Brazil offers model for ethanol success
Tuesday, May 17, 2005
Printable FormatBy Bill Lambrecht
St. Louis Post-Dispatch
SAO PAULO, Brazil - It is fitting that Brazil's sugar mills turn out both
ethanol for fuel and cane liquor for drinking, because Brazilians like to toast
the success of their ethanol industry.
Brazil has long been the world leader in ethanol production, thanks to policies
that date back to the 1970s. While quadrupling its ethanol exports last year,
Brazil even sent 90 million gallons to the United States, where the industry
has been heavily subsidized for two decades in an effort to make it profitable.
With oil prices rising everywhere, Brazilian motorists rejoice at being able to
fill up their autos on 100 percent ethanol, selling recently at half the price
of gasoline. Even Brazilian gasoline is blended with 25 percent ethanol.
Now, some in the United States are saying Americans would do well to copy the
Brazilian model.
Brazil's abundance of land, sunshine and rain make it ideal for sugar cane.
Cheap labor adds to the profitability of ethanol; Brazil is said to even harbor
pockets of slave labor in remote Amazon areas.
But the prosperity of the Brazilian ethanol industry also can be attributed to
government policies that promote "flexible fuel vehicles" and make ethanol
widely available at the pump.
Roughly 28 percent of automobiles built in Brazil this year will carry an
engine-sensing device and other alterations enabling them to burn either 100
percent ethanol or the blend with 75 percent gas and 25 percent ethanol.
Every filling station offers both, and Brazilian motorists typically alternate
between pure ethanol and the blended gasoline to get the best mileage and
engine performance from their vehicles.
By contrast, fewer than 5 million vehicles on the road in the United States are
able to run on 85 percent ethanol - a mixture called E85. Motorists may not
even know their engine's dual fuel capacity, and if they do, they might find it
difficult or impossible to buy E85.
The debate over E85 use in the United States often is cast as a
chicken-and-egg question: Which comes first, plenty of automobiles with the
flexibility to use ethanol-rich fuel, or the places to buy it?
By many accounts, the U.S. program designed to promote E85 has fallen short of
its goals.
Under a law passed more than a decade ago to promote alternative fuels,
automakers are given credits for producing flexible fuel vehicles that count
toward federal fuel-efficiency standards.
As a result, motorists can choose from an array of passenger cars, sport
utility vehicles and trucks capable of using E85 or gasoline.
But finding E85 is a bigger challenge, part of the reason that environmental
advocates are critical of the program.
"It's a hoax on the public," argued Dan Becker, a Sierra Club analyst in
Washington.
Environmentalists have mixed opinions about ethanol to begin with, noting
studies showing that it can worsen smog (while cutting down on carbon monoxide
pollution). But Becker said his organization is especially concerned because
the E85 credit has enabled automakers to build more gas-guzzling vehicles and
fewer that are efficient when burning gasoline.
Monte Shaw, spokesman for the ethanol industry's Renewable Fuels Association in
Washington, said Brazil has set an example worthy of being copied.
"What we can learn from Brazil is if there's a good fuel source and you have
the option of the cars, consumers are excited about it. If there was an E85
pump at every gas station in America, you would see people all over using it,"
he said.
Sen. Barack Obama, D-Ill., is among the senators trying to promote ethanol made
from corn by increasing the availability of E85. An amendment Obama
successfully attached to the highway bill pending in the Senate would give
filling station operators credits of up to $30,000 for installing pumps with
the 85 percent ethanol blend.
Still another amendment attached to the highway bill aims to tell people
something they might not have heard from their carmaker - that they own a
flexible fuel vehicle. This amendment, sponsored by Sen. Mark Dayton, D-Minn.,
would require that labels declaring the E85 capability be placed next to the
gas cap inside the fuel-loading door.
In the past, provisions that promote ethanol - and so diminish the use of
gasoline - have been derailed by members of Congress from oil-producing states.
But Robert Gibbs, spokesman for Obama, said he believes times have changed.
"We think there's a broad enough coalition, not just of Midwestern senators who
can see the benefits of ethanol but also their colleagues from elsewhere who
are hearing complaints from constituents about the price of gas," he said.
Brazilian confidence
Limits have been imposed on how much ethanol Brazil can import to the United
States, and American ethanol manufacturers should be glad, considering Brazil's
booming sugar cane business.
Brazil produces its ethanol so cheaply that on occasion it is able to export it
to the United States and make a profit despite the 54-cent-per-gallon subsidy
received by U.S. producers.
But under terms of the Caribbean Basin Initiative, a trade treaty, Brazil can't
send more ethanol to the U.S. than an amount equal to 7 percent of the U.S.
production in the previous year.
Sen. Charles Grassley, R-Iowa, has led an effort in Congress to freeze Brazil's
import rather than letting it expand with U.S. production.
Brazilians insist that their strategy is expanding markets worldwide rather
than competing with the United States.
William Burnquist is a spokesman for Brazil's Sugarcane Technology Institute,
in Piracicaba, Brazil. He said he believes that Brazil will need to expand its
acres of sugar cane by one-third - to 20 million acres - by 2010 to keep up
with growing demand.
U.S. ethanol production is expected to increase to a record 4 billion gallons
this year, and American industry officials claim that they will surpass Brazil
before long.
But Brazilians insist they are unconcerned and that they are happy to see
demand increase around the world.
At the Usina Sao Martinho sugar and alcohol mill in Pradapolis, Monika
Bergamaschi, who heads a regional agribusiness association, offered a smile
that suggests confidence about Brazil's future in a global industry that it
pioneered.
"We know it's more expensive to make there. We don't want to frighten people
because we need partners. We have all the problems of a developing country and
we need partners because we are growing," she said, speaking of new markets
around the world.
In Brazil
Motorists have a choice: gasoline, or ethanol made from sugar cane. Roughly 28
percent of automobiles built in Brazil this year can use either 100 percent
ethanol or the blend with 75 percent gas and 25 percent ethanol.
In the United States
Few gas stations offer fuel with a high percentage of ethanol made from corn.
Fewer than 5 million vehicles are able to run on 85 percent ethanol - a mixture
called E85.