Roll No.

104

Environment Management Assignment

BUSINESS OPPORTUNITY IN DETERIORATING NATURAL RESOURCE: ALTERNATIVE FUEL

KISHOR SHIRSAT
WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT & RESEARCH MHRDM (SEM VI) ROLL NO: 104

Topic: Depleting natural resource: Fossil Fuel (Oil/Gas): Alternate Solution: Bio-Diesel (Business Venture)

INTRODUCTION:
In today's world, human pressures on natural resources are increasing, while many resource bases are deteriorating or being depleted, creating an increased potential for competition and conflict between nations or groups within societies. Among the resources that have sources of contention leading or contributing to conflict in the distant or recent past are fresh water, productive land, fisheries, mineral deposits, and fossil fuels.

Deteriorating natural resource: Fossil Fuel (Oil/Gas):

Well-known anecdotally as "liquid gold" or "black gold," oil has long been a valuable natural resource and is the basis of petroleum products including gasoline, kerosene, gas oils and lubricating oils. Oil comes from compressed plants and animals sandwiched in between impervious rock layers, and takes great heat and pressure to form. Fossil fuels will eventually run out if they continue to be used. There are many reasons for the recent oil/gas price increase Unfavorable Geographical Distribution: Petroleum 78% in OPEC areas, mainly Near East. OPEC members control the crude oil prices in the market. Gulf crisis August 2, 1990 and War in Iraq & Cuts in oil producing nations like Nigeria due to local disputes. Resources of Petroleum and Natural Gas Limited. Depletion Mid-Point reached soon. Consumer demand in rising economies like China and India

None of the problems are going to be solved anytime soon, more likely the future will see greater demand without the means to supply the market. The world is consuming huge volumes of fuel, as if there is no tomorrow, yet we have already passed "Peak Oil" and no big new oil-fields have been found. Existing oil fields 1

will become totally exhausted and the world will regress back to the 19th century (no cars, aero planes, plastics etc) if some alternative fuel is not found.

Rapid Growth:
Oil and diesel have been our primary fuels used in automotive, farm and recreational vehicles for decades. Oil is used in power generation, powering transports, cooking, making plastic etc. India is heavily depending on coal or fossil fuels in general fro power generation. The annual report of India's Power Ministry has a plan to grow power by about 80GW as part of their 11th 5-year plan, and 79% of that growth will be in fossil-fuel fired power plants, primarily coal. With global population growth and the development of undeveloped countries like India, energy demand is growing fast: a nearly 50 percent jump in global energy demand by 2035 is expected.

Increasing competition:
As long-term economic growth accelerates, especially in emerging markets such as the BRIC countries (Brazil, Russia, India and China), and despite the current economic downturn, we are using natural resources and energy sources at increasing rates. This leads to increasing competition over needed resources such as oil, water, energy, grain and raw materials. Demand for oil is projected to grow by 50% in the next two decades. Without significant new discoveries or radical innovations, supply is unlikely to keep up. Many automakers pride themselves in their high performance vehicles, and the world has been brain washed into thing that bigger and faster is almost always better. We need to start thinking smarter before its too late. But to go a long way in finding solutions to future fuel needs the answer surely lies in Alternative Fuels. Oil is an exhaustive resource, sooner or later the world will run out, long-term plans is vital to reducing oil demand through improvements in fuel efficient vehicles and greater efforts in developing alternative fuels such as bio-fuels.

My Business Idea: Alternate Fuel Option:

Some of the options for alternative fuels are listed below as well as their shortcomings. If we can overcome these obstacles, we would have a viable (and sometimes greener) solution for the future as well.

Biodiesel:
Bio-diesel as an option has been around for quite some time and has gained some popularity over the past few years. Essentially, this is refined fryer grease, or vegetable oil. Contaminants are removed and often an additive is mixed in to increase the combustion efficiency. It refers to a non-petroleum-based diesel fuel consisting of short chain alkyl (methyl or ethyl) esters, made by Transesterfication of vegetable oil or animal fat (tallow), which can be used (alone, or blended with conventional petro-diesel) in unmodified dieselengine vehicles. Biodiesel is a biofuel produced from various feedstocks including vegetable oils (such as oilseed, rapeseed and soya bean), animal fats or algae. Biodiesel can be blended with diesel for use in diesel engine vehicles. It can also be made from fresh or waste vegetable oils (triglycerides) that are a renewable energy source.

Viability of Biodiesel Production business:

Biodiesel Processing Plant Operators who have a Multi Feedstock Plant function with a competitive edge over others because of the fact that their plant can run on variety of feedstock easily available in the local market. Multi Feedstock Plant operators are less sensitive to Price Fluctuations because they can choose from a range of easily available feedstock that is used to produce Biodiesel. India's total Biodiesel requirement is projected to grow to 3.6 Million Metric Tons in 2011-12, with the positive performance of the domestic automobile industry. Analysis from Frost & Sullivan, Strategic Analysis of the Indian Biofuels Industry, reveals that the market is an emerging one and has a long way to go before it catches up with global competitors

Opportunity of producing Biodiesel:

Ever increasing Crude oil price. Employment generation capacity in rural areas. Better Utilization of fallow cultivable waste land. Low gestation period comparative to other non-edible oil sources. 3

Having carbon credit value (Kyoto protocol). Required in large quantity to sustain huge demand. With use of Biotechnology encouraging primary result.

