Wasted billion

Philippine Daily Inquirer

1:34 am | Saturday, November 12th, 2011

It is a big letdown, to be sure. And another example of the Arroyo administration’s extravagant and reckless handling of people’s money. For how else would one describe a huge governmentinvestment that, after two years, shows nothing by way of results?

A few days ago, Energy Secretary Jose Rene D. Almendras revealed that the government lost a P1-billion allocation earmarked for the production of jatropha. Before that Almendras announced that the state-owned PNOC Alternative Fuels Corp. (PNOC-AFC) was abandoning its jatropha program, after it found that the plant was not commercially viable.

Jatropha used to be a little-known plant of little value. But when word spread that it was a rich source of biofuel and, unlike food-based biofuel sources, it was non-edible, “drought-tolerant,” growing on barren lands and needing little tending, environmentalists and the energy world went agog over it. More so because the good news came amid soaring oil prices (that signaled, some said, the end of cheap fossil fuel), worsening pollution woes and a looming world foodcrisis.

A number countries, like Brazil and the United States, were then already into production of environment-friendly biofuels. But their success with bioethanol, which is largely produced from food crops (e.g., corn, sugar, cassava), soon unearthed a downside: while providing higher income to farmers, the industry competed with food production, eating into agricultural lands and thus diverting, as a Time magazine put it, “too many crops from too many mouths.”

Against this backdrop, jatropha was hailed as a “dream fuel.” Jatropha thus easily became a “craze” in a number of countries. India, China and Kenya, to name a few, set aside thousands of hectares of land for jatropha cultivation. By December 2008, Air New Zealand had successfully test-flown a Boeing 747 “using a 50-50 blend of jatropha and aviation fuel.” In 2009, then President Gloria Macapagal-Arroyo released P1 billion for the jatropha project.

It was not the first time that the Philippines was venturing into jatropha “development.” In 2007, PNOC-AFC started putting up jatropha nurseries, inked several agreements with potential jatropha investors, and entered into a P10-billion financing contract with the LandBank for jatropha projects. It continued networking and forging partnerships the following year to boost interest in the jatropha industry. And in 2009 and 2010, it went into agreements for the development of jatropha plantations.

It is not the P1-billion investment itself, or its judiciousness, that is raising eyebrows now. It is how such a huge amount of public money was rashly spent. “The proper scientific protocol in programs involving new technologies is to first conduct a pilot test and a thorough evaluation of its results to prove its viability before rolling it out,” Science Secretary Mario Montejo said, as he questioned the Arroyo administration’s decision to go into large-scale jatropha production. Almendras said the P1 billion lost just “covered the cost of planting some 4,000 hectares to jatropha.” How many billions more could have been lost or wasted in the other stages of jatropha’s project development?

Some jatropha investors, like Trans-Asia Renewable Energy Corp., quickly opted out of the project. Francisco Viray, Trans-Asia president, said their efforts to produce biofuel from a plantation of jatropha in Laguna failed to reach commercial quantity. “We found out early in thegame that there are some problems on the agricultural side,” Viray said, noting that contrary to popular belief, jatropha requires a lot of water. This finding jibes with a 2009 findings of the Proceedings of the National Academy of Sciences that showed jatropha actually “used more water per gallon of biofuel than many other biofuel crops.” And this fact alone should have given pause to a responsible government before going all-out in promoting jatropha.

Even then, there were enough lessons to learn from other countries where similar undertakings were failing. In Kenya, for example, scientists noted that there was “no proven, widely disseminated method for growing jatropha properly.”

Did the government look at these basic issues before going on a spending spree to promote jatropha? Was the jatropha project really a serious investment made by the Arroyo administration, or just another excuse to fill some private pockets?

Something smells here. An investigation is in order.