Central Asia s Vast Biofuel Opportunity

The current revelations of a International Energy Administration whistleblower that the IEA may have misshaped key oil projections under U.S. pressure is, if real (and whistleblowers hardly ever step forward to advance their professions), a slow-burning atomic surge on future global oil production. The Bush administration's actions in pressing the IEA to underplay the rate of decline from existing oil fields while overplaying the possibilities of discovering brand-new reserves have the prospective to throw governments' long-term preparation into chaos.


Whatever the reality, rising long term international needs seem certain to overtake production in the next years, especially provided the high and increasing expenses of establishing new super-fields such as Kazakhstan's offshore Kashagan and Brazil's southern Atlantic Jupiter and Carioca fields, which will need billions in financial investments before their first barrels of oil are produced.


In such a circumstance, additives and substitutes such as biofuels will play an ever-increasing role by stretching beleaguered production quotas. As market forces and rising rates drive this technology to the leading edge, one of the wealthiest potential production locations has actually been absolutely neglected by financiers up to now - Central Asia. Formerly the USSR's cotton "plantation," the region is poised to become a major player in the production of biofuels if enough foreign financial investment can be acquired. Unlike Brazil, where biofuel is produced mostly from sugarcane, or the United States, where it is mainly distilled from corn, Central Asia's ace resource is an indigenous plant, Camelina sativa.


Of the former Soviet Caucasian and Central Asian republics, those clustered around the shores of the Caspian, Azerbaijan and Kazakhstan have actually seen their economies boom due to the fact that of record-high energy prices, while Turkmenistan is waiting in the wings as an increasing manufacturer of gas.


Farther to the east, in Uzbekistan, Kyrgyzstan and Tajikistan, geographical isolation and relatively little hydrocarbon resources relative to their Western Caspian next-door neighbors have mostly inhibited their ability to capitalize rising global energy needs already. Mountainous Kyrgyzstan and Tajikistan remain largely reliant for their electrical needs on their Soviet-era hydroelectric facilities, but their increased requirement to produce winter season electrical power has caused autumnal and winter season water discharges, in turn significantly impacting the farming of their western downstream next-door neighbors Uzbekistan, Kazakhstan and Turkmenistan.


What these 3 downstream countries do have however is a Soviet-era legacy of agricultural production, which in Uzbekistan's and Turkmenistan case was mostly directed towards cotton production, while Kazakhstan, beginning in the 1950s with Khrushchev's "Virgin Lands" programs, has ended up being a major manufacturer of wheat. Based on my discussions with Central Asian government authorities, given the thirsty demands of cotton monoculture, foreign propositions to diversify agrarian production towards biofuel would have excellent appeal in Astana, Ashgabat and Tashkent and to a lesser extent Astana for those sturdy investors going to bank on the future, particularly as a plant native to the area has already proven itself in trials.


Known in the West as false flax, wild flax, linseed dodder, German sesame and Siberian oilseed, camelina is attracting increased clinical interest for its oleaginous qualities, with several European and American business already investigating how to produce it in commercial amounts for biofuel. In January Japan Airlines undertook a historic test flight utilizing camelina-based bio-jet fuel, ending up being the very first Asian provider to experiment with flying on fuel obtained from sustainable feedstocks throughout a one-hour demonstration flight from Tokyo's Haneda Airport. The test was the culmination of a 12-month assessment of camelina's operational efficiency capability and prospective business viability.


