Myanmar biofuel effort raises doubts

By Ed Cropley

March 12, 2008 (Reuters)- PYAW GAN, Myanmar: They may look leafless and lifeless, but Kyaw Sinnt is certain that his nut trees are the key to Myanmar's chronic energy shortage.

Others are less sure, saying the junta's plan to turn the country into a biofuel plantation producing physic nuts is yet another example of the ill-conceived central planning that has crippled a once promising economy.

"Everybody can take part and it's good for the environment," Kyaw Sinnt said, standing next to a small patch of the sticklike shrubs in Pyaw Gan, a bamboo hut village typical of the parched region southwest of Mandalay.

Fortunately for Pyaw Gan's residents, the plants, also known as jatropha, are drought-resistant, and energy experts consider them a very promising source of biofuel because they do not displace food crops like sugar or corn.

In mid-2006, the State Peace and Development Council, as the junta is formally known, decreed that every farmer with 0.4 hectares, or an acre, was required to plant 200 physic nut seeds around the perimeter of the plot.

Even though farmers were required to buy the seeds from the government for 800 kyat, or 60 U.S. cents, about half a day's wages for a manual laborer, the effort has produced visible results.

Now, jatropha groves can be seen across the country, from deserted roadsides in the central plains to deforested hills near the Chinese border and in window-boxes in the heart of Yangon, the commercial capital.

A year ago, a senior Energy Ministry official was telling oil industry executives in Singapore that 2.8 million hectares of plantation would be "in full swing" by mid-2007 and that biodiesel exports would follow quickly.

Such results would represent a major turnaround for a country that imported $600 million in oil products in 2006 and slashed diesel subsidies last August, provoking the biggest anti-government protests in 19 years.

But it is not clear that the generals have kept their side of the bargain and built the refining plants necessary to turn the nuts into biodiesel. Several conglomerates with close ties to the regime have announced plans to get involved, but progress on actually producing biodiesel is not evident, either.

A government minister has even suggested that people simply grind the nuts in their own homes and then pour the resultant oily residue straight into their fuel tanks.

Some analysts have their doubts.

"How these jatropha acreages will be converted into biodiesel has not yet been determined, since Burma lacks anything like the capacity to refine physic nuts into useable fuel," said Sean Turnell of Macquarie University. "The whole episode is illustrative of a more profound and pervasive system of centralized and often irrational decision making that lies at the heart of Burmese agriculture."

There certainly does not seem to be anything remotely like a processing plant anywhere near Pyaw Gan, which is unreachable by vehicle during the wet season.

"It's a complete waste of time," said one businessman in the town of Nyaung U, who did not wish to be named for fear of recrimination. "There is no processing plant, and if there was, it would cost four times as much as normal diesel. It's all for show, just like our wonderful new irrigation channels that never have any water because they never turn the pumps on."

Doubting the junta's stated motive, ordinary Burmese have come up with their own theories. The most popular, but not necessarily the most credible, is that it is all a wordplay plan by the superstitious generals to negate the spiritual power of Aung San Suu Kyi, the detained opposition leader and Nobel Peace laureate .

In Burmese, physic nuts are roughly pronounced chay soo, which is very close to an inversion of Aung San Suu Kyi's shortened name, pronounced soo chee.

Source: International Herald Tribune