul Kalam,  India’s immediate past President, the son of a Muslim fisherman who rose to head the Indian missile defense program and work for education, science and internet technology that serves the poor. His efforts led to the new, “connected” India where farmers check commodity prices on their cell phones and people of all faiths have a big stake in cooperation. The proof is in the fact that the attacks claimed by the “Indian Mujaheddin” actually turned out to come from the Pakistani Lashkar-e-Taiba, and the Hindu extremist parties are faring poorly at the polls.

In short, it’s a great time to invest in India, and now that a serious crack-down on terrorism may be in the works it’s time to start looking at Pakistan and Afghanistan as well.

Both nations are turning to biofuels to replace opium poppy cultivation and terrorism with high value biofuel crops that can substitute for foreign oil at home and also improve their balance of trade.

Pakistan produces about two million tons of molasses a year, most of which used to be exported at a price so low that it was a major contributor to the country’s trade deficit. An even larger contributor was Pakistan’s need for $11 billion worth of imported oil annually. Pakistan’s oil dependence in turn led it to enter into partnership with Iran on an oil pipeline even though Iran is predominantly Shiite, and Pakistan Sunni Muslim. As is often the case, oil makes strange bedfellows.

Biofuels have the potential to reduce Pakistan’s dependence on foreign oil and help its citizens regain control of their own destinies. Pakistan already has an emergent ethanol industry that recently lobbied for a 5% national ethanol mandate. However the oil marketing companies countered that biofuels are needed only during fuel shortages, that Pakistan has no gasoline shortage, and that its primary need is for diesel. No mention was made of Bharat Petroleum’s recommendation for 10% ethanol blending in diesel fuel.

Pakistan also has a nascent Jatropha biodiesel industry, currently in the R&D stage. However that is currently stalled as well due to strained relations between the Indian and Pakistani governments. Judicious technical assistance to Pakistan’s biofuel producers, combined with pressure by the international biofuels community on the oil marketing companies, could get biofuel development back on track and help Pakistan lessen its oil dependence.

In Afghanistan, both farmers and the government are beginning to take an interest in substituting high value biofuel feedstocks for opium poppy crops. Despite the high price of the end product—heroin—in export markets, farmers and their communities actually see little profit from their crops. Biofuels, and biodiesel in particular, could be made locally, used in farm equipment and transportation, and could also be sold at a price comparable to petroleum diesel—high enough to significantly increase the local standard of living.

One thing is clear—the development of thriving biofuel industries is essential to peace and development in this troubled part of the world.

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