Jason Barton

Professional Information and Energy News

Archive for the ‘Ethanol’ Category

EPA Proposes Increased Bureaucracy

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Is this proposed legislation going to improve working conditions or environmental impact at sugarcane and ethanol production facilities, or is it just more paperwork? I’ve written extensively on this site and in my doctoral dissertation about these issues, as well double fuel pumpsas related policies, but it’s not clear the intent of the proposed legislation. Whatever it is, demand for imported ethanol has taken various swings over the last few years, not due to natural factors, but due to the EPA’s decisions.

When the US EPA allowed Brazilian sugarcane ethanol to meet the “advanced biofuels” requirement in 2010, it certified, according to their analysis, that cane ethanol reduces greenhouse gas (GHG) emissions by at least 50% (61%) over traditional, petroleum gasoline. This comes after much debate regarding the actual GHG emissions from sugarcane, corn, and cellulosic ethanol.

When the EPA made their decision on this debate, it significantly increased demand for Brazilian cane ethanol as US refiners worked to meet the advanced biofuel mandate. The EPA, however, lowered the volume on this mandate due to lagging development of domestic, cellulosic ethanol that would also satisfy the advanced mandate.

Now, according to the article below, that increased demand could be dampened, and the number of producers reduced to only the largest players, as meeting the new reporting requirements increases transactions costs. Policy fluctuations like these have made it very difficult for investors in Brazil since the prices they earn for their product are not subject to natural factors of supply and demand, but due to the whims of bureaucrats in Washington.

Reuters

 

 

 

By Cezary Podkul

NEW YORK, July 12 | Fri Jul 12, 2013 10:13pm BST

 

(Reuters) – Importing cheap Brazilian ethanol into the United States could become much less profitable next year if a proposal by the Environmental Protection Agency to expand tough documentation and transportation rules to non-U.S. producers takes effect.

The proposal, made on June 14, could seriously disrupt a signature Latin American energy trade, triggering auditing, documentation and transportation requirements, including physically separating U.S. ethanol imports from each other until those requirements are met.

Read the entire article here.

 

 

Ethanol Mills in the Amazon?

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It’s true that ethanol mills have the potential to protect forests, particularly in the Amazon region where cane producers are required by law to leave 75-80% of each plot of land forested. The question is whether or not these laws will be observed and enforced.

The Brazilian Forest Code mandates that agricultural producers do not plant crops on 75% of their land, and also leave riparian corridors and other sensitive areas fallow. These laws have traditionally not been enforced, however, as they risk causing production costs to rise, making Brazilian agricultural products uncompetitive.

Yes, ethanol production in the Amazon can create jobs, protect forests, and reduce petroleum consumption, all while localizing energy production for people who would use the fuel there in the Amazon where the cane is grown and the ethanol is milled. It will take vigilance by Brazilian citizens and media to ensure these laws are followed if this expansion of cane and ethanol production is to occur.

Reuters

Brazil Bill Seeks to Open Amazon to New Ethanol Mills

Tue, Jun 04 13:01 PM EDT

* Investors say ethanol production in Amazon economically viable

* Environmentalists fear pressure on land use

By Reese Ewing

SAO PAULO, June 4 (Reuters) – Brazil plans to vote on a bill in the coming weeks to reopen large areas of the Amazon to sugar cane mills, rekindling fears that ethanol production could accelerate deforestation and create a major marketing challenge for the country’s biofuels industry.

Environmentalists are concerned Congress’ vote could overturn a ban on cane expansion in the region that went into place in 2009 and increase pressure on land use in areas that amount to nearly a third of the broader Amazon region in Brazil.

Meanwhile, the expansion into the environmentally sensitive areas could hurt ethanol producers’ plans to open new export markets, economists say.

Read the entire article here.

Cooperation on Biofuels Increasing between Brazil and US

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With the US ending both the tariff on imported ethanol and the tax credit for domestic blenders, cooperation between the US and Brazil on biofuel technology is increasing, as well as efforts to trade renewable fuels on global markets. (See my post at the end of last year)

Yes, we need to be ever vigilant on the possible effects of increased biofuel production on food availability and prices as well as on land use, soil and water quality, and related issues. In my doctoral dissertation, however, I examined these issues in depth and contend that increased production can occur along with protection of ecological health.

The cooperation discussed in the article below can lead to greater efficiency of renewable fuel production, using less land and less water to produce more fuel.

Energy is fundamental to economic growth, and as countries in Latin America and Africa increase their ability to produce renewable energy domestically, they create more jobs and better the lives of their people in ways that will improve economic as well as environmental conditions for generations. These are undoubtedly positive.

It is a fascinating time to be alive.

Insight: U.S. and Brazil – At last, friends on ethanol

A gas station worker fills a car's tank with ethanol in Rio de Janeiro April 30, 2008. Brazil is the world's largest producer and exporter of ethanol. REUTERS/Sergio Moraes

By Brian Winter

BRASILIA | Fri Sep 14, 2012 11:21pm IST

(Reuters) – After years at each other’s throats, Brazil and the United States are working together to promote the use of ethanol in a collaboration that could revolutionize global markets and the makeup of the biofuel itself.

The breakthrough came in January when Washington allowed a three-decade-old subsidy for U.S. ethanol producers to expire and ended a steep tariff on foreign biofuels. The tariff, in particular, had poisoned diplomatic relations between the world’s top two ethanol-producing countries for years.

Continue reading this article here.