The Future Of Ethanol  

CommonDreams has a good article up on the Brazilian biofuels industry.

Want to see the potential of biofuels? Visit Brazil, as I did a few weeks ago.

In Brazil, by law, all gasoline contains a minimum of 25 percent alcohol. Yet ethanol is so popular it actually accounts for 40 percent of all vehicle fuel. By 2007, 100 percent of all new Brazilian cars may be able to run on 100 percent ethanol. Brazilian sugar-cane-fed biorefineries will be capable of producing sufficient ethanol to allow the entire fleet, new and old cars alike, to do so.

In Brazil, ethanol is now being used in aviation. Small planes, like crop dusters, are switching to ethanol because it is a superior fuel and is more widely available, even in remote parts of the country, than conventional aviation fuel.

Its stunning success with ethanol has encouraged Brazil to begin displacing diesel fuel with vegetable oils from its vast soybean crop. Within 15 years it expects to substitute biodiesel for 20 percent of its conventional diesel.

One more detail. Back in the mid 1990s, Brazil ended its ethanol subsidies. Nevertheless, with world oil prices hovering around $55 a barrel, the price of ethanol today is only half that of gasoline. Since its inception, Brazil's ethanol program has displaced imported oil worth $120 billion.

Its quite amazing how much success the Brazilians have been having - if they can afford to produce (unsubsidised) ethanol that sells for half the price of petrol, then you'd have to conclude that the EROEI for sugar cane based ethanol must be pretty good (even if that of ethanol produced from north american corn may be debatable).

This raises the question of why ethanol has fared so poorly in Australia ? We have lots of sugar cane, and its not particularly valuable given the low prices and trade barriers faced by the sugar industry.

Australian ethanol has only made the news on a few occasions that I can remember - firstly as a minor scandal involving the rodent handing out subsidies to his mate Dick Honan at local ethanol monopoly Manildra (while slapping on a sudden excise to prevent Brazilian ethanol being imported), then later with a fear-mongering campaign being conducted suggesting the use of ethanol in car engines is causing them damage (presumably conducted by the oil companies).

Manildra as a company isn't doing well, and according to this article Australian produced ethanol costs around twice as much to produce as petrol (the gap has probably narrowed as oil prices have risen) - so the obvious question is - why is Brazilian ethanol so much cheaper to produce the the local stuff ?

(the article also notes that sugar cane may not be the best feedstock for ehtanol proudction - Instead of wasting millions of dollars on industry handouts, to support an industry and technology that has proved ineffective, and dallying in pork-barreling and cronyism, the government should fund research and development into the production of ethanol from lignocellulosic materials. Lignocellulosic materials such as wood, crop residues, and municipal wastes, provide a large readily available supply of cheap feedstock that can be broken down and used for the production of ethanol. Research shows that the amount of ethanol yielded from lignocellulosic materials is much more than conventional sugarcane and wheat feedstocks.)

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