August 20, 2006


Brazil's Road to Energy Independence: Alternative-Fuel Strategy, Rooted in Ethanol From Sugar Cane, Seen as Model (Monte Reel, 8/20/06, Washington Post)

Record oil prices have made the world's energy landscape a darkly foreboding place this year, inhospitable to optimism and celebration. Except in Brazil.

It has been something of a banner year here, full of milestones. The government predicts that for the first time in its history, Brazil will achieve energy equilibrium, exporting as much oil as it imports. 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. [...]

Since President Bush this year emphasized ethanol as one possible solution to U.S. oil dependence, Brazil has become a destination of choice for curious U.S. lawmakers and venture capitalists searching for a crystal ball in which to glimpse America's future. Ethanol is not solely responsible for Brazil's newfound energy independence -- domestic oil exploration has exploded in recent years -- but it has replaced about 40 percent of the country's gasoline consumption, according to Caio Carvalhal, an analyst with Cambridge Energy Research Associates in Rio de Janeiro.

"It's amazing how sharply the level of interest in our experience here has jumped in recent months," said Eduardo Pereira de Carvalho, president of Sao Paulo's sugar cane producers union. "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. They know that Brazil's ethanol program exists, but beyond that, most of them have very little information about our actual experience."

That experience has been a sometimes painful 30-year evolution, marked by plenty of foresight and numerous false starts. It was born of a uniquely Brazilian political and economic environment, but industry analysts say it nevertheless provides lessons for a fledgling U.S. ethanol program that is already on pace to dethrone Brazil's as the largest in the world.

Posted by Orrin Judd at August 20, 2006 11:10 AM

I get it! In Juddworld, we need to drive the third world road to "energy independence", but we can't fly there in third world airplanes.

Posted by: Raoul Ortega at August 20, 2006 1:33 PM

What's the acreage estimate needed to make a 5% dent in oil usage? How do you transport the stuff? What happens to prices w/o the subsidies? The ethanol craze is a government scam.

Posted by: Tom C.,Stamford.Ct. at August 20, 2006 2:04 PM

What happens to prices w/o the subsidies?

Complicated. Most studies suggest that it's cheaper and more efficient to get the stuff from sugar, but sugar has massive tariffs and import limits. (Okay, actually a complicated price floor that involves companies getting "loans" from the government using their sugar as collateral and then "forfeiting" it to pay for the loan at a set price floor if the market price falls below that price floor.)

Ethanol from corn is probably not efficient without subsidies. Ethanol from sugar might be, but not in the US with our current taxes on sugar and sugar-based ethanol.

Posted by: John Thacker at August 20, 2006 2:54 PM

As in all things, they're just aping us. Brazilians don't innovate.

Posted by: oj at August 20, 2006 3:50 PM

A lot of German/Jewish scientists escaped to South America? Why is it so impossible that Brazilians be innovative?

Posted by: erp at August 20, 2006 4:28 PM

Culture. Import engineers and they're innovative here. Leave them in China, Brazil, etc. and they aren't.

Posted by: oj at August 20, 2006 4:47 PM

What's the acreage estimate needed to make a 5% dent in oil usage?

Or at least, potentially none that are currently being used for agriculture:

"A biotech startup says its genetic engineering method could turn plants into cheap ethanol producers within five years." By Neil Savage February 22, 2006 Technology Review

[All emphasis added] [R. Michael Raab] is president and founder of Agrivida, a Cambridge, MA-based biotech startup. [...] For now, the company is focusing its efforts on corn, already a source of ethanol. But standard ethanol production uses just the kernels. Ethanol manufacturers process the kernels using enzymes that break down the starch into simple sugars. The sugars are then fed into a fermentation tank, where yeast digests them and produces ethanol. But in this process the corn stalks and leaves -- about half of the plant mass -- are thrown away. Using the whole plant would produce much more ethanol -- but the sugars in the stalks and leaves are in the form of cellulose, which is a much more complex chain of sugar molecules. [...]

Agrivida proposes to add genes to the corn plants that will produce enzymes for breaking down the cellulose. This makes it much easier to process the cellulose into sugar, reducing production costs to a point where it's feasible to use the whole plant, Raab says. He predicts the process will be about 50 percent cheaper than current processes once it matures. And it could be adapted to switchgrass, [a woody grass native to North America that can grow to nine feet tall in a single year]. [...]

A study at Argonne National Laboratory estimates that a gallon of ethanol produced from kernels of corn in today's processes provides about 20,000 BTUs more energy than the energy that went into making it. The study projects that using cellulose from switchgrass would triple that net gain, to about 60,000 BTUs per gallon, mostly because little fossil fuel would be used in farming the grass. [...] Raab says switchgrass is appealing; for one thing, an acre of land can produce four times the mass of switchgrass as of corn. And switchgrass is far hardier and easier to grow than corn. "The energy balance for ethanol from switchgrass is tremendously better," he says. "It doesn't require all the fertilizer, all the irrigation, all the energy intensity that corn does."

Scientists estimate that ethanol could replace about 30 percent of the demand for gasoline without affecting food production. Right now, ethanol, mixed with gasoline, accounts for only about 2 percent of fuel in U.S. cars. Switchgrass can be grown on marginal land that couldn't support food farming. And experiments have shown that an acre of land can produce from 6 to 15 tons of switchgrass, yielding about 100 gallons of ethanol per ton.

Posted by: Abner Hathaway at August 21, 2006 9:56 AM