My entrepreneurship efforts are in the field of Telecoms and the Internet where I founded Viatel, Jazztel, Ya.com, Einsteinet and now Fon. My investments however are in alternative energies. Together with partners I have built an 18MW wind farm that we are expanding in the process of expanding to 50MW and we are also in the process of asking permits for solar and wind energy for another aprox 150MW.

I invest in alternative energies for two main reasons, one is because I believe I can make money with them and two because I, like many others (but unfortunately not enough others), believe that burning fossil fuels is bad for the environment and bad for global peace. Today however I was presented with a potential investment in biodiesel and so far, while convinced that it can be a money maker, I have concluded that biodiesel production is not a sustainable and decided against the investment. Why? Mainly because in a world in which over a billion people go hungry how can we morally justify burning food to drive cars?

In my view the solution to transportation in the short term lies in the use of hybrid cars ( I drive one) and simply smaller lighter cars. In the long term however I think the real solution will be hydrogen cars which will not polute and will be fueled from renewable energy sources. When I was a child my father, Carlos Manuel Varsavsky, had the idea to build Aluar while working for Manuel Madanes a very successful Argentine industrialist now deceased. The key to Aluar´s tremendous success was its location, Patagonia. Patagonia has a lot of hydroelectric energy potential but very few electricity consumers so an aluminum smelter by the sea that converted alumina from Australia and turned into aluminum using hydroelectric energy made tremendous sense then as it does now, 30 years later. Aluar has made billions of dollars in profits since it was built. While my father died in 1983 I am quite convinced that the 2006 of Carlos Varsavsky would be to do the same, but for hydrogen production. It is clear to me that we have to scout around the world for locations with tremendous renewable energy potential and no people, Patagonia is still one of them. The artic zone and Antartica lwith their tremendous wave energy, tidal energy and wind energy potential look like others.

Biodiesel has some advantages but as the wikipedia says there would not be enough arable land in the United States to meet the energy needs of the transportation energy needs of the United States. This is not a sustainable solution. Now hydrogen may also not be a sustainable solution if its made out of fossil fuels. The Bush administration has been talking a lot about hydrogen cars but they are not working enough on the source of the hydrogen being renewable. Hydrogen made of renewable sources is the key. In the meantime as traffic jams increase around the world, hybrid cars make tremendous sense, and some biodiesel or diesel powered hybdrid cars would make an even better interim solution.

Follow Martin Varsavsky on Twitter: twitter.com/martinvars

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Hadi Kabalan on April 1, 2006  · 

Martin, that is the most common sense argument against over-investment in bio-fuels I have heard so far! Thank you for putting it so well. I also have been investing in sustainable energy/tech. One of the areas of importance will making the magnets that drive hybrid/electric vehicles increasingly more efficient, so that we can travel larger distances on smaller batteries. A lot of great work is being done on that in Japan (the proximity of Toyota helps). Speaking of Japan, another area with high natural energy potential, with a shrinking population, extreme lanscapes, and neglected infrastructure is Hokkaido, the northern island of Japan. It also provides close proximity to China and Russia in terms of potential end markets…

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BobPixel on April 1, 2006  · 

I am so thrilled you put your money where it will do the most good!

Hydrogen is a pretty good fit for electricity from your wind farms, but don’t write off biofuels just yet. There is so much mis-information that it is very difficult to figure out what is real about the entire subject. Happily, the tide has turned on this: some honest science and reputable work is being done in this field.

As near as I can tell, the unseen conversation is still about centralized solutions versus distributed solutions. Wind power is a distributed solution. Petroleum fuels are not. Many small power sources, owned by many parties, is a more flexible way to respond to change. The oil industry is monolithic and appears willing to drive human civilization into the ground, as long as it gets what it wants.

The hydrogen economy is more of the same: the infrastructure to support it is so big it will require an Apollo-level government program to get it going, and only the top percent will truly benefit from it.

The real power of biofuels (biodiesel and ethanol) is they will be profitable without being centralized. They can be regional resources. Canola grows brilliantly in Canada, and yields an oil that is more resistant to gelling in cold weather than the soybean that grows well further south.

Furthermore, biofuels can be grown on marginal lands, lands that currently are either fallow or used for grazing. Even then, it’s not a loss, because oilseed mash is excellent feed for livestock. Don’t let anyone get into a fallacious food vs fuel argument with you.

I would strongly suggest you keep investigating which of your choices will result in the kind of world you are investing to create.

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Stephan on April 2, 2006  · 

And don’t forget about the many little biogas-power plants. You can generate power out of shit. Oh course not much, but it can help.

We also have to think about waste of energy. If you slaughter a cow, nearly 100% of the animal is used. bones, meat, skin… . We have to reach the same level with our energy consumstion.

Another example is the absurd transport situation we have in the industrialized countries. In Europe cattle get’s loaded in Poland onto trucks, the drive to spain. There in Spain, the cattle get’s slaughtered (it’s cheaper there, than in Germany) and the meat goes back into the supermarkets in Germany. Of course, not all the meat goes this way, but the situation is everything else than sustainable.

The loss of regionality (in material matter) ,because of cheap transport, destroyed many small cycles of matter. Look at the butchers in the smaller villages.

