The U.S. has a really stupid policy on sugar ethanol

[ema1970]

The U.S. has a really stupid policy on sugar ethanol
By Thomas Friedman

The New York Times

I asked Dr. Jose Goldemberg, secretary for the environment for São Paulo state and a pioneer of Brazil's ethanol industry, the obvious question: Is the fact that the U.S. has imposed a 54-cents-a-gallon tariff to prevent Americans from importing sugar ethanol from Brazil "just stupid or really stupid?"

Thanks to pressure from Midwest farmers and agribusinesses, who want to protect the U.S. corn ethanol industry from competition from Brazilian sugar ethanol, we have imposed a stiff tariff to keep it out. We do this even though Brazilian sugar ethanol provides eight times the energy of the fossil fuel used to make it, while American corn ethanol provides only 1.3 times the energy of the fossil fuel used to make it. We do this even though sugar ethanol reduces greenhouses gases more than corn ethanol. And we do this even though sugar cane ethanol can easily be grown in poor tropical countries in Africa or the Caribbean, and could actually help alleviate their poverty.

Yes, you read all this right. We tax imported sugar ethanol, which could finance our poor friends, but we don't tax imported crude oil, which definitely finances our rich enemies. We'd rather power anti-Americans with our energy purchases than promote anti-poverty.

"It's really stupid," answered Goldemberg.

If I seem upset about this, I am. Development and environmental experts have long searched for environmentally sustainable ways to alleviate rural poverty — especially for people who live in places like Brazil, where there is a constant temptation to log the Amazon. Sure, ecotourism and rain forest soap are nice, but they never really scale. As a result, rural people in Brazil are always tempted go back to logging or farming sensitive areas.

Ethanol from sugar cane could be a scalable, sustainable alternative — if we are smart and get rid of silly tariffs, and if Brazil is smart and starts thinking right now about how to expand its sugar cane biofuel industry without harming the environment.

The good news is that sugar cane doesn't require irrigation and can't grow in much of the Amazon, because it is too wet. So if the Brazilian sugar industry does realize its plan to grow from 15 million to 25 million acres over the next few years, it need not threaten the Amazon.

However, sugar cane farms are mostly in south-central Brazil, around São Paulo, and along the northeast coast, on land that was carved out of drier areas of the Atlantic rain forest, which has more different species of plants and animals per acre than the Amazon. Less than 7 percent of the total Atlantic rain forest remains — thanks to sugar, coffee, orange plantations and cattle grazing.

I flew in a helicopter over the region near São Paulo, and what I saw was not pretty: mansions being carved from forested hillsides near the city, rivers that have silted because of logging right down to the banks, and wide swaths of forest that have been cleared and will never return.

"It makes you weep," said Gustavo Fonseca, my traveling companion, a Brazilian and the executive vice president of Conservation International. "What I see here is a totally human-dominated system in which most of the biodiversity is gone."

As demand for sugar ethanol rises, and that is a good thing for Brazil and the developing world, said Fonseca, "we have to make sure that the expansion is done in a planned way."

Over the past five years, the Amazon has lost 7,700 square miles a year, most of it for cattle grazing, soybean farming and palm oil. A similar expansion for sugar ethanol could destroy the cerrado, the Brazilian savannah, another incredibly species-rich area, and the best place in Brazil to grow more sugar.

A proposal is floating around the Brazilian government for a major expansion of the sugar industry, far beyond even the industry's plans. No wonder environmental activists are holding a conference in Germany this fall about the impact of biofuels. I could see some groups one day calling for an ethanol boycott — a la genetically modified foods — if they feel biofuels are raping the environment.

We have the tools to resolve these conflicts. We can map the lands that need protection for their biodiversity or the environmental benefits they provide rural communities. But sugar farmers, governments and environmentalists need to sit down early — like now — to identify those lands and commit the money needed to protect them. Otherwise, we will have a fight over every acre, and sugar ethanol will never realize its potential. That would be really, really stupid.

Thomas Friedman is a New York Times columnist.

source : http://www.thinkfn.com/forum/viewtopic.php?t=8038


PS : i have a non profitable chat room http://chatshack.net/ema666 if you are alone go there.

[HenryTo]

Folks already having trouble in raising money to build more corn ethanol plants. rffrydr: are you doing anything in corn at the moment?
-----------------------------------------------
Ethanol Plant Plans Up In Air After Gas Prices Drop & Corn Prices Shoot Up

A Traverse City area company that wants to build an ethanol plant in Manistee County claims it could take longer than expected.

