Biofuels: Jatropha

Biofuel options abound, and one of the more interesting is jatropha. As the cost of oil continues to annoy people around the world, and hurricanes raise worries about a stable oil supply, science is exploring alternative means of energy. From electric cars to biofuels, the idea is to find a way to move energy production into the 21st Century (limited non-renewable energy sources are soo 20th Century). One of the more interesting biofuels is an oil known as jatropha. From Reuters:

A new crop that is being used already is jatropha, a resilient, oil-rich, tropical plant that can be grown on waste land and even introduces nutrients to the soil. Its oil is already used in India to power diesel cars and turbines.

Jatropha has grabbed headlines because it avoids the biggest controversy surrounding biofuels: the ethical debate over whether agricultural resources should be used for energy when millions across the planet go hungry.

Jatropha is an ethical alternative to such biofuels as ethanol, which critics say deplete food sources like corn and sugar cane. Additionally, land designated for biofuel production often competes with agricultural interests for food production. Jatropha offers an interesting solution. Not only does it grow in waste lands, but it can potentially turn those lands into areas later used for food production.

Some companies are already investing in jatropha. One of the big names on the list? BP. That's right, BP (BP) is making plans to establish a plantation in Indonesia that will provide the resources for a biofuel refinery. As one might guess, other investors aren't nearly as prominent (or U.S.-based). But that doesn't change the fact that change is coming.

As for BP, it could mean increased value down the road. Though the company is currently suffering from the volatility afflicting other energy stocks, it could recover in the future. After all, if biofuels really are the wave of the 21st Century, the companies that invest in them will reap the benefits. The flipside, however, is that biofuels have years to become truly profitable, and right now the stocks are somewhat risky. But as more companies and investors give them a try, biofuels could offer solid energy investing opportunities in the future.

Disclosure: I am investing in BP.

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