A special section of THE DAILY ADVERTISER • November 3, 2007

Clockwise from top left: The skyline of Ribeirão Preto is punctuated by a growing row of business and residential skyscrapers through the heart of the city. (Right) Housekeepers, janitors and other Photos by Marcelo Min / Agéncia Fotogarrafa
day laborers leave the posh condominium skyscrapers of Avenida João Fiusa at 5 p.m. to return to working-class neighborhoods across the city. (Lower left) Bicycle riders and pedestrians move
up and down the wide walkable sidewalks along Avenida João Fiusa in front of new residential buildings under construction.

FROM STRUGGLING FARMS TO

BOOM CITY
Brazil’s ethanol investment has lessons for local economy
RIBEIRÃO PRETO, Brazil — If you have
to ask how much it costs to live here, you
probably can’t afford to.
In northeast São Paulo state, where 80
percent of Brazil’s sugar cane and ethanol
comes from, Ribeirão Preto is a boom-city
that owes much of its success to the coun-
try’s focus on biofuels.
Property costs are rising by the minute,
luxury skyscrapers sprout downtown as
fast as the cane does, and imported car deal-
ers time their sales to the beat of sugar and
ethanol markets.
“I’ve been here 15 years, and all this
neighborhood doesn’t exist then,” said
Carlos André Angerami, a real estate agent
serving posh new Avenida João Fiusa,
where $400,000 condos sell up to a year
before construction. “They’re building a
market for the rich.”
Deemed the Brazilian capital of
agribusiness, Ribeirão Preto has profited as
much from agriculture as Lafayette has
from oil.
Rapid growth fueled by the wealthy has
led to a lopsided real estate market, widen-
ing of the pay gap and debates over master
planning for future growth.
Born through the soil
The city was started in 1856 by farmers
in southeast São Paulo state looking for
good climate and soil to grow coffee.
They found both in Ribeirão Preto,
where practically anything grows in the
rich red soil (called terra roxa, or “purple
earth”) that’s flatter than most other parts
of the state. Year-round sunshine spawned
the city’s nickname, “Brazilian California,”
and 1,400 to 1,500 milliliters of rain per year
fall here just when the crop needs it.
“The temperature is much more warm in
Ribeirão Preto because it’s four hours north
from the coastal end of the state,” said
Eduardo Cunali, who was raised in the local Chamber of Commerce president in to the south.
region’s cane industry and now runs two 1989. “You saw a lot of property ‘For Sale’
John Deere farm equipment dealerships. signs, many signs, in some of the nicest
The diverse rebirth
“Sunny, long days, those are the most neighborhoods. Everyone realized just how Tax revenue flowed into Ribeirão Preto
important items to sugar cane region of much every aspect of our community was not from massive farms that surrounded it,
Brazil. ... That is here.” tied to (oil).” but new businesses tied to the farming and
By the 1880s, this city was the world’s ethanol plant industries, said Afonso Reis
largest coffee producer, and the boom
An ethanol artery Duarte, finance secretary for the city gov-
caused a rush of European immigrants to In the 1940s and 1950s, Ribeirão Preto ernment.
come and work for rich local coffee barons. began developing a new niche as the “Our taxes from sugar cane is less than
It all came to a halt when the New York region’s education hub, where seven public 10 percent of our total,” he said. “But the
Stock Exchange crashed and private universities are multiplying effect with businesses that deal
in 1929. now established. The city in it has a major impact.”
Ribeirão Preto’s econo- also built itself up as a med- Sertãozinho, a city of about 80,000 some
my was based solely on ical center for the state’s 40 minutes west of Ribeirão Preto, is con-
coffee, and U.S. buyers dis- northeast corner, a region of sidered the brain of Brazil’s ethanol tech-
appeared. As the city 80 cities totaling 3 million industry. It’s home to some 50 mills and 500
rebounded over the next people. companies supplying every type of sugar
30 years it learned not to The second big agricul- and alcohol equipment imaginable, nick-
put all its economic eggs ture boom hit in 1975, when named “Ethanol Silicon Valley” as an epi-
in one basket. ã Brazil, then reliant on center of álcool research and development.
Lafayette’s oil bust in importers for 75 percent of Following the cane boom, farmers and
1985 taught the same hard its oil, responded to the investors diversified the region to include
lesson. OPEC embargo with a oranges, cotton, rice, meat and dairy in its
State oil extraction national ethanol fuel pro- agriculture, and built up a textiles and man-
peaked in 1969, and gram called Pro- ufacturing sector, too.
Lafayette rode through Álcool (Pro- It’s now one of the fastest developing
the OPEC oil embargo of Alcohol). cities in Brazil, trailing only São Paulo, Rio
1973 on momentum and Heavy govern- de Janeiro and the nation’s capital, Brasília,
steady demand for ment subsidies for new money flowing into banks and local
drilling in the Gulf of convinced Ribeirão investments, Duarte said.
Mexico. Preto farmers to In Lafayette, the crash helped local lead-
Almost 70 percent of local jobs focus on cane for ers look hard at what the city had to offer
hinged on fossil fuel exploration in par- new ethanol mills, other than oil and gas. Tourism and health
ticular. New wells were rampant in the built by investors care quickly came to the forefront.
early 1980s, but plummeting oil prices sent a with federal backing. The region’s rich soil Festival International de Louisiane was
ripple effect through any city that lived and turned it into one of the world’s most prof- started in 1986 to boost the city’s morale and
died by oil and gas. itable areas for sugar and alcohol. image. And in 1989, Sides and the chamber
By 1986, local unemployment was at 14 Farms there now contribute about 30 started the Gateway Lafayette Project, a $1.1
percent. percent of the whole country’s sugar cane- million effort to relocate the tourist infor-
“Everyone in Lafayette suddenly real- based fuel, and one of the first major mation center to its current spot on
ized they were in the oil and gas industry, intrastate highways built mid-century con- Evangeline Thruway from the opposite side
whether they were or not,” said Larry nected Ribeirão Preto like a fuel artery to of town.
Sides, president of Sides & Associates, and metropolis São Paulo, four hours See BOOM CITY on Page 2