How to produce and what are the resources of Bio-diesel?

Jatropha oil as biodiesel: Biofuel development in India centers mainly around the cultivation and processing of Jatropha plant seeds which are very rich in oil (40%). Jatropha oil has been used in India for several decades as biodiesel for the diesel fuel requirements of remote rural and forest communities; jatropha oil can be used directly after extraction (i.e. without refining) in diesel generators and engines. MY PERSPECTIVE:

Benefits of producing Jatropha: Economic, scientific and societal aspect:

Jatropha has the potential to provide economic benefits at the local level since under suitable management it has the potential to grow in dry marginal non-agricultural lands, thereby allowing villagers and farmers to leverage non-farm land for income generation. Increased Jatropha oil production delivers economic benefits to India on the macroeconomic or national level as it reduces the nation's fossil fuel import bill for diesel production (the main transportation fuel used in the country); minimizing the expenditure of India's foreign-currency reserves for fuel allowing India to increase its growing foreign currency reserves (which can be better spent on capital expenditures for industrial inputs and production). And since Jatropha oil is carbon-neutral, large-scale production will improve the country's carbon emissions profile. Finally, since no food producing farmland is required for producing this biofuel (unlike corn or sugar cane ethanol, or palm oil diesel), it is considered the most politically and morally acceptable choice among India's current biofuel options; it has no known negative impact on the production of the massive amounts grains and other vital agriculture goods India produces to meet the food requirements of its massive population .Other biofuels which displace food crops from viable agricultural land such as corn ethanol or palm Biodiesel have caused serious price increases for basic food grains and edible oils in other countries.

Governments support:
The Government is currently implementing an ethanol-blending program and considering initiatives in the form of mandates for biodiesel. Due to these strategies, the rising population, and the growing energy demand from the transport sector, biofuels 4

can be assured of a significant market in India. On 12 September 2008, the Indian Government announced its 'National Biofuel Policy'. It aims to meet 20% of India's diesel demand with fuel derived from plants. That will mean setting aside 140,000 square kilometers of land. Presently fuel yielding plants cover less than 5,000 square kilometers. Jatropha incentives in India: Jatropha incentives in India is a part of India's goal to achieve energy independence by the year 2012. Jatropha oil is produced from the seeds of the Jatropha curcas, a plant that can grow in wastelands across India, and the oil is considered to be an excellent source of bio-diesel. India is keen on reducing its dependence on coal and petroleum to meet its increasing energy demand and encouraging Jatropha cultivation is a crucial component of its energy policy. Large plots of waste land have been selected for Jatropha cultivation and will provide much needed employment to the rural poor of India. Businesses are also seeing the planting of Jatropha as a good business opportunity. The Government of India has identified 400,000 square kilometers (98 million acres) of land where Jatropha can be grown, hoping it will replace 20% of India's diesel consumption by 2011. Existing business ventures (few examples): Hindustan Petroleum Corporation Limited (HPCL) joined hands with the Maharashtra State Farming Corporation Ltd (MSFCL) for a Jatropha seed-based bio-diesel venture. As part of the project, Jatropha plants would be grown on @ 500 acres in Nashik and Aurangabad. Maharashtra Government aimed to cultivate Jatropha in the state, with half the land going to the public sector and the other half to the private sector. Pune Municipal Corporation has also taken the lead among Indian cities in using bio-diesel from Jatropha in over 100 public buses MY PERSPECTIVE: BENEFITS OF BIODIESEL FOR THE SOCIETY, ENVIRONMENT & TECHNOLOGY: Biodiesel is not harmful to the environment. A vehicle tends to pollute the environment and emits harmful gasses, if injected with HSD whereas if the engine is using Biodiesel it emits no harmful gasses rather keeps the environment pollution free. Biodiesel may not require an engine modification. Biodiesel can be blended with diesel so as to improve the efficiency of the engine without any hassles.

Biodiesel is cheap. You can even make biodiesel in your backyard. If your engine can work with biodiesel fuel alone, then you really need not go to the gas station to buy fuel. You can just manufacture some for your own personal use. Any Vehicle using Biodiesel has very low idle stating noise. Biodiesel is cost effective because it is produced locally. Biodiesel as a fuel not only helps reducing the pollution, reduces health hazards and gives our society A CLEANER AND GREENER TOMORROW. Biodiesel is environmental friendly and ideal for heavily polluted cities. Bio Diesel produces 80% less carbon dioxide and 100% less sulfur dioxide emissions. It provides a 90% reduction in cancer risks. Bio Diesel extends the life of diesel engines. Bio Diesel is cheaper than mineral oil diesel. Bio Diesel is conserving natural resources. Easy to use: Biodiesel can be used in existing engines, vehicles and infrastructure with practically no changes. Biodiesel can be pumped, stored and burned just like petroleum diesel fuel, and can be used pure, or in blends with petroleum diesel fuel in any proportion.

Emissions & Greenhouse Gas Reduction: Biodiesel provides significantly reduced emissions of carbon monoxide, particulate matter, unburned hydrocarbons, and sulfates compared to petroleum diesel fuel. When blended with petroleum diesel fuel, these emissions reductions are generally directly proportional to the amount of Biodiesel in the blend.