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|Brazil hits energy jackpot|
|By Ernest Gurulé|
Though he is often left off lists of most effective presidents, there can be little argument that Jimmy Carter did not try hard to put the nation on the path to energy independence. In a 1977 Oval Office speech, he warned the nation that its appetite for imported oil could spell doom for future generations. He called it “the greatest challenge our country will face in our lifetimes.”
A generation later, with the nation on pace to exceed $500 billion this year on imported oil, it appears that Carter’s words had little impact — at least in the U.S. But, as America hungers for crude, Brazil, South America’s largest nation, has become energy independent.
In little more than thirty years, Brazil has parlayed its huge sugar cane crop into the world’s largest source of bio-energy. Nine out of ten vehicles in Brazil today runs on ethanol or a mixture of ethanol/gasoline.
“Most of the vehicles are flex-fuel,” said Colorado School of Mines professor Carol Dahl. “When people pull up to the pump they can pick whatever is cheaper.” And whatever they choose is usually cheaper than anything pumped in America.
Brazil’s jump into the future was inspired by the 1973 oil embargo when OPEC tripled its barrel price on oil. It was the cartel’s first significant show of power on the world stage.
Not long after, in 1975, Brazil undertook a nationwide government-financed program aimed at eliminating all vehicles powered by fossil fuels. To meet its goals, it looked no farther than to its vast sugar cane fields. Ethanol is produced with sugar cane.
The national effort was a quantifiable successful. It replaced more than ten-million gas or diesel burning vehicles with ethanol/biofuels options. It also had enough surplus to become one of the world’s largest exporter of ethanol.
By contrast, the U.S. use of ethanol, manufactured with corn rather than cane, has had mixed results. “In terms of competitiveness,” Dahl said, “corn ethanol is quite expensive.” From planting to processing, each step along the way involves a huge output of costly fossil fuels. And, perhaps, most critical of all in this food chain, the manufacturing of ethanol also has a marked impact on food prices.
Still, both countries ethanol production is dictated by weather. In two previous years, Brazil’s sugar cane crop was alternately affected by a deluge of rain in one season and a lack of it in the other.
But as the U.S. struggles to find cheaper, cleaner or more abundant and less expensive ways of fueling its engine, Brazil continues to hit the energy jackpot.
In 2007, Brazil reported the discovery of the largest oil deposits of the last thirty years in the Tupi field just off the coast of Rio de Janeiro. It is estimated to hold as much as 5-8 billion barrels of oil. Additionally, since Tupi, Brazil has made other significant oil discoveries. But getting to them presents a serious challenge. Each lies approximately 115 miles offshore and in mile-deep water — and then, another two-plus miles below the ocean floor. But they may also yield as much as 100 billion barrels of oil.
The opportunity to become the hemisphere’s largest producer of oil has dimmed any significant national debate on the potential environmental costs. And the Brazilian equivalent of “drill, baby, drill,” has grown exponentially louder with Petrobras, the national oil company, beating the drum.
“The government is whipping Brazil into a euphoria that this is going to be a solution for all our societal problems,” Greenpeace Brasil’s Sérgio Leitão, said in an interview with USA Today. There has been little to no public discussion of any resulting environmental damages, said the group’s director of public policies. Brazil’s green movement wants a full and open discussion of what is at risk along with a sensible debate on alternatives.
Economically and technologically, there are still volumes of questions that remain unanswered about the best and safest way of extracting oil from pools that lie three miles below the ocean’s surface.
By any definition, Brazil’s rise from near obscurity in energy production a mere generation ago to becoming a leader in clean-burning ethanol and biofuels, is amazing. It has been key in allowing an estimated 40-million Brazilians to join the middle class in the last decade.
But there has also been a downside. The boom, which preceded the current worldwide economic downturn, allowed people to buy things they never had before. But it also resulted in huge, consumer debt, the likes of which have also never been seen before.
For the first time, Brazil has had to adjust its focus from poverty eradication to simply trying to maintain its freshly minted middle class in the style to which it has become accustomed. It is a challenge not unlike that of its neighbor to the north.
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