Jason Barton

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Archive for the ‘Brazilian Ethanol’ tag

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.

 

 

Imports of Brazilian Ethanol Nearer as US May End Subsidies

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Just as the US Congress debates whether or not to end subsidies to corn ethanol, Royal Dutch Shell invests heavily in preparations to export Brazilian ethanol to the US.

July 10, 2011 4:37 pm

Shell to focus on exporting ethanol to US

Royal Dutch Shell is gearing up to become the biggest exporter of ethanol to the US, investing heavily in its joint venture in Brazil as global oil companies battle for control of the Latin American country’s sugarcane fields.

Under pressure to reduce the US deficit, lawmakers in Washington are preparing to scrap ethanol subsidies and tariffs – a move that would open up the country to cheaper imports while putting the spotlight on Brazil as the world’s only other leading producer of the biofuel.

[…]

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“The tariffs will be lifted; it’s just a question of when. That’s why we need to increase production of ethanol quickly,” Vasco Dias, Raízen’s chief executive said in an interview with the Financial Times.

“Our main priority now is to supply the internal market but our ambition is to become a big exporter of ethanol to the US when the time comes, and also to Europe.”

Read the entire article here.

Written by Jason

July 13th, 2011 at 10:39 pm

BP Chief Says Brazilian Ethanol is Best Bet to Replace Petroleum

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There is definitely substantial agricultural land for much more fuel, fiber, and food production in Brazil, as well as preservation of forests and even reforestation, but the headline seems quite an overstatement of the facts.

My PhD research has investigated the potential for Brazil to supply enough ethanol for the U.S. Renewable Fuel Standards, which may have renewables accounting for as much as 20% of our transportation fuels in 2022. There does appear to be sufficient arable land for both Brazilian demand as well as to supply the U.S. for these renewable mandates signed into law by George Bush in 2007.

To say there is enough land to replace all petroleum globally, however, especially considering the booming demand in China and India as their economies expand and have more people driving cars, is a stretch, to say the least.

Between the typos, the outdated photo, and the lack of background research for the article below, I’m wondering where to send my resume for a job at the Telegraph.

Brazilian ethanol is the best hope for replacing oil, says BP’s Bob Dudley

Ethanol derived from Brazilian sugar-cane offers the best hope of replacing oil as the world’s main source of fuel when it runs out, according to Bob Dudley, BP’s chief executive.

Brazilian ethanol is the best hope for replacing oil, says BP's Bob Dudley

By Robin Yapp, in Sao Paulo 7:03PM GMT 13 Feb 2011

He said Brazilian ethanol is the “best type of renewable energy” and offers the possibility of an “ultrapotent fuel that could revolutionise the market”.

“The alcohol extracted from sugar cane is cheaper, less polluting and more efficient than that from corn, for example, produced in the US.

BP is channelling its research into renewable fuels accordingly, with 40pc of its $1bn (£625m) annual spend in this area targeted at Brazilian ethanol, Mr Dudley told the weekly Brazilian news magazine Veja.

“There will obviously a time when the oil runs out and with this prospect on the horizon, we will use more renewable energy sources,” he said.

Read the entire article here.

Written by Jason

February 17th, 2011 at 9:55 pm

Shell Goes All In with Brazilian Ethanol

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First Shell suspends all of its renewable energy efforts except for Brazilian ethanol, and then BP’s chief comes out and says that Brazilian ethanol is the best bet to replace petroleum.

Maybe I’ve missed it, but I haven’t heard anything like this of corn ethanol. Funny.

Cosan, Shell give details on ethanol joint venture

Feb 15, 2011 2:31 AM MT

AMSTERDAM (AP) — Brazilian oil company Cosan SA and Europe’s Royal Dutch Shell PLC say their new ethanol joint venture will have an estimated market value of $12 billion, ranking as Brazil’s 5th-largest company by sales, with 40,000 employees.

When the deal was announced in August, Shell had dropped all other investments in renewable energy to focus on ethanol.

Read the entire article here.

Written by Jason

February 15th, 2011 at 8:15 pm

Educational Gaps Limit Brazil’s Reach

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This is probably the most important point that I took away from my doctoral research on the Brazilian bioenergy sector. It is in the midst of a market-led transition from its previous position as reliant on abundant, unskilled labor, to one that is much more mechanized and reliant on high technology.

This new approach relies on fewer laborers, but higher skill levels, as well as jobs that may more and are much safer. It’s not entirely or immediately positive, as with these new jobs that require greater education, there are fewer total jobs available. One tractor does the work of 80 field laborers, bringing with it another 20-30 jobs directly or indirectly.

