Singapore (Platts)--11Oct2007

Long lines at water pumps and dry taps, which are already common sights
across the Indian subcontinent, could become even more frequent if the
economic juggernaut opts for biofuels to drive its growth. And the same thing
is true of its neighbor, China. 
     Deciding to hike production of biofuels could lead to severe water
problems for the two countries, warns a recent study released by the
International Water Management Institute.
     The Colombo-based non-profit scientific organization's study, led by
Charlotte de Fraiture, said as the race for biofuels from crops such as
sugarcane and maize picks up speed, it will deplete already-scarce water
resources in India and China.
     "Because of their limited water resources, such countries will face
serious challenges to meet the predicted increase in demand for food produce,
let alone sustain any further growth prompted by expanding biofuel
production," she said.
     For instance, by 2030, India's demand for cereals is set to rise by 60%
and for sugar, of which it is the world's largest consumer, by more than
double. To meet this demand, the country would need 84,000 billion liters of
water for irrigation, roughly the annual flow of water in one of its major
rivers, the Krishna in southern India.
      To get 9 billion liters of bioethanol, that would meet about 10% of the
country's petrol demand by 2030, India would need another 22,000 billion
liters of water to irrigate the sugarcane crop that would be used to produce
the biofuel, the study pointed out.
      In the case of China, which uses maize to produce ethanol, 26,000
billion liters of water would be needed to irrigate the extra crop that needs
to be grown to meet 9% of the country's demand for gasoline by 2030. And this
is in addition to the 73,000 billion liters water needed for cereal crop
irrigation, it added.
      And all this in a scenario where the two countries "have already
breached the limits of sustainable water use," de Fraiture said. 

     US WARNED OF SIMILAR CONSEQUENCES
     IWMI's study comes on the heels of a warning by the US' National
Research Council of regional water shortages if projected hikes in the use of
corn to produce ethanol goes ahead without simultaneously adopting new
practices and techniques in the country. 
      At the World Water Week conference in Stockholm in August too, experts
expressed their fears that the euphoria over biofuels was clouding the real
risk to the world's water resources. "When governments and companies are
discussing biofuel solutions, I think water issues are not addressed enough,"
said Johan Kuylenstierna, director of the conference.
      Brazil, the largest producer of ethanol using sugarcane and which lies
in a water-rich region, uses 2,200 liters water to produce a liter of ethanol.
India, which already faces water problems, uses 3,500 liters of water to
produce the same amount of ethanol. 
      Meanwhile, the US National Research Council committee suggested that
better and different use of water for crops used to produce biofuels might
help stem the harmful effect on water systems. One suggestion was to use waste
water to irrigate them, keeping cleaner water for food crops.

     CALLS FOR COORDINATION BETWEEN GOVERNMENT AND AGENCIES
     But for such measures to work, there has to be coordination between the
government and agencies that would implement the new techniques and methods,
something that is not easy in countries such as India and China.
     Last year, for instance, Chinese biofuel producers ignored a government
limit on the amount of corn they are allowed to use for ethanol production,
leading to a steep hike in corn prices. While the official permit was for not
more than 3 million mt, biofuel producers consumed a hefty 16 million mt.
Small, unlicensed producers were blamed for this, which led corn prices to
soar 15% in 2006.
     Even in Iowa, local daily Des Moines Register said in a June report that
it found 22 of the 34 ethanol and biodiesel plants in operation had been cited
by the local Department of Natural Resources for environmental violations over
the last six years, most of them for not preventing wastes from spilling into
waterways. 
     But de Fraiture said in her study that the water needed to process crops
into biofuel is negligible compared to amount that goes into growing them.
"Unless other, less water-intensive, alternatives for feedstock are
considered, biofuels are not environmentally sustainable," she added.
--E Shailaja Nair, shailaja_nair@platts.com