Even as the United States is struggling with its dependence on foreign oil (and paying dearly for it), its industrial neighbor to the south has already emancipated itself from the black gold.
Brazil is currently the world’s largest producer and user of ethanol. Its factories are capable of producing 92,500 gallons of the renewable energy source daily. Nearly 70 percent of all new cars in Latin America’s largest country are capable of running entirely on ethanol, gas or a combination of the two. All told, this means that nearly half of the country’s domestic passenger fuel demand is met by ethanol.
Brazil’s transition to ethanol didn’t happen without cause, nor was the transition cheap or easy. Brazil was rocked same by the oil crisis that shook the world in the 1970’s. While the United States saw high gas prices, high demand and long lines at the pumps, Brazil saw massive trade deficits, massive government borrowing and hyperinflation.
But unlike the most industrialized nation in the world, Brazil’s government, then a military dictatorship, vowed to end its dependence on foreign oil—and followed through on their pledge. The government heavily funded and subsidized factories that turned its abundant sugar-cane crop into a fuel source and mandated that all gas stations in the country provide the new fuel source.
While their ethanol movement seemed to peak in the 90’s when a brief respite in high oil prices coincided with an ethanol shortage, the “alternative fuel source” is back with a vengeance in Brazil today, even as Americans are facing yet another fuel crisis.
Today, Brazilian commuters happily fill their empty tanks for just $18. Environmentalists are smiling too. Air quality in the Western Hemisphere’s second largest economy has significantly improved. In the meantime, the ethanol production facilities are burning the sugarcane waste to turn steam-powered turbines to provide all of the plant’s electrical needs. In fact, the facility currently has plans to create its second renewable energy source by providing electricity for a near-by town.
Many experts doubt the United States could duplicate Brazil’s success with ethanol (A dictatorship lead by the military can usually enact radical new policies quicker than can a democratic society with a market-driven economy). However, our neighbor to the south should serve to inspire us to put some real action behind our pledge to wean ourselves from foreign oil.
Just something to think about the next time you’re paying $60 to fill up your SUV.
By David Plowman