Stories by Bob Moser • bmoser@theadvertiser.com

• Go to theadvertiser.com/ethanol for photos and more information on the ethanol industry in Brazil •
2 • The Daily Advertiser
ETHANOL
Separating fact from fiction about fuel
Myth: Ethanol will harm car and
truck engines.
Fact: Every major automobile
manufacturer approves up to 10
percent ethanol-blended gasoline in
their warranties. Cars built since the
1970s are fully compatible with E-10
unleaded. Ethanol is considered a
high-value additive that boosts a car’s
octane and performance, eliminates
the need for antifreeze, prevents burn-
ing of engine valves and stops buildup
in fuel injectors.
Myth: Ethanol raises the cost
of gasoline.
Fact: Ethanol costs less than
other oxygenates and octane
Continued from Page 1
Boom City
“Companies volunteered to move it, all
the trees out there were planted by Boy
Scout groups,” Sides said. “We created
an attractive gateway to our communi-
ty.”
UL President Ray Authement is cred-
ited with expanding engineering and
science departments during the down
period that are now key parts of UL’s
technology niche. UL also started a
Microbusiness Development Center
meant for very small entrepreneurs try-
ing to start fresh after an oil or gas lay-
off.
Today, about 50 percent of Lafayette’s
economy is tied to the energy industry,
said Gregg Gothreaux, CEO of the
Lafayette Economic Development
Authority. The local oil and gas influ-
ence is now mostly service companies
that can respond to global needs, and
are less dependent on what’s being
explored in any one region.
“We will always need energy as a
society,” Gothreaux said. “So to be
involved in the energy business as a
community is good because that’s an
economy that won’t go away.”
Dealing with growth
Construction crews building stucco
homes, rush-hour traffic and new mini-
malls look the same in Ribeirão Preto as
in Lafayette.
But the Brazilian boom-city has a
plan in place to manage growth, and
already has multiple historic, walkable
mixed-use areas where residents shop,
work, eat and live all within a few
blocks.
Behind Duarte in the city govern-
ment conference room hangs a map of
Ribeirão Preto with a yellow border of
the city limits.
“New real estate is only inside the
yellow,” Duarte said. “(Developers) can’t
build outside the yellow but some spe-
cial construction … and if we allow the
infrastructure must be built by the con-
struction company, water and electrici-
ty lines, so they prefer to be near the
urban area.”
Comparative city statistics:
Ribeirão Preto
Population - 550,000
Total area - 252 square miles
City Budget - U.S. $445 million
Lot size/price
3,013 sq-ft lot / $75,000
Lafayette
Population - 119,485 (as of July 2006)
Total area - 48 square miles (city)
City Budget - $548 million
Lot size (River Ranch)/price
4,800 sq-ft patio home / $75,000
CONTENTS
2 • Careers created
High-tech jobs change the face of agriculture
3 • The backbone of the industry
Cane cutters work the fields with few protections
4 & 5 • Global energy demand
Illustration of where the world’s oil and ethanol are headed
• Go to theadvertiser.com/ethanol for photos and more information on the ethanol industry in Brazil •
enhancers for gasoline, and is less
expensive than ordinary gas. Blending
ethanol with gas lowers the fuel sta-
tion price more as oil prices keep ris-
ing. The Consumer Federation of
America reported in May 2005 that
drivers should be saving 8 cents to 10
cents per gallon if petroleum mar-
keters blended more ethanol into gaso-
line.
Myth: Ethanol takes more energy
to make than the fuel itself provides.
Fact: Not true. Critics have most-
ly cited a 2005 study that claims a neg-
ative energy balance for ethanol, but it
was cowritten by a former oil compa-
ny employee. New reports show corn
ethanol provides 20 to 50 percent more
Careers created
PIRACICABA, Brazil — A sweet,
gritty taste of hand-cut sugar cane
between the teeth reminds Carlos
Roberto Manochio Jr. why he gave
his life to agriculture.
Ten-foot-high stalks grew every-
where he looked as a child in rural
São Paulo state. It’s the richest
region for cane growth in Brazil,
the world leader in sugar produc-
tion and ethanol export. All a kid
like Manochio needed was a pock-
etknife and some patience, and
summer days were always better
with slices of sugary stalk to chew
and suck dry.
“I never get to do this anymore,”
said Manochio, 28, from a cane field
owned by Cosan Costa Pinto, one of
the largest sugar and ethanol mills
in Brazil. He passed on farming to
become an agronomic engineer,
staying close to the cane he loves by
learning how to make it grow taller
and faster.
Brazil’s government started a
national ethanol program in 1975,
and by the mid-1980s rural youth
like Manochio saw agriculture and
any science related to it as the
“future profession.”
“We believe that now we’re in
the future,” he said.
Brazil’s booming ethanol indus-
try spawned new markets for farm-
ers, foresters and a host of techni-
cal industries. Similar growth is
already being seen throughout the
United States, and Louisiana’s bud-
ding ethanol industry could expect
the same.
A job infusion
Ethanol in the U.S. now creates
more employment in rural areas
than any other economic activity.
The biofuels industry supported
more than 160,000 new jobs in 2006
throughout the economy, and boost-
ed U.S. household income by $6.7
billion, according to the Renewable
Fuels Association. There were 119
ethanol plants and more than 85
currently being built or expanding,
compared to 16 two years ago.
Brazil had 369 ethanol plants
running this year, with 44 more
under construction, another 59 as
approved projects, and 232 more in
planning stages. Some 712,000 peo-
ple worked in ethanol plants or
cane farming as of 2005, according
to the São Paulo Sugarcane
Agroindustry Union.
“If we build an ethanol infra-
structure you’re going to need all
kinds of people we could be educat-
ing,” said Leon Labbe, head of UL’s
renewable resources department.
“Government regulatory and
inspectors, technicians for plants,
lab testing — the potential here for
6 • Other countries getting
into the game
As global warming concerns push ethanol progress around
the world, Brazil stands to profit
7 • Where cars run on sugar cane
Flex-fuel vehicles give Brazilians choice at the fuel pump,
and most choose ethanol
8 • Time for change
A reporter’s commentary on the future of U.S. biofuels
n. A clean-burning, high-octane, renewable fuel additive
made from grain or other biomass sources
energy than used to make it. Other
feedstocks such as sugar cane provide
more energy.
Myth: Using corn and grains for
fuel is why food prices are rising.
Fact: Higher corn prices are only
a small factor behind food prices, and
oil plays the biggest role. U.S.
Secretary of Agriculture Chuck
Conner said in October that about 80
cents of every retail dollar spent on
food goes toward processing, packag-
ing, distribution and marketing costs.
They’re all primarily
impacted by rising energy costs.
U.S. ethanol is made mostly from
field corn, which feeds livestock and
humans don’t eat. The starch portion
Engineers monitor every aspect of the Santa Elisa sugar and ethanol mill in Sertãozinho, Brazil, from one control room.
Career in biofuels
If you’re seeking a job in the
ethanol industry, or are an employer
looking for qualified help, visit
www.ethanol-jobs.com
our environmental science or agri-
culture science students is great.”
Brazil’s ethanol infrastructure
may be growing faster than its sup-
ply of qualified engineers.
For each unit of energy generat-
ed in Brazil, oil creates one job,
coal production makes four and
ethanol 152, according to the
Interamerican Ethanol Com-
mission, a world biofuels advocate
based in Coral Gables, Fla.
Growth in general business,
paper and steel mills are just a few
competiting industries drawing
away chemical, mechanical and
electrical engineers needed by men
like Luiz Biagi.
He co-owns Sermatec and Renk
Zanini, machinery manufacturers
for ethanol and sugar processing,
and owns nine mills in São Paulo.
Between them all he employs 27,000
people, but 300 jobs remain vacant,
many entry-level engineers for
mills that start at U.S. $42,000.
“When students leave the uni-
versity they are automatically
employed in these areas,” Biagi
said. “Engineers we get have come
from the countries around Brazil,
Saturday, Nov. 3, 2007
of a corn kernel is what goes toward Office in an October 2000 report, Big
ethanol, which usually has low value. Oil has received about $130 billion in
The protein, minerals and fiber-part of tax incentives in the past 30 years,
the corn are called distillers grains much more
and sold as high-value livestock feed. than the roughly $11 billion provided
A 56-pound bushel of corn in the dry for renewable fuels.
mill ethanol process yields 18 pounds
of distillers grains. Myth: Ethanol contributes to
global warming.
Myth: Ethanol is unfairly subsi-
dized. Fact: Blending 10 percent ethanol
into gasoline reduces
Fact: There is a 51-cent-a-gallon greenhouse gas emissions 18-29
