Gene's Footnotes

I have never been impressed by the messenger and always inspect the message, which I now understand is not the norm. People prefer to filter out discordant information. As such, I am frequently confronted with, "Where did you hear that...." Well, here you go. If you want an email version, send me an email.

August 07, 2007

Maize sucré


I keep hearing that Brazilians all seem to be driving around with ethanol cars. This is a mass delusion fostered in the U.S. by dopes.
No, Brazil has been weaned from gasoline. Indeed, it is an oil producing country with big plans to attract more investment to pull up some that bubblin' crude.

I did a little homework and picked off from a Yale site:

As Brazil Fills Up on Ethanol, It Weans Off Energy Imports

RIO DE JANEIRO, Brazil -- After nearly three decades of work, Brazil has succeeded where much of the industrialized world has failed: It has developed a cost-effective alternative to gasoline. Along with new offshore oil discoveries, that's a big reason Brazil expects to become energy independent this year.

To see how, take a look at Gildo Ferreira, a 39-year-old real-estate executive, who pulled his VW Fox into a filling station one recent afternoon. Instead of reaching for the gasoline, he spent $29 to fill up his car on ethanol made from sugar cane, an option that's available at 29,000 gas stations from Rio to the Amazon. A comparable tank of gasoline would have cost him $36. "It's cheaper and it's made here in Brazil," Mr. Ferreira says of ethanol. If the price of oil stays at current levels, he can expect to save about $350 a year.

[Saving at the Pump]

At current prices, Brazil can make ethanol for about $1 a gallon, according to the World Bank. That compares with the international price of gasoline of about $1.50 a gallon. Even though ethanol gets less mileage than gasoline, in Brazil it's still cheaper per mile driven. As a result, ethanol now accounts for as much as 20% of Brazil's transport fuel market. The country's use of gasoline has actually declined since the late 1970s. The use of alternative fuels in the rest of the world is a scant 1%.


The critical thing to note is ethanol is "as much as 20% of Brazil's transport fuel market." That is great, but not to be confused with 100%.

But, wait, there is more. Brazil is a major oil producer.

"Brazil is on its way to becoming one of the main international poles for the exploration and production of petroleum," the World Petroleum Council projected in April 2002. "According to data supplied by Brazil's National Oil Industry Organisation (Onip), over the coming ten years the domestic petroleum industry ought to take a significant share of the sector's international investments, or roughly US$ 100 billion, 85 per cent of which [is] to be applied in the oil segment."
Some of the green crowd cannot see the reality. Ethanol is helping and the economy is very much oil based. Indeed, the local oil production helps keep the gas prices down, which helps the farmers make sugar. Things are always more complicated than we want.

Word is that there is an energy problem, now, in Brazil which the country seems to be thinking is caused by a non-market approach to distributing resources, especially electricity.

To highlight how Brazil is not a sugar cane nation, Here is a BBC report from 2000, see photo above.
The state oil company in Brazil, Petrobras, says it has contained a massive oil spill that has polluted the southern Iguacu River.

On Sunday, four million litres of crude oil escaped from a burst pipeline into the river making it the biggest oil spill in 25 years.

A Petrobras statement said the spillage was brought under control by installing a number of floating barriers and other equipment at eight key points on the river....

One of Brazil's advantages in the creation of ethanol is the use of sugar as the carbohydrate base, a lower wage base, and not much interest in the environment. As some in the U.S. are finally coming to understand, there is no way corn can be an option, unless every farm acre in the U.S. is dedicated to car corn. Right now, it costs us $6.50 a gallon to make ethanol, thanks to taxpayer subsidies.

I guess the point is we need to stop making believe there is a magic bullet avilable somethwere else. We need to do the hard work. Sorry.



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