Monday, August 21, 2006

Ordem e Progresso (e Ethanol)


The motto emblazoned on Brazil’s flags reads “Ordem e Progresso,” Portuguese for “order and progress,” which is exactly what the South American giant’s long-term focus on ethanol as an alternative fuel is producing.

Brazil recently declared that it was self-sufficient in oil thanks to its own mineral reserves and refining capacity, plus an additional card that it is uniquely positioned to play: heavy investment in an infrastructure for sugarcane-derived ethanol as a fuel.

Set aside Brazil’s reputation for gang violence, racial problems and steady destruction of its Amazon hinterlands for a moment to read “Brazil’s Road to Energy Independence.” It shows that Brazil’s long-term focus on energy independence has paid off:

The production of sugar cane-based ethanol is expected to reach an all-time high. And just three years after the introduction here of flex-fuel vehicles—cars that run on either ethanol or gasoline—several major automakers predict that such vehicles will represent 100 percent of their production by the end of the year, eliminating gas-only models.

Pull up to most service stations in this country of 185 million people and you will find fuel pumps offering three choices: ethanol, gasoline or premium gasoline. The labels are slightly misleading: The gasoline varieties are blends that contain at least 20 percent ethanol. The pure ethanol is usually significantly cheaper—53 cents per liter (about $2 per gallon), compared with about 99 cents per liter for gasoline ($3.74 per gallon) in Sao Paulo this past week.

"I buy gasoline only if I can't get anything else," said Alexandre Rigueirra, 28, a Sao Paulo taxi driver who modified his flex-fuel Chevrolet to also use natural gas, which is sold at many locations throughout the country. "Gasoline is always the last option."

Hey! Why aren’t those flex-fuel Chevys here in America’s heartland? Thanks to Iowa’s aggressive promotion of corn-based ethanol, I’m almost forced to put a gas-ethanol blend in my car each time I fill up; but unfortunately, corn-based ethanol is horrendously inefficient compared with ethanol derived from sugarcane, and there’s not enough of it in Iowa blends to really reduce the price per gallon.

Comparing sugar cane ethanol with corn-based fuel in terms of the reduction of carbon dioxide and greenhouse gases is one that Brazilians such as [Eduardo Pereira de Carvalho, president of Sao Paulo's sugarcane producers union] love to make. The ethanol extracted from corn yields only about 15 to 25 percent more fuel than the fossil fuels that were used to produce it. In Brazil, according to industry studies, the sugar-based ethanol yields about 830 percent more.

All kinds of high-level visitors are drawn to Brazil for its increasing hard and soft power (technological prowess + perceived commitment) in alternative fuels:

"It's amazing how sharply the level of interest in our experience here has jumped in recent months," said Eduardo Pereira de Carvalho. ... "We receive visiting politicians from the U.S., and we get invitations to speak to the Senate Foreign Relations Committee and to leaders of investment funds.”

Now for the good news for the U.S.:

... Many experts in all aspects of Brazil's industry agree that the future of ethanol resides neither in sugar nor corn, but in cellulosic ethanol, a biofuel that theoretically could be extracted from almost anything from switch grass to scrap paper. The United States is leading research into developing cellulosic technology, and the Energy Department this month announced it was dedicating $250 million for two new research centers dedicated to the cause.

Brazil has the lead in ethanol right now, thanks to the yanking of agricultural subsidies and the sugarcane industry’s resulting efficiency drive—plus some surprisingly forward thinking by generals who otherwise bungled their turn as Brazil’s rulers.

But the U.S. could regain its lead, some energy independence and a great deal of world respect through a friendly competition with Brazil to see who can crack the cellulosic code first—and then popularize the solution both at home and abroad.

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