federal credit that costs taxpayers percent compared to regular gas,
about $2 billion per year, most of according to research by Argonne
which goes to oil companies that blend National Laboratory. Approximately 8
it with gas, not farmers. million tons of harmful emissions
The U.S. has subsidized the oil weren’t put in the U.S. atmosphere in
industry since the early 1900s. 2006 due to ethanol use, equal to tak-
According to the General Accounting ing 1.21 million cars off the road.
High-tech jobs
change the face
of agriculture
Photos by Marcelo Min/Agéncia Fotogarrafa
A technician examines parts of a new turbine and electricity generator in the factories of
Renk Zanini in Sertãozinho, Brazil. The country’s ethanol industry is expanding too quickly
for domestic training of engineers and technicians to keep up.
like Chile and Argentina.” the tonnage ground per day rose
from 4,000 to 1.2 million.
Higher yields, fewer farmers “There were 46 mills then, there
Most new jobs in the industry are 11 mills now,” Thibodeaux said.
aren’t in farming, and U.S. agricul- “It’s economies of scale, but we still
ture has become more efficient in grow more cane than ever.”
the past century.
Less than 5 percent of graduates
From 1964 to 2007, the number of from LSU’s College of Agriculture
sugar cane farmers hauling to now work on a farm after college,
Cajun Sugar Cooperative in New
Iberia dropped from 220 to 60. But See CAREERS on Page 3
ONLINE
Find expanded coverage of the ethanol industry in Brazil
and Louisiana’s potential @theadvertiser.com/ethanol.
• multimedia audio slide shows
• an interactive map
• photo galleries from Brazil
• continued coverage
Saturday, Nov. 3, 2007
The backbone of the industry
Cane cutters work the
fields with few protections
SERTAOZINHO, Brazil — His eight
hours are nearly up, but Valdeci
Nascimento’s sore, sweaty, soot-cov-
ered hands wield a machete that he
can’t stop swinging.
He hacks away at the base of naked
sugar cane stalk in a field with 45
other workers, shielding mocha skin
from the tropical heat under a ragged
ballcap and sweat-soaked long-sleeve
shirt. The faster he cuts, the more he’s
paid. At about U.S.$1.50 per ton of
cane, Nascimento, 33, builds as many
car-sized piles of stalk as possible to
make his grunt work worth it.
This is the muscle that moves
Brazil’s mammoth cane ethanol indus-
try.
As much as 75 percent of Brazil’s
sugar cane crop, which fuels the
nation’s ethanol-reliant infrastruc-
ture, is still harvested manually by
about 500,000 men and women like
Nascimento. Most are migrants from
the country’s northeast, where jobs
are scarce and interest is high in sea-
sonal labor offered in southern “cane
country” states such as São Paulo.
He doesn’t want to be here
It’s the second year Nascimento left
his wife and two kids in northern
Ceará state to cut cane for seven
months in São Paulo, the largest
ethanol-producing state. With debts to
pay at home and few good jobs,
Nascimento headed blindly to cane
country hoping for a contract with a
sugar or ethanol mill. They pay well,
have on-campus housing and cafeteria
dining.
But Nascimento wasn’t so lucky.
He signed with one of many agents
who place workers on plantations.
Known for their dishonesty, workers
call an agent like this a “gato” —
Portuguese for cat. The gatos provide
food and housing but handle workers’
money, some taking large cuts for
their trouble before giving workers
what they’ve earned.
Nascimento made $6,000 real (the
Brazilian currency) over six months
last season, but he thinks his cut will
come to only $4,000 real ($2,200 U.S.)
Continued from Page 2
Careers
said Dean Ken Koonce. Enrollment is
steadily increasing, but of the 2,100
graduate and undergraduate stu-
dents, most focus on the business
side and textile merchandising, not
the traditional plant and animal sci-
ences that lead to farming.
“The interest of students in agri-
culture isn’t as great as it has been,”
Koonce said. “But I think farming
will change, the production scale
will be larger, more people will be
getting in for non-food production
(for biofuels), and production sys-
tems will change.
“Going into biofuels and compet-
ing with petroleum products seems
• Go to theadvertiser.com/ethanol for photos and more information on the ethanol industry in Brazil •
this time.
“I really want home now,” he said.
“I don’t like this job.”
In Piracicaba, a city in central São
Paulo, the rural workers union’s No. 1
fight is to stop the large local mill,
Cosan Costa Pinto, from contracting
with gatos for cheap labor.
In late July, the state sanitation
office busted a house of 10 migrant
workers for living in filth. “If you’d
seen it, you’d throw up,” said union
lawyer Marcelo Duarte.
The gato would be held liable for
this and other crimes, but they’re good
at avoiding police, said Jacob
Bortoletto, union vice president.
Pushed to produce
From 2000 to 2005, 312 cane and
ethanol laborers died while working,
and about 83,000 suffered accidents on
the job, according to Brazil’s Social
Security Administration and
Bloomberg news service. Heat exhaus-
tion and sun-induced fever are com-
mon ailments Nascimento said work-
ers suffer from.
Sugar cane cutters suffer about
eight times as many injuries as labor-
ers in Brazil’s citrus and grain indus-
tries, though cane makes up only 1
percent of the country’s total agricul-
ture.
These jobs may become extinct
within the next decade, when produc-
ers must switch over to mechanized
harvesting in order to reduce air pol-
lution.
Before humans can harvest sugar
cane, the fields must be burned to
clear out sharp leaves and snakes.
Switching to mechanical harvesters
would eliminate the practice, which
shoots thick, black ash into the air and
is considered a major contributor to
respiratory disease in São Paulo.
Mechanized harvesting will be
mandatory by 2014 in São Paulo,
where field-burning is being outlawed.
And as cane acreage expands, a
mechanical harvester does the work of
60 to 80 men in a day, said Erlon Avelar
Pereira, spokesman for Cosan’s Costa
Pinto mill in Piracicaba.
to be a made-to-order opportunity for
agriculture, which has been strug-
gling because of world competition
and the costs to make food. Biofuels
is really a godsend to save agricul-
ture, … and the oil price going up
constantly will make biofuels com-
petitive, and gets us in the same ball-
game.”
‘Treasure chest of potential’
U.S. researchers are on the cut-
ting edge of cellulosic technology, an
important step toward making
ethanol profitable long-term.
Chemistry, biology and engineering
majors are who’ll move refiners
beyond the basic sugar or corn-
starch crops used for ethanol now,
and into converting grasses, crop
leftovers and even algae into fuel,
plastics and thousands of chemicals
currently made from petroleum.
“We’re sitting on a treasure chest
The Daily Advertiser • 3
Photos by Marcelo Min/Agéncia Fotogarrafa
(From top): Seasonal sugar cane workers share a moment in the kitchen of their Piracicaba rental house the night before many will unex-
pectedly lose their jobs cutting cane. (Above) A cutter stops to quench his thirst in a nearly-cleared cane field in Sertãozinho, Brazil.
‘Nowhere else to go’
When police respond to complaints
it can be bittersweet for the union’s
cause.
Two years ago, federal police closed
some gato-run houses in Piracicaba for
violations, Duarte said. The next day
150 people came to the union office cry-
ing, suddenly without housing or jobs.
“They had nowhere else to go, noth-
ing else to do,” he said.
When a two-bedroom gato-house in
Piracicaba was raided for health viola-
tions in July, 10 workers living there
were out of jobs. Some caught on with
another farm, but seven had to leave by
Aug. 7.
On the eve of his departure, 18-year-
old Edlanio Pereira was at a loss.
He borrowed to get here from north-
ern Paraíba state thinking he’d have
the whole harvest to save. But more
than half his earnings are earmarked
for the middleman, and Pereira doesn’t
have enough for a bus ticket home.
“Now what can I do?”
of potential here,” said Mark Zappi,
dean of UL’s College of Engineering.
“Biomass and biorefineries of the
future will produce tens of thou-
sands of products. It’s just as organi-
cally rich as petroleum.”
Zappi is helping position UL to
lead Louisiana’s research and eco-
nomic development-efforts for a bio-
chemicals industry, after doing the
same for Mississippi over the past 12
years.
“There’s feedstock, or growing,
that LSU AgCenter is on top of, and
we’re partnering and collaborating
with them,” he said. “But our contri-
bution is the processing side …
We’ve had a very deliberate hiring
strategy over the past couple years to
come in and well-establish ourselves
in this. We want to produce top grads Marcelo Min/Agéncia Fotogarrafa
and undergrads, and research and Cutters make quick work of cane stalk in the same field, flash-burnt on the outside to
counsel to policymakers and the remove sharp fronds and scare off snakes.
industry.”
4 • The Daily Advertiser The Daily Advertiser • 5

