Ethanol Deal with Brazil
The Bush Administration signed an agreement with Brazil (which also signed an agreement with Japan last week) on standardizing ethanol definitions and pledging an alliance on technological developments related to ethanol production. Combined, the U.S. and Brazil produce 70% of the world’s ethanol, with the U.S. producing about 18 billion liters per year and Brazil 17 billion. Brazil gets its ethanol from sugar cane and is able to do it cheaper than the U.S. To protect corn farmers, Brazilian ethanol has a 54 cent/gallon U.S. tariff at least through 2009. If the United States is to decrease gasoline consumption by 20% in ten years, a goal put forth by Bush earlier this year, that would require 132 billion liters of ethanol if there are not simultaneous savings through efficiency or using Hydrogen, for example. Even with Brazil’s current rate of expanding ethanol production of a new plant every month for the next six years, that only increases their number of plants by about 25%.
My favorite story on the signing of the cooperation agreement between Brazil and the U.S. is this one from ABC News Online, where, quoting Bush, they couldn’t resist the temptation to point out his misuse of English with the editorial “sic”:
“We all feel incumbent (sic) to be good stewards of the environment - and it just so happens that ethanol and biodiesel will help improve the quality of the environment in our respective companies and so I’m very much in favour of promoting the technologies that will allow ethanol an biodiesel to remain competitive,” he said.
I also liked Bush’s incisive grasp of the fundamentals of the problem exemplified in this statement: “As we diversify away from the use of gasolene by using ethanol we’re really diversifying away from oil.” Really! Gasoline comes from oil?
The spelling of gasoline above is the Australian spelling since this was quoted on the Australian ABC News Online web site.