I could keep talking, but the advancement of mankind killed many energy-smart solutions. Also the quality of life get’s worser and worser. (Anyone likes meat from the supermarket? It’s not fresh and full preservatives). And the bad thing about migration into cities.

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Karl-Friedrich Lenz on April 2, 2006  · 

The Gobi desert in Mongolia is another potential location, conveniently located next to China where the need to replace gasoline cars with hydrogen cars will be the strongest in coming decades.

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Antoin O Lachtnain on April 2, 2006  · 

Well, the real benefit of biofuels from an economic point of view is that the production capacity is stable and predictable, compared to fossil fuels. (Of course there are environmental benefits too.)

A lot of land in the northern hemisphere is currently lying fallow, and could well be used for biomass. On the other hand, a lot of food is exported from the developing world to the developed world which could be used to feed the hungry. The issue with global hunger is more a logistical and economic than it is to do with land use.

In the final analysis, growing biomass is just a method of collecting solar energy and converting it into a useful form. It requires resources, just the same as the other methods (i.e., Wind, hydro, tidal and solar panels which are all dependent on the energy of the cosmos) The only question is whether the impact and cost of the biomass solution is greater or less than the other methods. One big benefit of biomass is that you don’t have to figure out how to store the energy after you’ve created it, whilst with the other methods, there is a big storage problem to resolve if you want to use the energy for transportation.

The transport energy demand of the US is absolutely massive by any standards. It may simply be unsustainable.

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David on April 3, 2006  · 

Biodiesel made from waste hydrocarbon material (not food but stuff such as switchgrass) would be a good stop-gap measure. Is there enough waste hydrocarbon materials to produce enough biodiesel? I don’t know.

The way I see it is we have two possible energy sources for transportation in the future, burning a fuel for heat or using a fuel to create electricity. Today, each has at least one piece of the supply chain that is too expensive.

Burning a fuel: About as good as it is going to get. Mechanically, fundamentally inefficient and it’s not likely to get any better while using internal combustion engines (ICE). Note that hybrids get better gas mileage not by improving the ICE by that much but from recapturing lost energy using regenerative braking and by using an electrical motor at low speeds.

Electricity: Converting electricity to mechanical work is about as efficient as we can get. Delivering the electricity is a mature technology (while it can be improved, it works ok for now). Where we lack is efficiently creating electricity via some method that doesn’t involve fossil fuels, storing enough portable electricity (i.e. batteries or capacitors), and charging said storage fast enough so that we don’t wait for hours at each filling station.

Unfortunately, right now hydrogen is expensive to make, store, and transport. It is at least as good as gasoline if we burn it for heat and it is good for creating electricity using fuel cells, but unfortunately fuel cells that create the electricity are super expensive right now. So, hydrogen as a transportation fuel has some serious hurtles to overcome.

Bottom line: If the ultimate goal of using hydrogen and fuel cells is to create electricity in order to drive electrical motors (and it is) then I believe by the time we solve all of the fuel cell and hydrogen issues, we will also have solved the electrical storage, recharge, and generation issues and we will be driving purely electrical cars instead of fuel cell cars.

In the meantime (back to your original question), we will probably see quite a mix of various chemical fuels (gasoline, diesel, biodiesel, and ethanol). All are a stop-gap measure (life span 30 to 40 years at best).

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Robin Hayden on May 2, 2006  · 

I agree with some of your views but I don’t believe biodeisel is a write off. It does not necesarilly have to bite into our food supply (pun intended).

See http://www.unh.edu/p2/biodiesel/article_alge.html for instance for one solution that proposes using algae grown in the desert. This not only leverages biodeisels most appealing environmental advantage (re-absorbing carbon from the atmosphere) it also contributes to greening of deserts that are generally speaking spreading.

Further more biodiesel does not require 600 million plus existing vehicles to be replaced which is both an economic advantage and an environmental one as metals and other natural resources most used in current production environments also suffer finite supply until we leave the planet or siginifcantly advance nanotechnology or other options. The energy requirement for completely re-engineering those 600 million plus vehicles is arguably an issue unto itself.

I think someone else here commented on other forms of biodeisel production such as the conversion of organic waste. Recent high temperature processes have solved some of the problems of turning ordinary food waste into fuel. This contributes to a culture of greater recycling which is both environmentally attractive and ultimately makes the whole system more efficient which is economically attractive.

Energy requirements are context sensitive. It doesn’t makes sense for instance to ship biodeisel to a green house in Iceland when local geothermal systems will do a much better job. So I believe wind, solar, wave, geothermal, “cleaner” coal, nuclear and various other technologies will probably all find their place in a more energy diverse future.

There are good arguments for maintaining one techology in place of 10 but they generally center around production efficiencies and focus of effort. These are strong arguments when you’re talking about very limited resources but the world has a population of over 6 billion and it’s now highly networked and industrialised so it could easily support several alternatives without negatively affecting either one.

In such environments it is better for the economy and for the environment for the most efficient technology to be applied to each situation. In the case of vehicle fuels at the moment biodeisel is the path of least resistence and is therefore the most economically viable and if developed sensibly it is also the most environmentally appealing.

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John Brown / Hybrid Cars on June 27, 2008  · 

Thanks for adding some measurements to your article.

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