GLOBAL ENERGY DEMAND

The United States leads the world in oil consumption, burning up more per year than the Middle East.
next four biggest consuming nations combined. World oil production is expected by U.S. energy analysts to peak by 2037, followed by a
U.S. We’ve made less of our own oil over the past 10 years and now import 65 percent of the oil permanent, steady decline. It’s why renewable fuels like ethanol are being taken seriously
Brazil
energy
we need, becoming more reliant on countries like Saudi Arabia, Russia and an unstable now, and the U.S. and Brazil are leading the effort.
Top world oil producers, 2006 Top world oil consumers, 2006 Top world ethanol producers, 2006 energy
facts (Production in thousands of barrels per day) (Production in thousands of barrels per day)
20,588
(Millions of gallons, includes all ethanol grades)
facts
4,855
4,491

10,719
9,668
301 million 8,367
7,274 190 million
2007 estimated population 5,222 2007 estimated population
4,146 3,836 3,706 1,017
3,289 2,938 2,802 2,785 3,103 2,630 2,534
Size comparison 2,218 2,183 2,157 2,068 502
251 202 171 153 122 102 8,456,510 sq.km.
U.S. Brazil total land size.
Saudi Russia United Iran China Mexico Canada United Arab Venezuela Norway United China Japan Russia Germany India Canada Brazil South Saudi United Brazil China India France Germany Russia Canada Spain South
Arabia States Emirates States Korea Arabia States Africa
Source: Energy Information Administration Source: Renewable Fuels Association

9,161,923 sq.km. Top world ethanol Top U.S. oil Top U.S. corn ethanol Top 5 oil importers to U.S.
total land size. producers producing states producing states Top 5 ethanol importers to U.S.
7.4%
GREENLAND Percentage of farmland used
18.01% for growing crops.
Percentage of farmland (Less than 1 percent used for
used for growing crops. sugar cane, which is already
meeting nation’s ethanol needs.)
119
Number of ethanol plants, North
as of 2007. Sea
369
Number of ethanol plants,
as of 2007.
NORTH AMERICA
RUSSIA

CANADA

Corn
Primary source of ethanol.
FRANCE
EUROPE Sugar cane
Primary source of ethanol.
0-10% UNITED
Percentage of ethanol STATES
in regular gasoline.
Pacific Atlantic 25%
Ocean Ocean Percentage of ethanol
in regular gasoline.
E-85 (85% ethanol) CHINA
Main ethanol-based fuel.
E-100 (100% ethanol)
MEXICO SAUDI Main ethanol-based fuel.
ARABIA INDIA
Louisiana’s sugar production, TRINIDAD
AFRICA ASIA
by parish JAMAICA AND TOBAGO
3.5% Top 10 raw sugar producers, 2006: EL SALVADOR
Percentage of total fuel (In millions of pounds) NIGERIA
consumption. COSTA RICA VENEZUELA
Iberia 327
Assumption 259
40%
Percentage of total fuel
Iberville 252
86 Pointe Coupee 212
consumption.
Number of ethanol plants
under construction/expanding. Lafourche 195
St. Mary 193
St. Martin 190 BRAZIL
■ By 2010, U.S. ethanol pro- St. James 145 Indian
duction could displace the Vermilion 123 Ocean
equivalent of 311,000 barrels West Baton Rouge 104
of crude imported oil per day SOUTH
— more than one large oil
tanker per week.
AMERICA AUSTRALIA 44
Number of ethanol plants
under construction/expanding.
■ Oil accounts for about 99% 59 more as approved projects,
of U.S. transportation fuel 232 in planning stage.
supply, 65% of which is
imported. Sources for U.S. and Brazil Energy
Facts: Renewable Fuels Association;
■ The Energy Information CIA World Factbook; Jose Luiz Olive-
Administration (EIA) projects rio, vice president of Technology and
Development for Dedini; Energy Infor-
that, by 2025, the U.S. will Source: LSU AgCenter mation Administration; Interamerican
import 71% of its petroleum Ethanol Commission; Louisiana Mid-
needs. Continent Oil & Gas Association.