The plant is planned to be built in Filer Township which is just outside the Manistee city limits.

The developer has the township's approval and the land is being cleared, but Benjamin Brower of Star Ethanol tells 7 & 4 News a couple of things concern potential investors; "With the corn prices rising as they are, which is great for the farmers, ethanol prices kind of stay consistent with gasoline prices. That price as we know has come down quite a bit in the last few months. For those two reasons it's been a little tougher to raise money."

Star Ethanol still plans to build its plant, but the new developments could tie up construction for a while longer.

[rffrydr]

Back of the napkin accounting: EIA long-term crude average of $50 crude approximates $1.25 wholesale gas which at $3 corn equals NEGATIVE profits.

Last summer profits were on the order of $1.50 per bushel corn in an industry where 2-3 cents is considered great: Equals alot of ag people with fire (ethanol) in their eyes right now.

It's hard to factor in "overcapacity" in a product which is so small a percentage of it's end-product--gasoline.

[rffrydr]

Low '06 corn plantings could easily lead to 3.50 '07 corn in this current grain rally. That means no profits for Ethanol producers even at these still high petroleum markets.

[rffrydr]

I guess it's serious. Look who's in charge of the American heartland:

"We believe the market can and should grow larger," Patricia Woertz, a former Chevron refining executive who now runs Archer Daniels Midland, the biggest producer of ethanol in the United States.

And look what happens to the stocks when the product, which is supposed to be a substitute for gasoline actually approaches the price of gasoline:

http://www.marketwatch.com/news/story/Story.aspx?guid=%7BB7290E65%2D1998%2D4249%2D8F4A%2DE616C69B1D7D%7D&siteid=

They say they can take $35 oil. I wonder if the stocks can take it.

[rffrydr]

Yes, stupid, but not totally stupid. An enthanol Industry does need to be developed here and it looks like we're gonna be getting 300000plus barrells out of it soon. Poverty or Opec, choose your villian.

Of course the hedge funds have rediscovered grain since the 04 drought: saw this guy from Switzerland--

http://www.iht.com/articles/2006/09/25/bloomberg/bxfund.php

Again, locals having there spreads exploded and "markets" turning thin and spikey. nonsensical real-world conditions like illinois farmers growing wheat over corn.

http://www.marketwatch.com/news/story/Story.aspx?guid=%7B3304536E%2DEDD3%2D40AA%2DBD7F%2DD8EC05600A7B%7D&siteid=

Giving some support to CD, AD

[ema1970]

Well i hope that someone will contact you.
http://www.thinkfn.com/forum/viewtopic.php?p=58704#58704

well i hope i could have you as a guest in the chat room http://chatshack.net/ema666 is a non profitable chat room

[nodoodahs]

Didn't mean to shock my Portugese readers. Eu estou contente que você lê meu trabalho.

I respect Henry and don't want to discuss here, but maybe Henry is OK with me suggesting a couple of links on my page that ema1970 can post to his forum, perhaps even translate?

Read the fourth paragraph here.
http://www.billakanodoodahs.com/?page_id=7

Check out the first four links on the page here.
http://www.billakanodoodahs.com/?page_id=27

Feel free to PM me or Email me for discussion.
_________________
He was wearing my Harvard tie. Can you believe it? My Harvard tie. Like oh, sure, HE went to Harvard.

[HenryTo]

Guys, I would rather leave the discussion of politics out of this discussion forum - although I have faith in Bill's judgement.

Thanks,

Henry

[ema1970]

nodoodahs you choque your portuguese readers.when you write

"politics from the anarcho-capitalist point of view "

see http://www.thinkfn.com/forum/viewtopic.php?t=8038

can you explain your political point of view.

[nodoodahs]

Funny I had just posted yesterday about ethanol stocks.
http://www.billakanodoodahs.com/?p=37

The real story with sugar is not just Iowa corn getting people rich, but since the U.S. pays much higher than the world price for sugar, certain families in Florida are rich from sugar, too.

Don't hate the players, hate the game!

The "players" with money cycle some of it through to their "government representatives" and they continue to get rich off the schemes, which include subsidies for not only corn but for sugar.
_________________
He was wearing my Harvard tie. Can you believe it? My Harvard tie. Like oh, sure, HE went to Harvard.