Two developments are needed to make this transition as smooth as possible:

1. More jobs. The newer jobs are better, but what happens to the 50-60 field laborers who lose their jobs in Sao Paulo and return home to the Northeast, where President Lula was born, where there are few opportunities and rising problems associated with widespread unemployment and poverty?

2. More education. If Brazil is going to make the successful transition from commodities producer to producer of higher value, finished goods, it will need a much more highly educated and trained workforce.

From my own research, including interviews and surveys with people in Sao Paulo, and from the information in this article, it looks like many are aware of these problems and are dedicated to addressing them.

That’s great news.

André Vieira for The New York Times

A school in Caetés, Brazil, President Luiz Inácio Lula da Silva’s hometown.

By ALEXEI BARRIONUEVO
Published: September 4, 2010

CAETÉS, Brazil — When Luiz Inácio Lula da Silva was sworn in as Brazil’s president in early 2003, he emotionally declared that he had finally earned his “first diploma” by becoming president of the country.

One of Brazil’s least educated presidents — Mr. da Silva completed only the fourth grade — soon became one of its most beloved, lifting millions out of extreme poverty, stabilizing Brazil’s economy and earning near-legendary status both at home and abroad.

But while Mr. da Silva has overcome his humble beginnings, his country is still grappling with its own. Perhaps more than any other challenge facing Brazil today, education is a stumbling block in its bid to accelerate its economy and establish itself as one of the world’s most powerful nations, exposing a major weakness in its newfound armor.

Read the entire article here.

Written by Jason

September 6th, 2010 at 8:34 am

UNICA Continues Pressure on U.S. to Drop Ethanol Tariff

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To listen to UNICA, the powerful voice of Brazil’s sugarcane and ethanol industry, you’d think the U.S. tariff on imported ethanol would be gone by the end of the week. I don’t see that happening, and definitely don’t think an all-at-once elimination would be good for Brazil.

Ethanol accounts for half of their transportation fuel by volume (slightly less on an energy content basis), and if the U.S. tariff were eliminated, Brazilian producers would likely sell a huge portion of their ethanol to U.S. buyers, forcing Brazilian drivers to pay higher prices, or, more likely, revert to far more gasoline. This could jeopardize Brazil’s energy independence and would impact their balance of trade, though probably only slightly.

Additionally, just as UNICA and the studies they cite may sound certain that this tariff of US$0.54 per gallon is terrible for American drivers, its elimination would not hurt corn farmers, and so is soon to be history, U.S. corn farmers and our ethanol industry, led by Growth Energy, the U.S. counterpart to UNICA, are equally sure that government support is necessary and here to stay.

Let me be clear that I am not a fan of corn ethanol. I have become much more encouraged about cellulosic and other technologies on the near horizon, but still believe that corn is produced irresponsibly and at great harm to ecological, human, and even bovine health. I don’t blame farmers for this, as they are working within a system that rewards growing corn without taking into account the negative externalities.

All this said, the best scenario would likely be reducing the tariff on U.S. importation of Brazilian ethanol to meet the “advanced biofuels” mandates laid out in George Bush’s Renewable Fuels Standards, as allowed by the recent EPA findings in the RFS2 decision in February. This would gradually increase Brazilian ethanol’s presence in the U.S., while also encouraging the much needed move to second and third generation biofuels technologies, reducing our dependence on imported oil and increasing our energy independence and security.

Any of this, of course, must be done in concert with vastly increased efforts towards energy efficiency, driving less, more efficient vehicles, etc.

Here are a few of the pieces from UNICA…

Scholars call for phase-out of U.S. ethanol tariff at Wilson Center seminar
07/26/2010

(left to right) Joel Velasco, Alexandros Petersen, Paulo Sotero,
Robbin Johnson and C. Ford Runge

An open and globalized biofuels market is essential to promote greater efficiency and competitiveness, and phasing out the US$0,54 per gallon tariff imposed by the United States on imported ethanol would be a key step in the right direction. The recommendation came from two University of Minnesota scholars during the “Biofuels: Food, Fuel, and the Future?” panel, organized by the Woodrow Wilson Center in Washington, D.C, on Friday, July 23.

Read the entire article here.