An ethanol timeline
Brazil

Source: UNICA (Såo Paulo
Sugarcane Agroindustry
Union)
1975: Brazil’s military government 1976: Govern- 1977: All fuel 1978: All taxis, 1979-1980: Iranian Revolution leads to 1984: Alcohol- 1986: Oil crisis passes. 1989: Alcohol supply crisis reaches peak, 1990-1999: Dropping demand for hydrated alcohol (100 2000: Brazil’s Society of 2003: Volkswagen 2005: Seventy- 2006: 1.3 mil- 2007:
starts national ethanol program, named ment man- stations in police cars and second world oil shock. Brazil orders only cars Government support for Brazilians are upset they bought new cars percent) for alcohol-only cars was countered by growing Automotive Engineers marks its 50th anniver- three percent of lion flex-fuel Automakers
“Pro-Alcool,” to wean itself off foreign oil dates only Brazil required vehicles used automakers to start making ethanol- account for 94.4 alcohol production and new and now ethanol costs more than gasoline. popularity of small, light cars in Brazil, and mixing of leads development of a sary by debuting the new cars sold in vehicles on approach mak-
— which supplied almost 80 percent of ethanol be to offer ethanol by state-run powered vehicles for domestic sale. percent of auto- vehicles wanes. World The annual production of alcohol-only vehi- unhydrated alcohol in gasoline for those cars. new flex-fuel engine, first commercial flex-fuel Brazil came with Brazilian roads. ing 100 per-
its fuel at the time. Large public and pri- used in Brazil- (law remains utilities have to Companies had been modifying tradi- manufacturers’ demand for sugar rises, cles drops quickly to 10 percent in 1990, All Brazilian gasoline is required to have 20-25 percent which has complex soft- car, its Gol TotalFlex. flex-fuel engines. cent of new
vate investments supported by the ian motor- today). run on ethanol. tional engine designs to meet growing production. and mill owners focus more then 0.06 percent of factory output in 1997 alcohol mixed in, which the government oversees, and ware able to calibrate General Motors brings cars as flex.
World Bank helped expand sugar cane sports, a move demand for vehicles to run on ethanol, Brazilian sugar cane on (about 1,075 vehicles), settling at 1.02 per- adjusts based on supply and demand of sugar and alco- immediately to any fuel its first flex-fuel vehicle
farming and construction of alcohol dis- meant to boost which had problems. Now, they’re pro- this, abandoning supply of cent in 2001. hol throughout the year. mix, all the way up to to market.
tilleries. Large-scale use started as a acceptance. ducing a newly designed engine. national alcohol production. 100 percent ethanol.
gasoline additive of 20 percent.

OPEC
oil
1970 crisis 1975 1980 1985 1990 1995 2000 2005 2010
U.S.

Source: Energy Information
Administration
1974: The Solar
Energy Research,
Development, and
Demonstration Act
led to research of
converting cellulose
and other organic
materials (including
wastes) into useful
energy or fuels.
There’s no cellulose-
conversion plant
operating today.
1975: U.S. 1978: Gasohol is defined in 1979: Marketing of com- 1980: Less than 10 1980: Congress 1983: Ethanol 1984: Ethanol 1985: price crash 1997: Major U.S. auto 1998: The ethanol 1999: Some states began 2000: EPA rec- 2002: Over 3 2003: A total of 18 2007: 4.5 million vehicles on U.S.
begins to the Energy Tax Act of 1978 mercial alcohol-blended ethanol facilities existed, placed an import subsidy rises plants in the pushes ethanol pro- manufacturers began subsidy of 54 cents to pass bans on MTBE, an ommended million E-85- States had passed roads capable of E-85 use, and
phase out as a blend of gasoline with fuels began. Amoco Oil making 50 million gallons fee (tariff) on for- to 50 cents per U.S. peaked at ducers out of busi- mass production of flex- per gallon extended octane additive in gasoline, that MTBE capable vehi- legislation to ban more than 1,300 fuel stations
lead in gaso- at least 10 percent alcohol Company began market- of ethanol per year. Con- eign-produced gallon. 163. The ness, despite the fuel vehicle models able through 2007, but will because traces were show- should be cles in use, MTBE. California offer it (of 179,000 total stations).
line. Ethanol made from renewable feed- ing commercial alcohol- gress enacted a series of ethanol. Previously, ethanol sub- subsidies. Only 74 of to run on E-85, gasoline, be reduced gradually ing up in drinking water phased out though only began its ban in Most are concentrated in the
becomes stocks. The law amounted to blended fuels, followed by tax benefits to ethanol pro- foreign producers, sidy to 60 163 ethanol plants or both. Done mostly by to 51 cents per gal- sources, presumably from nationally. 169 fuel sta- January 2004, cre- upper Midwest where corn and
more attractive a 40 cents per gallon sub- Ashland, Chevron, Bea- ducers and blenders, loan such as Brazil, were cents per gal- stayed open by end automakers to tap into lon in 2005. leaking gasoline storage tions in U.S. ating a large ethanol plants are located. Oil
as a possible sidy for every gallon of con, and Texaco. About guarantees for small pro- able to ship less lon. of year. environmental credits, tanks. Ethanol as an alter- offer E-85. demand for refiners receive a 51-cent tax
octane boost- ethanol blended into gaso- $1 billion to go to biomass ducers to build plants, and expensive ethanol E-85 fuel is available native additive to take ethanol. credit for every gallon of ethanol
er for gasoline. line. related projects from the purchase agreements for into the United almost nowhere. MTBE’s place. they blend into gasoline.
Interior and Related Agen- ethanol. States.
cies Appropriation Act.

