Brazilian Ethanol – Is It More Efficient or Less Mechanized

  • Published on July 28th, 2008

sugarcane field in brazil where it is used for biofuelsPeople who do not work for ADM, Deere, Cargill and Monsanto recognize that the rapidly growing corn ethanol industry is causing some unintended consequences. There has been a “corn rush” with rising prices for land, an increased demand for fertilizers, reduction in crop rotation schemes, and production cost increases for a wide array of food items. The breadth of the impact on food prices has surprised some people because there is not always a first order connection to corn, but the competition for land and fertilizers can bleed into a diverse range of crops and meat products.

Corn ethanol is also causing some very interesting political discussions that result in strange bedfellow alliances on all sides of the argument. Conservative and liberal labels have no real meaning in this discussion; even regional boundaries are being made fuzzy by the varying impacts of the market changes.

Some pundits, like former Reagan Administration national security advisor Robert McFarlane, have pointed south to Brazil and other Latin American countries for a way to ease some of the issues associated with corn ethanol. Their claim is that sugar cane based ethanol – like that which is produced in Brazil – could come to the rescue if the U. S. would simply eliminate the 54 cent tariff on ethanol imports.

Ben Bernanke of the Federal Reserve seems to agree. Investors like Vinod Khosla, Steven Case, and Ronald Burke are investing in Brazilian sugar cane plantations approaching a million acres in size. They are also putting pressure on Congress to reduce or eliminate the tariff.

A common thread running through literature supportive of cane based ethanol is that it solves many of the problems associated with corn because it is “more efficient” to produce. There are many ways to measure efficiency, including cost, energy balances, and overall system inputs from plantation to tank. Before simply accepting the notion that cane ethanol is far superior to corn, it is worth determining if there are unintended consequences associated with that alternative to petroleum.

My “questioning attitude” radar about Brazilian ethanol was alerted based on a few bits of personal knowledge that I gained over the years.

  • Ethanol – aka ethyl alcohol – is made by chemically converting solid sugar into a compound made up of hydrogen, carbon and oxygen (CH3-CH2-OH)
  • Corn sweeteners – at least before the ethanol craze – replaced cane sugar in a number of food products because they cost less.
  • Belle Glade, Florida, a place populated by cane cutters, was one of the poorest towns I have ever visited.
  • Mechanical harvesters do not work well in the cane fields because of the boggy soil.

After doing some deep reading, I have learned a bit more about Brazilian ethanol that is worth sharing.

What I learned from putting all of these facts in one place is that Brazilian ethanol creates some backbreaking jobs in a very hot climate. It does not use as much fertilizer as corn, but part of the reason is that the land used is still full of rich soil that is slowly being depleted.

It does not use as much external energy input as corn because of the lack of fertilizer and because the 300,000 laborers add an energy input that is not being measured in the energy balance. It does not cost as much as ethanol produced from corn grown in the United States by American farmers, but a big part of the cost advantage is that there are two-three growing seasons and the workers are poorly paid compared to Americans.

It provides some large profit margins (30% or more) for the owners of the mills and plantations. Petrobras, the Brazilian oil company, is one of the largest investors in the cane ethanol industry.

Finally, even with its cost advantages over gasoline, Brazilian production is only enough to provide about 1/365th of the world’s demand for liquid fuel. There are export shipments to the United States (often through Caribbean Basin countries), The Netherlands, Japan and Sweden and a strong desire among the producers to increase those profitable shipments.

My own bottom line is that I see no real reason for a tariff on imported ethanol, but I also see no reason to get excited by the prospects of ethanol solving any of the issues associated with burning fossil fuels. It requires intensive industrial farming, a large shipping and distribution infrastructure, and still releases CO2 when it is burned.

(Note: the molecular formula for ethanol is CH3-CH2-OH. When burned it produces water (H2O) and carbon dioxide (CO2). Since 35% of its mass is oxygen, burning ethanol produces only 2/3 of the energy of burning a similar mass of fossil fuel in an oxygen rich atmosphere.)

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Photo: 91RS via flickr under a Creative Commons License

About the Author

loves and respects our common environment, but he has a fatal flaw in the eyes of many environmentalists -- he's a huge fan of atomic energy. Reduce, reuse, and recycle have been watchwords for Rod since his father taught him that raising rabbits is a great way to turn kitchen scraps into fertilizer for backyard fruit trees and vegetable gardens. They built a compost heap together in about 1967, when he was 8 and when Earth Day was a mere gleam in some people's eye. During his professional career, he has served in several assignments on nuclear submarines, including a 40-month tour as the Engineer Officer of the USS Von Steuben. In 1994, he was awarded US patent number 5309592 for the control system for a closed-cycle gas turbine. He founded Adams Atomic Engines, Inc. in 1993, started Atomic Insights in 1995, and began producing the Atomic Show Podcast in 2006. He is currently an active duty officer (O-5) in the US Navy. He looks forward to many interesting discussions.
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  • The production of ethanol is concentrated in São Paulo. Far from large forest areas (Amazonia). Poor people need to work, if you do not sell the ethanol, they are hungry. You know what hunger is? Do not try to imagine, you do not know. Nature is important but also the population.

