Sirona Fuels wants to move from the fryer to the farm.
The small San Francisco-based company – which is holding its coming out part at the National Biodiesel Conference and Expo in San Francisco – says it can make economically competitive biodiesel from jatropha.
The company's strategy essentially revolves it its ability to negotiate. It got a 15 million gallon-a-year refinery and a limited number of customer contracts by purchasing Blue Sky Biofuels, which had been producing biodiesel from waste grease harvested from the deep-fat fryers in this great land of ours. Thus, the angel/self-funded Sirona is getting into biodiesel refining somewhat quickly and inexpensively.
"We've got steel in the ground and we've got contracts with customers," said CEO Paul Lacrouciere.
Second, it will ramp down its use of waste grease in favor of jatropha, a shrubby plant most commonly found in India. Jatropha is relatively oily, grows on marginal land and doesn't need much in the way of water or fertilizer. Since it doesn't compete with food and often not even land food would be grown on, jatropha isn't as subject to commodity price fluctuations as other feedstocks, he claimed.
To get its jatropha, Sirona is lining up fixed-price agreements with farmers in Haiti, India and Indonesia. Sirona will plant 2,000 acres of jatropha in its pilot-farming project in Haitia. That will result in 600,000 gallons of oil a year, or 300 gallons per acre. Technically, the company doesn't have contracts with customers. Things like liquidated damages clauses are tough to enforce in emerging nations. But the company is trying to build strong local links, which is even more important. Jatropha, Lacrouciere added, is also tough to displace as a crop because it's a bush. Farmers can't simply pull it up and switch to another crop.
Sirona faces an uphill battle and one that in many ways is even steeper than the ones faced by other alt-fuel makers. The biodiesel market is already fairly crowded and many of the competitors are better funded. Gas and diesel prices have also plummeted with the economic downturn. Many believe the future will belong to algae, which many assert can conservatively deliver 2,000 to 7,000 gallons per acre in the relatively near future (see Green Light post). And, of course, they need to ship this oil from Haiti to the states in diesel-burning container ships.
"Algae is wonderful and they will hit commercialization eventually, but jatropha is here and now. We will grow in Haiti this year," said Lacrouciere.