• Go to theadvertiser.com/ethanol for photos and more information on the ethanol industry in Brazil • • Go to theadvertiser.com/ethanol for photos and more information on the ethanol industry in Brazil •
6 • The Daily Advertiser
KYOTOPROTOCOL
Ethanol hasn’t hindered oil exploration
In the deep waters off Brazil’s
southeast coast, new discoveries of
oil — not ethanol production — are
a big reason why this nation could
be energy-independent in 2006, and
be considered a player in world fuel
supply for the foreseeable future.
Following the 1973 OPEC oil cri-
sis, Brazil was importing nearly all
its oil and began heavily subsidiz-
ing a new ethanol industry. But at
the same time the state-owned oil
company, Petrobras, was pioneering
deep-water exploration techniques
now mimicked around the world,
and studied by UL students.
“Brazil knows more about deep
water than anyone; most of their
reserves are in deep water,” said Ali
Ghalambor, head of UL’s petroleum
engineering department, which has
had an exchange program with stu-
dents from Brazilian universities
for the past four years.
Today ethanol makes up about
one-third of the fuel Brazilian vehi-
cles burn, and the country says by
Other countries getting into the game
Investors flocking
to Brazil for tips on
biofuels technology
PIRACICABA, Brazil — At least
twice a week, executives here at
Dedini’s headquarters pencil in time
to let delegates from around the
world window-shop their ethanol
plant-making process.
Dedini, the world’s largest maker of
complete ethanol mills and their parts,
is a Brazilian-born success story
poised to profit as the world pursues
biofuels. About 80 percent of ethanol
distilleries in Brazil are Dedini-made,
and 25 have been sold abroad.
More than 8,000 investors and pub-
lic officials visited the headquarters
here last year from Asia, Africa,
Europe and North America, eager for
a peek at the multi-million dollar
pricetag to build their own biofuel
industries. Climate-change concerns
have become a global rallying point,
and ethanol production is ramping
up worldwide. France is turning
beets to fuel, the U.S. relies on corn,
and wild grasses and farm debris are
the non-food answer everyone is
working toward.
But in the meantime, Brazil’s
sugar cane-derived ethanol is the
cheapest, most efficient form to copy,
and cane-producing nations are
attracted to Brazil’s example.
“People are studying it, but no
orders yet,” said José Luiz Olivério,
vice president for technology and
development at Dedini. “But we can
expect a huge amount of (ethanol
mill) projects in the future.”
World demand grows
He’ll bank on it because of
treaties like the Kyoto Protocol, in
which 36 countries vowed to cut
emissions by 5 percent below 1990
levels, from 2008 to 2012. If those
countries blended just 10 percent
ethanol in gasoline, the world would
need an extra 20.2 billion gallons of
ethanol to supply demand in 2010.
That’s on top of 12 billion gallons
made in 2006 by the top 15 producing
nations combined. Most consuming
countries will need to chip in to meet
that demand.
“It’s very important for ethanol to
be a world product,” Olivério said. “If
only Brazil produces, this will never
be. People won’t trust only one sup-
plier; it needs to become a commodi-
ty.”
In March, President Bush visited
Brazil to talk with President Luiz
Inácio Lula da Silva about expanding
world ethanol production. They
signed an agreement to develop bio-
fuel technology and private invest-
ment in other countries, a key step in
building a global ethanol industry.
Brazil’s Lula spent much of the
summer and fall in Latin American
and European countries promoting
ethanol partnerships. Within 15
years a global biofuels industry
would “democratize energy access,”
Lula told The New York Times in
September. “Instead of 10 countries
producing oil, we could have 120
countries producing biofuels.”
• Go to theadvertiser.com/ethanol for photos and more information on the ethanol industry in Brazil •
2010 that could reach 50 percent. But
for 27 years, the country’s oil pro-
duction has grown about 9 percent
annually, too. Brazil is now one of
the top 15 world oil producers, and
nearing a goal set by 1970s leaders to
eventually be a net exporter.
Even with the ethanol boom,
Brazilians knew they’d always need
oil, and Louisiana’s oil and gas
industry can take comfort in the
same. Every gallon of ethanol added
to U.S. fuel should go toward dis-
placing the 3.7 billion barrels of oil
imported yearly first, which fills 65
percent of the U.S. demand.
“Ethanol isn’t going to replace
fossil fuels, it isn’t a silver bullet,
there’s no such thing,” said Brian
Jennings, executive director of the
American Coalition for Ethanol.
“Ethanol is one very important
alternative to reducing our reliance
on foreign sources of oil.”
Louisiana is the No. 1 producing-
state of crude oil in the U.S., and No.
2 in refining capacity, according to a
A welder works inside a new distillation tower being built at Dedini’s sugar mill and ethanol plant factory in Piracicaba, Brazil.
Nations find a niche
Some 50 countries are promoting
and developing ethanol infrastruc-
tures. Of those, 27 have set blending
goals for ethanol in gas, and 39 have
passed laws to develop biofuels.
Since 2002, China has moved
toward a 10 percent blending man-
date for ethanol in its gasoline to
avoid foreign oil and improve nation-
countries are required to cut greenhouse
gas emissions to near-1990 levels by 2012.
2006 study by the Louisiana Mid-
Continent Oil and Gas Association.
Energy jobs are found in all of
Louisiana’s 64 parishes, and
Lafayette has the most with 15,241.
The industry believes more oil
lies off each U.S. coast, in Alaska
and the eastern Gulf of Mexico,
Ghalambor said. Drilling is limited
or off-limits in some of these areas
for environmental protection, but
domestic oil production has
decreased elsewhere by about 1 bil-
lion barrels per year in the past
decade.
“I think this country has a lot of
fossil fuel resources not being
used,” Ghalambor said. “You never
know, if 15 years from now an ener-
gy crisis prompts pressure to tap
the Atlantic or (Alaska’s) natural
wildlife preserve.”
There’s profit to be made in a
partnership with ethanol, some-
thing Brazilian oil embraced from
the start that some U.S. companies
haven’t.
al security. It’s now the world’s third
largest ethanol producer, and third in
sugar cane production.
Malaysia is the world’s leading
palm oil exporter, and produced
about 200 million liters of biodiesel
in 2006 from it, serving mostly
European biodiesel stations.
India, a distant second to Brazil’s
dominance in world cane growth,
had states agree in October to a 10
An international agreement in which 36
An employee works on Rig 754 in Kaplan, for Grey Wolf Drilling Co. on Oct. 8.
“Petrobras is now constructing
two major pipelines through the
country for ethanol,” said Roberto
Ardenghy, superintendent of fuel
supply for the Brazilian National
Marcelo Min/ Agéncia Fotogarrafa
percent ethanol mandate starting in
October 2008. It’s expected to help the
country’s troubled sugar mills find
additional profit.
Countries in Africa’s rainfall belt,
such as Angola, Zambia and
Mozambique, have the best potential
to grow high-yield crops suitable for
ethanol or biodiesel.
India also produced its first com-
mercial batch of biofuel from sweet
Saturday, Nov. 3, 2007
Claudia B. Laws/claws@theadvertiser.com
Petroleum Agency. “We make so
much ethanol here they need
pipelines going from major produc-
ing areas to the shores, so we can
export ethanol to the world.”
U.S. Ethanol Imports by
Country (millions of gallons)
Country
Brazil
2005
31.2
2006
434
Costa Rica 33.4 35.9
El Salvador 23.7 38.5
Jamaica 36.3 66.8
Trinidad & Tobago 0 24.8
Total 135 653
Source: Renewable Fuels
Association
sorghum stalks this summer.
Farmers can get sweet juice from the
stalk for biofuel and still use grain at
the top for food, doubling their
income on a crop that’s cheap to grow.
Manufacturers like Dedini don’t
need the world market just yet
because Brazil’s ethanol growth con-
tinues to boom. Brazil’s 4.5 billion
gallons in 2006 (No. 2 behind the U.S.)
is expected to double by 2013.
As of June, 369 ethanol mills were
operating, 44 were being built, 59
were approved projects and 232 were
in early planning as investors predict
increased exports, Olivério said. By
2010, 472 ethanol mills may be operat-
ing in Brazil.
“But this is going to produce
enough (ethanol) only to feed the
internal market, because flex-fuel
cars are growing so much,” Olivério
said. “And no one in Brazil will think
to build a plant without talking to
Dedini first.”
Using the Caribbean
Some of the fastest ethanol devel-
opment has been in the Caribbean
and Central America. The U.S. has a
free-trade agreement allowing 7 per-
cent (268 million gallons) of U.S.
ethanol consumption to be imported
tax-free from this region.
In 2006, 206 million gallons of
ethanol came into the U.S. from
here, but much of it was originally
Brazilian. Many ethanol plants
being built there, backed by
Brazilian investment, simply dehy-
drate Brazil’s ethanol and send it to
the U.S. to mix with gasoline.
For U.S. refineries and fuel sta-
tions on the East Coast, buying
Brazilian ethanol via the Caribbean
is often cheaper than shipping corn
ethanol from the Midwest.
It’s a loophole to get around a 54-
cent-per-gallon tax the U.S. places on
imports straight from Brazil. The
tax protects U.S. ethanol producers
from being undercut by cheaper bio-
fuels, and keeps Brazilian ethanol
from being subsidized in a way by
U.S. taxpayers.
At least nine dehydration plants
in the Caribbean are running or
planned, Olivério said, and Dedini
has made four. Brazil’s ethanol
exporters think the U.S. tax, which
may expire in 2010, is at most a vio-
lation of free trade, and at least a
barrier for the U.S. to reach renew-
able fuel minimums by 2017.
“Everyone believes that with
your own production, the U.S. can’t
reach Bush’s goals,” Olivério said.
Saturday, Nov. 3, 2007 The Daily Advertiser • 7

