U.S. Seeks Partnership With Brazil on Ethanol
Countering Oil-Rich Venezuela Is Part of Aim
By Monte Reel
Brazilian industry leaders say the expanding demand for ethanol has resulted in a new understanding that Brazilian sugar growers and American corn growers are not competitors.
"Up to yesterday, we considered the U.S. corn growers our enemies, and they considered us their enemies," said Eduardo Pereira de Carvalho, president of Brazil's sugar cane growers union. "But we aren't enemies -- we're allies, independent of the tariff issue that has divided us. My government has said to me, 'Aren't you creating competition for us?' I say no."
If an agreement between the two countries is signed, both will likely share some of the technological advances each has been pursuing independently. The U.S. Energy Department last year opened two research centers to study how to better derive ethanol from cellulose material -- a development that could turn a wide variety of plants into fuel sources. Brazil, meanwhile, has been conducting similar research, and some in the industry believe pooling sources could lead to quicker breakthroughs.
But U.S. officials said the most valuable result of an alliance would be that it would encourage more countries to get involved in production and use of ethanol. This would create an internationally tradable commodity, much like oil is today, Burns said. That would lessen the power that oil has over the region, he said.
"If you boil down all the issues causing political instability in the region, many of them do come down to energy -- the expropriation of a petroleum company in Ecuador, Venezuela and its oil dominance, the nationalization of natural gas and other energy sources in Bolivia," said Dean, of the Interamerican Ethanol Commission. "So there clearly is a compelling need for an energy security regime."
According to Carvalho, the Brazilians are aware that such concerns -- particularly about Venezuela's oil influence -- have spurred talks of the ethanol partnership.
"Of that I have absolutely no doubt," he said.
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