We've used ethanol as an additive in AZ (up to 10%) in summer months to meet EPA air pollution standards. Brazillian ethanol costs (conservatively) less than $1.50/gal to produce, but transport raises the price to the US and elsewhere. Nonetheless, at current gasoline prices it's very competitive, and could be used at 10% concentration without significant pump or engine modifications. We burn something like 4.7 million bbls of gasoline/day, so that's still potentially 470K bbls of ethanol/dy (currently 170K bbls of blended etoh is used) ...6 BILLION gallons/year.
tonto.eia.doe.gov
Cosan produced only about 300 million gallons of EtOH last year, so there's potentially lots of room for growth. That can be done all at lower cost than we're paying now at the pump if the tariff is lifted. It would be relatively easy to supply Gulf Coast refineries, avoiding pipelines. Ethanol is used in Brazil not because it's subsidized, but because its cheap. Even using E10 we get a huge benefit, and eliminate the need for a few hundred thousand bbls of gasoline/day. And reduce food prices in the US in the bargain. It's a no brainer (however Clowngress of late has shown the have no brains, so who knows what will happen).
And if none of this comes to pass (as you say) their domestic and regional markets are growing nicely in their own right, and will be a huge and growing market for decades to come. |
