BP has indeed given up on jatropha, the shrub once touted as the great hope for biofuels, and walked away from its jatropha joint venture for less than $1 million.
Speculation abounded this summer that BP was ready to jettison its participation in the project with British partner partner D1 Oils. The original plan called for the investment of $160 million to turn the jatropha tree into feedstock to make transportation fuel. Now, BP will turn its alternative-fuel efforts toward ethanol in Brazil and the U.S., as well as biobutanol.
The not-with-a-bang-but-a-whimper end to BP's jatropha adventure underscores a couple of key points. First, the inedible but hardy plant that just a few years ago seemed like it could revolutionize biofuels has turned into a bust. The initial attraction was that it grows on marginal land, so it wouldn't compete with food crops. But marginal land means marginal yields. And jatropha turned out to be a water hog as well, further darkening its environmental credentials.
Second, for all the ink spilt over jatropha-and Big Oil's interest in biofuels in general-the value of some of those investments really is miniscule. D1 Oils will buy out BP's half of the venture for 500,000 pounds-less than the price of a nice apartment in London-even though the joint venture is apparently worth more than 7 million pounds.