Where cars run on sugar cane

Consumers get
more options in
flex-fuel economy
SÃO PAULO, Brazil — When Eulair
Deberaldini glances across the lot of a
Rede Papa fuel station, he sees the differ-
ence between choice and dependence in
how much cash drivers fork over to fill
their tanks, and smiles at his flex-fuel
Chevy Vectra.
“This car to fill with alcohol is $50
Brazilian real, compared to $100 real for
gasoline,” Deberaldini said through a
translator. “Fuel choice is very impor-
tant, and flex-power saves me money.”
Americans like to talk about choice
at the fuel pumps, but Brazilians are liv-
ing it.
Almost all of the 34,000 fuel stations
in Brazil offer álcool (100 percent
ethanol) or gasolina (itself a 25 percent
ethanol mix), and since flex-fuel cars
took off in 2003 drivers can mix and
match any amount they wish. It’s a
given most consumers will favor
ethanol, which was $1.04 per liter to gas’
$2.27 when Deberaldini stopped to fill up
in August.
Choice leads to trust
Brazil’s 30-year effort to develop
ethanol as a viable alternative to gaso-
line took a huge leap forward four years
ago, when automakers introduced flex-
fuel vehicles.
Before that, Brazilian carbuyers had
already been burned by an ethanol
boom that went bust in the 1980s, and
were reluctant to invest in cars that used
only ethanol.
Volkswagen, Ford and General
Motors developed a computer chip
smart enough to sense whether gasoline
or ethanol was in the tank, and could
adjust the engine’s air intake.
Consumers jumped at the chance to pick
and choose which fuel to use.
Now, eight of 10 new vehicles in
Brazil are flex, and by 2013, flex-cars are
expected to be 50 percent of all light
vehicles in Brazil.
“Here it’s about people valuing the Photos by Marcelo Min/Agéncia Fotogarrafa
price of the fuel in a price of the car,” (Top right) Eulair Deberaldini chooses the green álcool pump at Rede Papa fuel station in São Paulo. (Right)
said Maroio Demenis, manager of
Mechanics prepare an older car for a flex-fuel adaptor kit at TecNolvel auto repair shop in São Paulo.
Itacolomy Vehicles, a Chevy dealership
in São Paulo city. (Above) Assembly-line workers build nearly all flex-fuel vehicles at a General Motors plant in São Caetano.
“The market has changed like 100
percent, now all the new cars we sell are distributed by pipelines, but ethanol online. “Saab came here to learn to develop bit of gas from that to start if needed.
flex. … And for two similar used cars, must move by rail or truck right now to “It just depends on what bang the this, two to three years ago,” said “The consumers are doing it not
flex and non, the flex will be about $1,500 avoid water in pipes it could absorb. customer is looking for,” Berken said. “If exactly because they want a flex-car,”
Adhemar Nicolini, general director of
more because of demand.”
Louisiana’s first E-85 pump opened they’re only looking for mileage then GM Powertrain in Brazil. “They started shop owner Florinaldo Quinino said,
Flex grows in U.S. in Sulphur this July at Pumpelly Oil yes, gas is better. But if they’re looking from advice we gave them.” “but because of the fuel prices.”
Company, not enough yet to fuel the at all the advantages — environmental, In Boise, Idaho, Alex Conger has
Detroit automakers have produced
120,000 flex-fuel vehicles in the state. less reliance on foreign oil, better for
Helping old cars flex been giving the same fuel-flexibility to
about 6 million flex-fuel vehicles in the
U.S. since the mid-1990s. You may be They’ve built a strong following with E- your engine — taking all those benefits Brazilians who can’t afford a new flex U.S. drivers for two years, based on a
driving one but not even know it. The 85, said Ashley Berken of Pumpelly, into account, that $1.95 can be up to $2.55 vehicle can pay the equivalent of converter he and partners bought in
technology went into pickup trucks and even if pricing it about 20 cents cheaper or so.” U.S.$440 to convert their gasoline engine Brazil.
sedans just to meet quotas for environ- than gas now isn’t enough to cover the Current U.S. flex engines aren’t tak- to flex. “We figured we can either reinvent
mental credits. energy gap. ing full advantage of ethanol’s mileage At TecNolvel auto repair shop in São technology or we can go with the guys
But pushed by rising gas prices and Ethanol burns cleaner in the engine and performance benefits. Researchers Paulo, mechanics attach a microproces- who’ve been doing it for 20 or so years,”
global warming news, leaders of GM, and has higher octane, giving your car and big automakers are looking at sor the size and shape of a laptop’s said Conger, owner of Full Flex
DaimlerChrysler and Ford vowed this more horsepower, a main reason the advanced combustion systems to help power adapter under the hood. It’s International.
year to double production to about 2 mil- IndyCar series switched to E-100 for its engines better burn the biofuel. mounted between a car’s computer and About six companies market flex con-
lion cars a year by 2010 — 20 percent of races this year. Swedish automaker Saab, a branch of fuel cylinders, with wires connected to verters in the U.S. that can be installed
their planned production. They even say But high mixes like E-85 get fewer GM, has made a BioPower concept car to each injector to adjust air based on the in practically any car, he said. With
half of all their cars could be flex if the miles per gallon than gasoline because run on up to E-100, just like Brazilian fuel it senses. prices ranging from $250 to $500, Conger
fueling infrastructure were in place. ethanol has about 30 percent less energy. flex-cars. It has double the horsepower of Brazil’s álcool has a small amount of has sold about 4,000 units in Europe and
Access to ethanol is still the main For the equal miles-per-dollar, if unlead- a current U.S. flex, burns ethanol more water that on cold days could freeze. So a the U.S. A few warranties and misin-
problem. There are currently 1,326 E-85 ed gas costs $2.75, E-85 should be about efficiently and has a smaller engine to plastic gas reservoir the size of a softball formed mechanics are the biggest obsta-
stations in the U.S., of 170,000 total. Oil is $1.95, according to some fuel calculators cut the car’s overall weight. is added near the engine, which sucks a cles to flex-converter popularity, he said.