As an alternative energy source, camelina has much to suggest it. It has a high oil material low in hydrogenated fat. In contrast to Central Asia's thirsty "king cotton," camelina is drought-resistant and unsusceptible to spring freezing, requires less fertilizer and herbicides, and can be used as a rotation crop with wheat, which would make it of specific interest in Kazakhstan, now Central Asia's significant wheat exporter. Another bonus of camelina is its tolerance of poorer, less fertile conditions. An acre sown with camelina can produce as much as 100 gallons of oil and when planted in rotation with wheat, camelina can increase wheat production by 15 percent. A ton (1000 kg) of camelina will contain 350 kg of oil, of which pressing can draw out 250 kg. Nothing in camelina production is wasted as after processing, the plant's particles can be used for animals silage. Camelina silage has an especially attractive concentration of omega-3 fatty acids that make it an especially great livestock feed prospect that is just now getting acknowledgment in the U.S. and Canada. Camelina is fast growing, produces its own natural herbicide (allelopathy) and completes well versus weeds when an even crop is developed. According to Britain's Bangor University's Centre for Alternative Land Use, "Camelina could be a perfect low-input crop appropriate for bio-diesel production, due to its lower requirements for nitrogen fertilizer than oilseed rape."


Camelina, a branch of the mustard household, is indigenous to both Europe and Central Asia and barely a new crop on the scene: archaeological evidence suggests it has actually been cultivated in Europe for a minimum of three millennia to produce both grease and animal fodder.


Field trials of production in Montana, presently the center of U.S. camelina research, revealed a broad range of results of 330-1,700 lbs of seed per acre, with oil content differing between 29 and 40%. Optimal seeding rates have actually been identified to be in the 6-8 pound per acre range, as the seeds' little size of 400,000 seeds per pound can produce problems in germination to attain an optimal plant density of around 9 plants per sq. ft.


Camelina's capacity could enable Uzbekistan to start breaking out of its most dolorous legacy, the imposition of a cotton monoculture that has deformed the nation's attempts at agrarian reform because accomplishing independence in 1991. Beginning in the late 19th century, the Russian government identified that Central Asia would become its cotton plantation to feed Moscow's growing textile market. The process was accelerated under the Soviets. While Azerbaijan, Kazakhstan, Tajikistan and Turkmenistan were also ordered by Moscow to sow cotton, Uzbekistan in particular was singled out to produce "white gold."


By the end of the 1930s the Soviet Union had actually ended up being self-sufficient in cotton; 5 decades later on it had ended up being a significant exporter of cotton, producing more than one-fifth of the world's production, concentrated in Uzbekistan, which produced 70 percent of the Soviet Union's output.


Try as it may to diversify, in the absence of options Tashkent remains wedded to cotton, producing about 3.6 million lots each year, which generates more than $1 billion while constituting around 60 percent of the nation's hard cash earnings.


Beginning in the mid-1960s the Soviet federal government's regulations for Central Asian cotton production largely bankrupted the area's scarcest resource, water. Cotton utilizes about 3.5 acre feet of water per acre of plants, leading Soviet organizers to divert ever-increasing volumes of water from the region's 2 primary rivers, the Amu Darya and Syr Darya, into inefficient watering canals, leading to the significant shrinkage of the rivers' final location, the Aral Sea. The Aral, as soon as the world's fourth-largest inland sea with a location of 26,000 square miles, has actually shrunk to one-quarter its initial size in one of the 20th century's worst ecological disasters.


And now, the dollars and cents. Dr. Bill Schillinger at Washington State University just recently described camelina's business model to Capital Press as: "At 1,400 pounds per acre at 16 cents a pound, camelina would generate $224 per acre; 28-bushel white wheat at $8.23 per bushel would gather $230."


Central Asia has the land, the farms, the watering infrastructure and a modest wage scale in comparison to America or Europe - all that's missing out on is the foreign investment. U.S. financiers have the money and access to the know-how of America's land grant universities. What is certain is that biofuel's market share will grow with time; less particular is who will reap the advantages of establishing it as a feasible concern in Central Asia.


If the recent past is anything to pass it is not likely to be American and European financiers, fixated as they are on Caspian oil and gas.


But while the Japanese flight experiments show Asian interest, American financiers have the scholastic know-how, if they want to follow the Silk Road into establishing a new market. Certainly anything that lessens water use and pesticides, diversifies crop production and enhances the lot of their agrarian population will receive most cautious consideration from Central Asia's federal governments, and farming and grease processing plants are not only much cheaper than pipelines, they can be developed more quickly.


And jatropha's biofuel potential? Another story for another time.