To: Snowshoe who wrote (63986 ) 5/20/2005 7:26:19 AM From: elmatador Read Replies (1) | Respond to of 74559 Brazil offers model for ethanol success Brazil has long been the world leader in ethanol production, thanks to policies that date back to the 1970s. BY BILL LAMBRECHT St. Louis Post-Dispatch SAO PAULO, Brazil - (KRT) - It is fitting that Brazil's sugar mills turn out both ethanol for fuel and cane liquor for drinking because Brazilians like to toast the success of their ethanol industry. Brazil has long been the world leader in ethanol production, thanks to policies that date back to the 1970s. While quadrupling its ethanol exports last year, Brazil even sent 90 million gallons to the United States, where the industry has been heavily subsidized for two decades in an effort to make it profitable. With oil prices rising everywhere, Brazilians motorists rejoice at being able to fill up their autos on 100 percent ethanol, selling recently at half the price of gasoline. Even Brazilian gasoline is blended with 25 percent ethanol. Now, some in the United States are saying Americans would do well to copy the Brazilian model. Brazil's abundance of land, sunshine and rain make it ideal for sugar cane. Cheap labor adds to the profitability of ethanol; Brazil is said to even harbor pockets of slave labor in remote Amazon areas. But the prosperity of the Brazilian ethanol industry also can be attributed to government policies that promote "flexible fuel vehicles" and make ethanol widely available at the pump. Roughly 28 percent of automobiles built in Brazil this year will carry an engine-sensing device and other alterations enabling them to burn either 100 percent ethanol or the blend with 75 percent gas and 25 percent ethanol. Every filling station offers both, and Brazilian motorists typically alternate between pure alcohol and the blended gasoline to get the best mileage and engine performance from their vehicles. By contrast, fewer than 5 million vehicles on the road in the United States are able to run on 85 percent ethanol - a mixture called E85. Motorists may not even know their engine's dual fuel capacity, and if they do, they might find it difficult or impossible to buy E85. The debate over E85 use in the United States often is cast as a chicken-and-egg question: Which comes first, plenty of automobiles with the flexibility to use ethanol-rich fuel, or the places to buy it? By many accounts, the U.S. program designed to promote E85 has fallen short of its goals. Under a law passed more than a decade ago to promote alternative fuels, automakers are given credits for producing flexible fuel vehicles that count toward federal fuel-efficiency standards. As a result, motorists can choose from an array of passenger cars, SUVs and trucks capable of using E85 or gasoline. But finding E85 is a bigger challenge, part of the reason that environmental advocates are critical of the program. "It's a hoax on the public," argued Dan Becker, a Sierra Club analyst in Washington. Environmentalists have mixed opinions about ethanol to begin with, noting studies that show that it can worsen smog (while cutting down on carbon monoxide pollution.) But Becker said his organization is especially concerned because the E85 credit has enabled automakers to build more gas-guzzling vehicles and fewer that are efficient when burning gasoline. Monte Shaw, spokesman for the ethanol industry's Renewable Fuels Association in Washington, said Brazil has set an example worthy of being copied. "What we can learn from Brazil is if there's a good fuel source and you have the option of the cars, consumers are excited about it. If there was an E85 pump at every gas station in America, you would see people all over using it," he said. Limits have been imposed on how much ethanol Brazil can import to the United States, and American ethanol manufacturers should be glad, considering Brazil's booming sugar cane business. Brazil produces its ethanol so cheaply that on occasion it is able to export it to the United States and make a profit despite the 54-cent per gallon subsidy received by U.S. producers. But under terms of the Caribbean Basin Initiative, a trade treaty, Brazil can't send more ethanol to the United States than an amount equal to 7 percent of the U.S. production in the previous year. Sen. Charles Grassley, R-Iowa, has led an effort in Congress to freeze Brazil's import rather than letting it expand with U.S. production. Brazilians insist that their strategy is expanding markets worldwide rather than competing with the United States. William Burnquist is a spokesman for Brazil's Sugarcane Technology Institute, in Piracicaba, Brazil. He said he believes that Brazil will need to expand its acre of sugar cane by one-third - to 20 million acres - by 2010 to keep up with growing demand. U.S. ethanol production is expected to increase to a record 4 billion gallons this year and American industry officials claim that they will surpass Brazil before long. But Brazilians insist they are unconcerned and that they are happy to see demand increase around the world. At the Usina Sao Martinho sugar and alcohol mill in Pradapolis, Monika Bergamaschi, who heads a regional agribusiness association, offered a smile that suggests confidence about the Brazil's future in an global industry that it pioneered. "We know it's more expensive to make there. We don't want to frighten people because we need partners. We have all the problems of a developing country and we need partners because we are growing," she said, speaking of new markets around the world.