Friday, September 25, 2009 11:00 PST
SG Biofuels: Amasses World's Largest Jatropha Library, Aims For $1/Gallon Oil
By Justin Moresco
In the rush to grow energy crops for producing alternative fuels, jatropha has often been heralded as the most promising because it can be grown on marginal land. But so far jatropha hasn't lived up to the hype — requiring too much water and producing too little yield — prompting some early investors, like oil giant BP, to give up on the crop. But a young Encinitas, Calif.-based startup, SG Biofuels, says the problem with these early efforts was that they put the cart before the horse.
The firm has spent the last three and a half years amassing what it says is the largest and most diverse library of jatropha genetic material in the world. The team scoured India, Southeast Asia, and most importantly Central America, the native home of the shrub, to build the firm's library. "This is the foundation for any effective crop improvement program, and we were shocked that no one had done that," SG Biofuels CEO Kirk Haney told us. "That is step one, but many jumped to step five by putting [jatropha] in the ground and crossing their fingers."
SG Biofuels scientists are applying breeding techniques and genetic engineering to this pool of jatropha material to produce superior strains that could be harvested for oil. That oil could then be processed into a variety of bio-based products, including biodiesel and feedstock substitutes for the petrochemical and jet fuel industries.Besides the library, Haney said the firm's other advantage over competing biofuel companies is that it's focused on doing a few things well and not spreading itself out too far along the value chain. Despite its name, SG Biofuels has no intention in the near term to extract oil or process it into products itself; that would be done by growers and energy outfits. Instead, the startup aims to develop superior strains and then provide services to plantations for growing their seeds.
SG Biofuels has already had some success. It's identified strains that can grow in higher elevations and colder climates than initially thought possible. The company says its jatropha crop could already produce oil at $1.50 per gallon (before refining), if at commercial scale, and Haney predicts that the cost will drop to less than $1 per gallon within the next two years with the release its first commercial product. At that price, SG Biofuels' jatropha would yield oil that is
cost-competitive with petroleum while still offering growers a healthy margin, Haney says.