Friday, March 9, 2007

SAO PAULO, Brazil — A man drives his Volkswagen sedan into an Esso fueling station here, checks the prices on the sign, and moves up to the pump labeled “alcool” to fill up with an ethanol-gasoline mix called E85 that now accounts for 40 percent of automobile fuel used in this country.

In these parts, ethanol is a sort of like a miracle drug, having helped Brazil to kick its own dependence on foreign sources of oil by the end of last year.

In the United States, Brazil’s success story is either a free-market solution the United States should try to match, or a pipe dream that is impossible — and dangerous — to try to copy.

President Bush arrived in Brazil last night, greeted by about 6,000 environmentalist protesters, to finalize an agreement today with President Luiz Inacio Lula da Silva to try to expand ethanol production and use in Latin America and the Caribbean. The two also hope to create an international standard for the fuel that could foster a robust global market.

Mr. Bush, who in January challenged the United States to replace 20 percent of gasoline with alternatives such as ethanol by 2017, will get a firsthand look today at how Brazil created an infrastructure to support its system.

“What Brazil has done in terms of promoting flexible fuel vehicles and getting E85 infrastructure out there is something we should replicate,” said Bob Dineen, president of the Renewable Fuels Association.

He said Brazil established incentives decades ago to help move to self-sufficiency, and said the demand has produced the infrastructure — including at least one pump dispensing E85, or 85 percent ethanol blend, at every fueling station in the country. All stations also offer “gasolina,” a more traditional blend that contains just shy of 25 percent ethanol, and some stations also advertise biodiesel fuel.

Most cars sold in Brazil are “flex fuel,” meaning they can run on either the lower blend or E85.

With E85 only about 70 percent as efficient as the higher-gasoline blend, drivers take that into account when deciding what to buy. With regular gasoline costing 2.69 reals per liter (about $4.85 per gallon U.S.), and E85 at just 1.49 reals per liter, or 55 percent as much, the choice was easy for most drivers yesterday.

Brazil relies on its abundant sugar cane crop to produce ethanol. In the United States, corn is more commonly used but also is not as efficiently processed into alcohol, requiring extra steps.

Mr. Dineen said corn and other grains could never reach Brazil’s levels of replacing 40 percent of the gasoline sold in the United States, but said researchers have their hopes pinned on perfecting cellulosic ethanol, which could be made from switchgrass, which can be grown on land that couldn’t support other crops.

But one Brazilian sugar cane farmer, writing on, said stacking Brazil up against the United States is like “comparing mangoes and apples.”

“Sugar cane ethanol from Brazil is not a realistic target or a comparable model for USA ethanol from corn,” said Milton Maciel, a former secretary of agriculture in northeast Brazil’s Alagoas state.

“It is very easy to replace all gasoline when you would only need 8 billion gallons per year and you have a generous plant that thrives rain-fed under tropical conditions,” he said, adding that it can be done in Brazil on a relatively small amount of total arable land. “However, this cannot be extrapolated for USA’s conditions, neither for corn, not even for sugar cane in southern states.”

Thomas Pyle, a lobbyist with the Rhoads Group, said that U.S. geography, with a major mountain range in the middle of a country and large populations on either side of it, makes difficult the creation of a distribution system for ethanol, which is generally piped. He also said there are questions about the health effects of ethanol.

“It isn’t going to replace the current fuel mix outright ever,” he said, adding that he thinks the fuel of the future is diesel. Either way, he said, the federal government should not try to pick a winner among fuel alternatives.

“The government has had experience in the past with trying to dictate the market, manage what the next thing is, and hasn’t had a good track record,” he said.

Even Mr. Bush’s effort to strike a deal with Brazil has irked some on both sides.

Mr. Lula da Silva, Brazil’s president, wants the United States to drop its tariffs on ethanol imports to boost Brazil’s exports, but the White House has said that is not up for discussion right now. Key farm-state senators fear Brazilian ethanol could hurt U.S. corn-based production.

“We need to make sure that any effort doesn’t undermine the production of ethanol in the United States,” said Sen. Charles E. Grassley, Iowa Republican. “We don’t want to replace U.S. dependence on foreign oil with foreign ethanol.”

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