And a second piece, citing the study from the University of Iowa:

Universidade americana vê ganhos para consumidores com fim de tarifa sobre etanol importado
26/07/2010

Em meio a um debate aquecido e ganhando cada vez mais visibilidade nos Estados Unidos, um estudo divulgado na terça-feira (20/07) por um renomado economista agrícola do meio-oeste americano está desafiando conclusões catastróficas, geralmente disseminadas por grupos de lobby do etanol de milho, sobre o que poderia acontecer se a atual tarifa de US$0,54 por galão (3,78 litros) imposta ao etanol importado expirar no final deste ano como planejado. O estudo, realizado por Bruce Babcock, chefe do Centro de Agricultura e Desenvolvimento Rural (CARD em inglês) da Universidade do Estado de Iowa, apresenta um cenário bem diferente.

Read the entire article here.

And the University of Iowa study to which they are referring:

CARD Study Shows U.S. Ethanol Production and Corn Demand Will Grow With or Without Subsidy and Tariff

Contacts:
Bruce A. Babcock ; babcock@iastate.edu
Sandy Clarke; sclarke@iastate.edu

July 20, 2010

America’s growing interest in renewable fuels has spurred a robust discussion about the pros and cons of continuing or changing current U.S. federal government ethanol policies, specifically, (1) mandates to increase the use of renewable fuels like ethanol from approximately 13 billion gallons today to 36 billion gallons by 2022, (2) a 45-cent-per-gallon tax credit for “blenders” who add ethanol to gasoline, and (3) a 54-cent-per-gallon tariff, which increases the price of foreign imports.

Read the entire article here.

Citizen Cane: Is biofuels’ future in the fields of Brazil, or the fields of home?

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It’s odd that we didn’t think much of these cane workers for the centuries when we were importing Brazilian sugar, when conditions were undoubtedly much, much worse than they are today. This has been a more common topic in the news of the last few years.

Mr. Lane proposes a series of cogent arguments why the U.S. should be more self-reliant in terms of our energy use, and some rather dubious ones on why we should not rely on Brazil and why we do not yet have a cellulosic biofuels industry here in the U.S.

Maybe it’s simply because of the age of information: now we have immediate access to the stories of people in rural areas on the other end of the globe, and the internet provides the space to tell those stories. Maybe it’s because, unlike the diminutive domestic sugar market, the burgeoning biofuels market and the already powerful corn lobby provide much stronger motivations to investigate the downsides of corn ethanol’s far more efficient competitor.

Having just returned from three months working with the cane industry in Sao Paulo, which produces 60% of their cane and ethanol, I can say that cane cutting is brutally difficult work, but work done by choice in a place where hundreds of thousands of people have no access to anything safer, smoother, or that pays better. They are not slaves; they are poor, without access to education, and without other options.

Perhaps an even more pressing set of questions is what will happen to these workers, and the Brazilian bioenergy market as a whole, as the sector becomes increasingly more mechanized and much more efficient over the next five years. These hundreds of thousands of workers will almost all lose their jobs, with one tractor replacing 80 workers. But it will also create another 15-25 jobs that pay better, require more training, and are much safer.

The increasing access to education for workers, information for cane producers and ethanol refineries, and the capital flowing into the sector from Brazil and abroad will help to streamline cane and ethanol production, shed light on best, and worst, practices, improving the industry and increasing yields per unit of land.

Many producers making the move to mechanization have not yet adopted the changed planting patterns or harvest practices that will increase their yields dramatically. The Sugarcane Technology Center (CTC) a private research firm in Sao Paulo whose associates produce the majority of Brazilian cane, is constantly at work investigating best practices and disseminating them across larger and smaller producers around the country’s center-south region.

This brings us back to why so many people advocate increased importation of Brazilian ethanol, and why we don’t have a cellulosic biofuels industry here in the U.S.:  Brazilian ethanol is much, much more efficient. In the Global Market that Mr. Lane describes, unlike the Global Village, price is king. Unlike U.S. corn, which is the recipient of enormous subsidies and is protected by a $0.54 per gallon tariff, Brazilian cane and ethanol compete on the free market, with drivers of flex fuel vehicles making a choice at the pump based on which is cheaper, ethanol or gasoline.

Our lack of a cellulosic industry is not because of “fear of the unknown,” but simply because of feasibility. Cellulosic ethanol cannot come close to competing with cane ethanol, nor with petroleum, so it does not have a presence in the market.

Yes, we should foster research and development in domestic energy, and biomass-based biofuels will likely play a part in our energy independence, along with nuclear and domestic petroleum and, most important of all, energy efficiency. We need to use less energy if we want any hope of achieving energy independence.