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  • Outside the box

    You´re considering only production process.

    Ethanol gives more energy than Corn

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  • factchecker:

    Thank you for your comments. Of course, it is always easy to interpret statistics in several ways, especially if viewed with a tight lens and a narrow focus. Here is a quote from the USDA Acreage Report dated June 30, 2008. I think that the picture is slightly different from what you implied by the comment that "More acres are not being planted to corn."

    "Corn planted area for all purposes is estimated at 87.3 million acres, down 7 percent from last year. Despite the decrease, corn planted acreage is the

    second highest since 1946, behind last year's total of 93.6 million acres. Growers expect to harvest 78.9 million acres for grain, down 9 percent from 2007. If realized, this would be the second highest since 1944, behind last year. Farmers increased corn plantings 1.31 million acres from their March intentions. Planting got off to a slow start across the Corn Belt, Ohio Valley, and the northern half of the Great Plains as frequent precipitation and cool temperatures during March and April prevented spring planting preparations."

    I have some difficulty with your comment "Why are all the major food manufacturing and retail grocery companies reporting quarter after quarter of record profits." I took a quick look at Tyson, Safeway, and Kroger. None of them look like they are reporting record profits. In fact, here is a quote from a Marketwatch report from July 28 regarding Tyson Foods

    "Chicken, beef and pork producer Tyson Foods Inc. reported Monday that the soaring price of feed continued to hurt business in the latest quarter, triggering a nearly-6% drop in its share price in afternoon trade.

    Tyson (TSN) said grain costs were up $140 million compared with the year-ago quarter, pushing its chicken segment to a loss of $44 million.

    Grain prices are expected to total $550 million more for the full year than they did in fiscal 2007, which means Tyson's chicken segment won't turn a profit for the fiscal fourth quarter, either, the company said.

  • Tim

    Good article, Rod. Many proponents of biofuel tend to look only at the system of production in the US and are blind to the deforestation and poor labor conditions of biofuel agricultural practices in Latin America. Of course, many products involve exploitive labor, but given the other alternative fuel types – namely electric – that don't involve these harmful processes, it seems very foolhardy to continue pushing biofuel development.

    The food factor has received a lot of press, and been dismissed by some credits, but I'm glad you also brought up the ecological effects of growing biofuel crops. With continuing topsoil depletion and the overuse of agricultural chemicals, we could see an environment in the Amazon pretty messed up from biofuel agriculture if we're not careful (See: The Great Biofuel Hoax of 2008).

  • factchecker

    Hello!! Your assumptions are pretty far off the mark.

    1. The corn ethanol business is not "rapidly growing"; it grew rapidly in 2006, stagnated in 2007 and has actually slid backward in 2008 as plants were put on hold and production reduced.

    2. More acres are not being planted to corn. In fact, many farmers in the U.S. did in 2008 what they do every year; they rotated acres. Soybeans and wheat gained; corn lost.

    3. The price of corn is only very marginally a player in higher food prices, because raw materials are a small part of any food cost. If raw materials are the problem, why are all the major food manufacturing and retail grocery companies reporting quarter after quarter of record profits?

    4. What "land rush?" Where? The number of acres planted to crops of some kind hasn't gone up; in fact it's gone down steadily every year for decades because of urban sprawl. Values of gone up rapidly _ but in a pattern strikingly similar to previous agriculture booms in the 70s and 90s when there was no ethanol factor. In fact, the Kansas City Federal Reserve is already warning that soaring costs of production threaten to "bust" land values and predicting that values will fall as fast or faster than they rose.

    5. Most of the cheap products in the world are cheap because of labor abuse. Clothing from Maylasia and Vietnam and China, automobiles from Korea, trinkets from the third world. Why is cane somehow more horrible?

  • Charlie Peters

    About 60,000 barrels per day of the oil used by cars is allowed by the "renewable fuel" CAFE credit

  • Charlie Peters

    An ethanol waiver would stop a $1 billion California oil refinery welfare program coming from the federal government @ $0.51 per gallon of ethanol used

  • Charlie Peters

    Was Dr. Russell Long/REAP/Pavley 2002 CA tailpipe bill for fuel ethanol, Bill Jones’ Pacific Ethanol business?

  • Charlie Peters

    Should Gov. Arnold Schwarzenegger consider a fee on corn fuel ethanol use?

    * * Lower price for food, gas, water, beer, cleaner air and funds for the budget from oil profit.

  • Charlie Peters

    Should a grand jury consider the cause of death of Alexander Farrell, 46, expert on alternative fuels?