A fascinating and troubling story is unfolding in the energy sector. The five-fold rise in petroleum prices in as many years is creating incentives for the emergence of many new commercially feasible non-petroleum energy sources. Hence, nuclear power has become more profitable, solar and wind power have become financially sustainable, and the development of many other experimental technologies has accelerated. Geo-thermal power is one such example. And most importantly, bio-fuels have gathered momentum.

Currently the most common bio-fuels are derived from corn, sugarcane, wood (for example, jatropha), and palm oil; of course great potential exists in deriving them from other agri-products as well, it is only a matter of time when many other items are brought into the bio-fuel set.

It is said that bio-fuels have great benefits vis-a-vis petroleum based fuels. For one, most transportation is based on the internal combustion engine that requires clean burning fuels in the liquid form and having high energy density. Many bio-fuels meet these criteria, and many others currently under development eventually will. Second, bio-fuels are renewable unlike petroleum, coal and even nuclear fuel. Third, in the process of plant growth carbon gets absorbed, hence the carbon release at the combustion stage is countered by the carbon absorption in the plant growth stage. The net result, at least theoretically, is zero net carbon emission and therefore reduced global warming. Fourth, bio-fuels being agriculture derived output have tremendously higher employment potential than petroleum based fuel. Thus bio-fuel could lead to increased equity and reduced poverty. Fifth, since we can produce our own fuel, this would also contribute to reduced energy dependency for India.

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