So while I agree with Mr. Lane’s premises, the difference is in the details. Let’s strive to nurture our own domestic energy markets, but let’s be honest about how and why we do it.

by Jim Lane

“Let me tell a story ‘bout a man named Jed /
a poor mountaineer barely kept his fam’ly fed…”

By now, if you are a devotee of vintage TV or over the age of 40, you may well be humming along to the theme song of The Beverly Hillbillies. The song told the story of how these comic hillfolk ended up owning a mansion in a swank part of Los Angeles, because of an oil strike on their land back home. It’s the dream of many of poor landowner for a long time now.

[…]

Cheap fuel! Cheap energy!

That’s what we want — or have wanted for a long, long time. Cheap fuel, and cheap food, and no questions asked.

So much of our cheap sugar comes from the cane fields of Brazil — for the Brazilians drove down the price with an efficiency that virtually extinguished the US sugarcane business. We don’t see the cane worker any more clearly than the Nigerian farmer.

We may tut-tut over reports of slavery in the industry when we see it flash across the Bloomberg Channel, or regret the conditions that every cane worker must experience, wielding a machete at high speed for hours, and days and years. The long years in the hot fields, the high prices in the company stores, the rude shacks used by the cane-workers — we might become agitated if we saw it, but we don’t see it, or rather we avert our minds rather than our eyes. It is the same with chicken farms or cattle feedlots — a 60 Minutes report might arouse our outrage for a day or two, and then we lapse into the old habit of taking the cheap price, and pushing inconvenient thoughts aside.

Read the entire article here.

Circling the wagons, the firing squads and the arguments: ethanol wars explode in print, TV

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Among many interesting topics to be discussed here is that UNICA is targeting more progressive outlets with their ads. While it’s fairly clear why progressives may not fall in line with big business in the corn belt, it’s not clear to me that they’ll be very excited about sugarcane ethanol from Brazil, given the rather negative press it’s sometimes received. This isn’t to say that that negative press is true, I’m just curious what more folks think.

Who's on which side, now?

The US corn ethanol industry has been up against it lately. For one, the meat and dairy industries have abandoned their alliance with corn for a partnership with environmentalists,. A second front opened when Brazilian and US ethanol interests split over the ethanol tariff.

The ethanol cold war developed into a hot one this week when television and print advertising campaigns debuted both from Brazil’s UNICA and the US-based Growth Energy.

The American Enterprise Institute’s Ken Green told the New York Times that there’s no mystery in the timing. “Senator Kerry is now saying that they’re going to have an energy bill in the next three weeks. [The ethanol lobbies] want to turn up the heat on what’s in this new energy bill and how it treats ethanol.”

[…]

The UNICA ads will appear, at least through this month, in Roll Call, National Journal, Congressional Quarterly and the website Politico, and will also feature a sponsorship campaign on public radio and the debut of a new sweeteralternative.com website. Total UNICA ad buys are “less than one-tenth” of the Growth Energy budget, according to UNICA’s estimate as quoted in the Times report.

Read the entire article here.

Iran Seeks Importation of Brazilian Ethanol

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How does Iran have a gasoline shortage? It’s likely that their drive to export petroleum, due to higher prices abroad than are available internally, has led to the domestic shortage. This is similar to what many people in Brazil fear: If the U.S. lowers our tariff on imported ethanol, Brazil will export too much and not have the capacity to meet domestic demand for a vehicle fleet that is currently powered by about 50% ethanol. Interesting.

Ethanol News

Brazzil Magazine reports that the Iranian government may import Brazilian ethanol to circumvent a U.S. trade blockade, as Iran is facing gasoline supply shortages.

The magazine cites Brazil’s minister of Development, Industry and Foreign Trade, Miguel Jorge, who reportedly led a trade delegation to the Middle East.

Jorge and the Iranian minister of Industry and Mines, Ali Akbar Mehrabian reportedly met Tuesday in Tehran, which included a meeting between Brazilian and Iranian executives.

BM reports that the purpose of the mission was to attract Iranian investment in Brazilian ethanol and agriculture.

Read the entire article here.

Written by Jason

April 16th, 2010 at 8:27 am

UNICA: 2009-10 Sugarcane Harvest Ends With 7.32% Growth

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Date Posted: April 13, 2010

Final numbers for the 2009/2010 harvest in the South-Central region of Brazil shows an increase of 7.32% in sugarcane crushing compared to the 2008/2009 harvest.

In all, 541.94 million tons of sugarcane were processed until March 31, 2010.

However, the start of the 2010/2011 harvest, which began officially on April 1st, has moved at a slower pace than expected, with only 6.81 million tons of cane crushed.

Read the entire article here.

Written by Jason

April 15th, 2010 at 8:36 am