Brazil Braces for Ethanol Glut

Robert Farago
by Robert Farago

In the growing war of words between bio-fuel producers and savvy environmentalists, pro-ethanol supporters often point to Brazil, claiming that the South American country's energy independence offers a template for America's future. Detractors already know that Brazil's booming ethanol production is based on geography (sugar cane rather than corn), takes a heavy toll on the [ideologically sacrosanct] rain forest and has little to do with the country's net energy consumption. And here's a new wrinkle. Energy Business Review says "Brazilian ethanol producers reportedly exported a majority of their fuels to Europe in 2007. Increased exports have saved Brazilian sugarcane producers from going bankrupt as sugarcane prices fell below the cost of production on commodity exchanges." This is a bitch because both the U.K. and Germany have recently "de-incentivized" bio-fuel consumption. And that means… "Brazilian ethanol exporters are pro-actively lobbying with common interest groups in the US, to help create a global market for ethanol." Energy independence be damned; what's the bet America's corn-fed politicians raise the barriers?

Robert Farago
Robert Farago

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  • 97escort 97escort on Apr 13, 2008

    I find it hard to understand where "savvy environmentalists" are going with their ant-ethanol argument. In a post peak oil world, what is going to power the vehicles TTAC spends its efforts on? Electricity? Give me a break. The grid can not support it and most electricity is produced from polluting fossil fuel. TTAC regularly chronicles the difficulties of Tesla for example. Even mighty Toyota struggles with a plug in version of the Prius. And GM? Who knows. News flash: The United States does not have the climate to produce sugar cane. It can produce corn and will whether is is used for ethanol or not. The other uses for corn are: animal feed which is an energy loser, export which is also an energy loser because corn sells for less the than its energy content compared to oil, and high fructose corn syrup which may be behind the epidemic of diabetes. Relatively little field corn grown in the U.S. is used directly for human food. It is called a coarse grain for that reason. The argument that ethanol will make the United States energy independent is a straw man argument put up by the anti ethanol crowd. Ethanol will never be more than about 10 percent of liquid fuel in the U.S.. But 10 percent is better than nothing and puts off for a few years the ultimate energy crunch which we are just starting to experience at the moment.

  • Donal Fagan Donal Fagan on Apr 13, 2008
    Just like how many angels one can fit on the head of a pin, the imponderable question here is how hydrocarbons can be both undiscovered and assessed as technically recoverable at the same time -- discounting, of course, considerations of economic viability. As any "hands on" insider in the oil & natural gas business will tell you, the only way to convert a resource from undiscovered to a proved reserve in this case is to get in a boat, load it with some equipment, go at least 100 miles off some OCS region, drill a test well and see what happens. As if to emphasize my point, this comes on the heels of the discovery that Mexico's huge 10 Gb (billion barrel) discovery in the Gulf turned out to be a dud once they actually drilled some test wells. Just as politics probably played a role in the Mexican case, it is apparently the same as regards DOER. My apologies for just stating the obvious.
  • Anonymous Anonymous on Apr 14, 2008

    I already understand the left is against drilling for oil and will do anything to prevent it. The result of preventing production of this oil is a shortage of oil and high price for gasoline among other things. There is oil being produced from thousands of offshore sites all around the world and it is very proven and successful, so I don't know if you are making the case there is no oil offshore or it is impossible to extract the oil. Either way you are wrong as shown by the success of the existing fields like the North Sea, Gulf of Mexico, Hibernia, etc.

  • Ptg Ptg on Aug 15, 2008

    bluecon & Donal Fagan - You are both overanalyzing this. We need to drill for oil because it is the most efficient way to obtain fuel (and plastics by-the-way). There are many other technologies that are already developed, just not as effecient. It does not make sense for the US to be energy independent using one of the more ineffecient technologies because it will make us less competitive globally.