Brazilian energy market

[whisper]

Interesting article:

Editorial Desk; SECTA
The Energy Harvest
By THOMAS L. FRIEDMAN
843 words
15 September 2006
The New York Times
Late Edition - Final
25
English
Copyright 2006 The New York Times Company. All Rights Reserved.

Sao Paulo, Brazil -- Any time that OPEC got a little too overzealous in pushing up oil prices back in the 1970's, the legendary Saudi oil minister Sheik Ahmed Zaki Yamani was fond of telling his colleagues: Remember, the Stone Age didn't end because we ran out of stones.

What he meant was that the Stone Age ended because people invented alternative tools. The oil age is also not going to end because we run out of oil. It will end because the price of oil goes so high that people invent alternatives. Mr. Yamani was warning his colleagues not to get too greedy and stimulate those alternatives.

Too late -- oil at $70 a barrel has done just that. One of the most promising of those alternatives is ethanol, an alcohol fuel made from corn, sugar cane or any biomass. I came to Brazil to try to better grasp what is real and what is not in the ethanol story, because no country has done more to pioneer sugar ethanol than Brazil.

My impression, after talking to a range of Brazilian experts, is that not only is ethanol for real, but we have not even begun to tap its full potential. With just a few technological breakthroughs, Brazil really could be the Saudi Arabia of sugar and we could actually achieve that energy dream of getting ''barrels from bushels.''

Since the 1970's oil shocks, Brazil has, with lots of trial and error, made ethanol part of its daily life. It hits you the minute you drive into a gas station in Sao Paulo, where you need two things: a credit card and a calculator. In rough numbers, sugar ethanol now sells here at a little over $2 a gallon and gasoline at a little more than $4 a gallon. Because sugar ethanol gets only about 70 percent of the mileage of gasoline, drivers here do the math each day and figure out if ethanol is at least 30 percent less than the price of gasoline. If it is, many will fill 'er up with sugar cane.
Brazilians have that luxury because there are 34,000 gas stations here that offer both gasoline and ethanol (compared with around 700 in the U.S.) and because 70 percent of new cars sold here can run on either gasoline or sugar ethanol. As a result, Brazil has replaced about 40 percent of its gasoline consumption with sugar ethanol.

I visited the Cosan sugar mill northwest of Sao Paulo, Brazil's largest, where you fly in over an ocean of green sugar cane. The cane is harvested onto big lorries and trucked to the Cosan distillery. There, the juice is extracted and converted to either crystal sugar or ethanol. The remaining cane waste -- called bagasse -- is used to fuel huge steam boilers that produce enough electricity to both power the refining process and leave a surplus to be sold back to the grid.
It's important to understand this process to appreciate just how ''much more energy we could get from sugar cane'' with just a few more breakthroughs, explained Plinio Mario Nastari, one of Brazil's top ethanol consults.

Think of each stalk of sugar cane as containing three sources of energy. First, the juice extracted from the cane is already giving us ethanol and sugar. Second, the bagasse is already heating very low-technology, low-pressure boilers, giving us electricity. But if Brazil's refiners converted to new high-pressure boilers, you could get three times as much electricity.
Finally, when the cane is harvested the tops and leaves are often just left in the field. But this biomass is rich in cellulose, the carbohydrate that makes up the walls of plant cells. If the sugar locked away in cellulose also could be unlocked -- cheaply and easily by a chemical process -- this biomass could also produce tons of sugar ethanol. There is now a race on to find that process.

A breakthrough is expected within five years, and when that happens it will be possible to extract ''more than double'' the amount of ethanol from each sugar stalk, said Jose Luiz Oliverio, a senior V.P. at Dedini, the Brazilian industrial giant, which has a pilot cellulosic ethanol project.
I asked Brazilian experts what they'd do if they were the U.S. president. The consensus answer: Require U.S. oil companies to provide ethanol fuel pumps at all their gas stations, require U.S. auto companies to make all their new cars flex-fuel and improve mileage standards, and get rid of the crazy 54-cent tariff we've imposed on imported sugar ethanol (to protect our farmers). And then let the market work.

Demand for ethanol would soar. This would push us faster down the innovation curve, so we'd solve the cellulosic ethanol problem quicker, and that would strengthen the democrats in our hemisphere and weaken the petrocrats in the Middle East. If only we were as smart as Brazil

On a different note, this maxim: "Remember, the Stone Age didn't end because we ran out of stones." I think is brilliant.

[Ronald Reagan]

Come on, we all know drilling another hole will solve all energy problems.

We're going to be sending someone to re-eductate you on this matter shortly.

[whisper]

Originally Posted by Ronald Reagan

Come on, we all know drilling another hole will solve all energy problems.

We're going to be sending someone to re-eductate you on this matter shortly.

Do I get to choose where to drill the next hole?

[krank]

Originally Posted by whisper

Do I get to choose where to drill the next hole?

get a room

[fallout]

Originally Posted by whisper

On a different note, this maxim: "Remember, the Stone Age didn't end because we ran out of stones." I think is brilliant.

I really like that.

[HangerAngler]

Originally Posted by whisper

Interesting article:

...

The Brazilian expert says the US gov't should:
-fiddle with the market this way
-fiddle with the market this other way
-then let the market work

[SamTheEagle]

Originally Posted by HangerAngler

The Brazilian expert says the US gov't should:
-fiddle with the market this way
-fiddle with the market this other way
-then let the market work

I'm sure there's no self interest involved.

[HangerAngler]

Originally Posted by SamTheEagle

I'm sure there's no self interest involved.

You're probably right. I'm ok with it then.

[Ronald Reagan]

Originally Posted by HangerAngler

The Brazilian expert says the US gov't should:
-fiddle with the market this way
-fiddle with the market this other way
-then let the market work

I'm sure this is a totally free market now, right? No gov regulations or interference in the energy market yet, right?

[SamTheEagle]

Originally Posted by Ronald Reagan

I'm sure this is a totally free market now, right? No gov regulations or interference in the energy market yet, right?