The other alternative fuel — biodiesel

Soybeans, animal fat, dirty cooking
oil and sunflowers are just a few sources
for biodiesel — the oft-ignored but more
prolific brother of ethanol.
It’s the only biofuel Louisiana cur-
rently makes en masse. Two years ago, 2
percent of the U.S. soybean crop went
into biodiesel; this year, as much as 12
percent is estimated.
This no-hassle biofuel mixes at any
amount with petro-diesel, and burns in
engines with few or no modifications
needed. Biodiesel can be transported in
pipes while ethanol can’t, and has 3.2
units of energy for every one unit used
to make it.
But the main feedstock for biodiesel
— soybeans — is a food first. Its rising
world price has made U.S. and Brazilian
investors second-guess their biodiesel
plan.
State law is a draw
“The biodiesel in Louisiana has
taken off like wildfire with all our farm-
ers and loggers, and fortunately in
America,” said Darrell Dubroc, presi-
dent and chief operating officer of
Allegro Biodiesel’s plant in Pollock. He
built a Louisiana biodiesel market from
scratch, serving trucking fuel stations in
Alexandria, Ville Platte, Shreveport,
Houston and even exports to Europe.
Biodiesel sold in the U.S.
2000
2004
2005
2006
25 50 75 100 125 150 175 200 225 250
(millions of gallons)
Source: National Biodiesel Board
“Most of our personal cars are gas, gas infrastructure,” said Jeff Trucksess,
and in the U.S. maybe 10 to 15 percent of executive vice president of Houston-
light vehicles on the road are diesel,” based Green Earth Fuels, which awaits
Dubroc said. “In Europe, it’s more like 40 permits for a New Orleans plant.
percent, mostly Volkswagens. Biodiesel “Louisiana has that. It has the agricul-
is a more superior product to ethanol.” ture, it has the vegetable oil infrastruc-
There are 165 biodiesel plants operat- ture, so we think it’s one of the prime
ing in the U.S., and 84 under construc- areas of the country.”
tion or expansion. Allegro’s Pollock Dubroc said Allegro has already hit
plant opened in April 2006, and two more that mark, but U.S. biodiesel faces the
plants are in planning or construction same costly hurdle as ethanol: Reliance
phases near New Orleans. on food-crops with a rising price.
All were drawn to Louisiana by a 2006 Booming Asia demands more soy,
state law mandating the 2 percent mix of and the Midwestern corn rush has
biodiesel in all diesel sold here, once pro- boosted soybean’s market price for next
duction hits a benchmark. year to $9 or $10 per bushel, up from the
“From a logistics standpoint, our $5.50 farmers made in recent years.
position has been for this to go main- So biodiesel made from soybeans
stream it has to integrate into the oil and has become increasingly less economi-
cal. But one small Brazilian town may
have found a solution.
‘A slice of the whole’
From the depth of a farm crisis one
year ago, Lucas do Rio Verde, a town of
35,000 in Brazil’s Mato Grosso state, is
primed to bounce back with a multi-
pronged industrial attack that’ll fuel
cars, animals, people and the economy.
The nation’s largest biodiesel refin-
ery should open here this fall, making 32
million gallons per year and using
500,000 tons of soybeans from central
Mato Grosso.
Alone it wouldn’t profit much due to
the high price of soybeans. But to cut
costs and maximize profit, three indus-
tries in the soybean food chain have
been brought together here by local gov-
ernment and business leaders.
A crushing mill will squeeze out the
soy oil, just 18 percent of the bean, send-
ing that to the fuel refinery and the left-
over meal to huge barns to feed chicken
and hogs. A new slaughterhouse will
turn those to meat, at a rate of 500,000
chickens and 7,000 hogs per day.
“There isn’’t one other spot on the
whole planet that has put all of this
together in such a synergistic fashion.
Biodiesel is just a slice of the whole,”
said Kory Melby, a consultant for U.S.
agribusiness investors, who moved to
Mato Grosso four years ago from
Minnesota.
Other incentives
Brazil’s mandated mix of 2 percent
biodiesel kicks in soon, and 41 plants are
expected to make twice as much from
soy oil as the nation needs. With another
40 plants proposed, a mandated 5 per-
cent-mix in 2010 would still leave 80 per-
cent more biodiesel than needed.
Soy oil’s high demand would price
Brazilian biodiesel at $2.20 Brazilian
real per liter, when regular diesel now
sells for $1.80.
“It’s not smart now; you got to be stu-
pid to make (biodiesel) from soybean
oil,” Melby said. “Our food chain is tak-
ing priority.”
Brazil’s biodiesel future is turning
toward non-food sources like jatropha, a
bean animals won’t eat that’s heavy on
oil, requires little water and grows in
almost any environment.
Science is also coming to the rescue.
U.S. researchers are developing soy-
beans with twice as much oil, Dubroc
said. But they’re most excited about
algae, growing it near smokestacks to
eat pollution fast enough to make 16
times the biofuel in a year
as corn.

• Go to theadvertiser.com/ethanol for photos and more information on the ethanol industry in Brazil •
8 • The Daily Advertiser Saturday, Nov. 3, 2007

TIME FOR CHANGE By Bob Moser

After spending two weeks in São
Paulo, Brazil, in early August, I
boarded the plane for home feeling
like a million bucks.
The country was beautiful, the
food was fresh, and the pride I
found Brazilians took in their peace
and relative self-sufficiency was
refreshing.
I got back to Lafayette and sank
from this high fairly quickly. News
that first night of more war deaths,
rising oil prices and the woes of
local farmers were like weights
around my neck, pulling me back
down into a day-to-day reality we’ve
come to expect and accept in the
U.S.
I admire Brazil for seeing in 1975
that energy independence was
worth the hassle of subsidies and
uncertainty to build an ethanol
industry from scratch.
Seeing and reading about suc-
cess with alternative energy else-
where in the world has drawn my
patience thin for progress here at
home.
A “can-do” attitude toward bio-
fuels, solar and electric-hybrids
over the next decade would be nice
to see in U.S. automakers and
energy companies.
Now it’s exciting to see the U.S.
Congress possibly boost the renew-
able fuels mandate in a new Energy
Bill. It could require fuel refiners to
blend 36 billion gallons of ethanol
into gasoline by 2022, ensuring
demand long enough for investment
and ingenuity to give American-
made ethanol some firm legs to
stand on.
Comparing the U.S. and Brazil
certainly isn’t apples to apples.
Differences in climate, culture and
government allowed Brazil to
become a biofuels success story
fairly quickly, and it’s important for
reporters like me to point this out.
We may make mistakes with
ethanol, fuel cells or electric vehi-
cles along the way. Brazil took 30
years to get all its ethanol ducks in
a row. I hope this series will give
readers some perspective to see that
maturation of alternative energy in
the U.S. could be worth the growing
pains.
Bob Moser covers business, regional
growth and agriculture for The
Daily Advertiser. Contact him at
bmoser@theadvertiser.com.

ABOUT THE TEAM

ABOUT THIS PROJECT
Bob Moser
A 23-year-old reporter with The Daily Advertiser
since September 2006, Bob traveled throughout São
Paulo state of Brazil for the first two weeks of August
on a World Affairs Journalism Fellowship adminis-
tered by the International Center for Journalists, and
funded by the Ethics and Excellence in Journalism
Foundation. He can be contacted at bmoser@theadver-
tiser.com, or at (337) 371-3362.
Arnessa M. Garrett
A 37-year-old senior
editor/news for The Daily
Advertiser, Arnessa managed the
planning and design of this proj-
ect. She has worked in Lafayette
for five years and in print journal-
ism for 15, with previous stints at
The (New Orleans) Times-
Picayune, and The Boston Globe.
Marcelo Min
A 38-year-old photojournalist
from São Paulo, Marcelo co-owns
Agéncia Fotogarrafa, a freelance
news photography agency. Before
starting the agency two years ago,
Marcelo worked for newspapers
and magazines in São Paulo for 11
years. His work can be viewed at
www.agenciafotogaraffa.com.br.
Ursula Alonso Manso Dutra e Silva
A 35-year-old freelance journal-
ist living in Rio de Janeiro,
Ursula assisted Bob with appoint-
Garrett Min Dutra e Silva
ments and translation in
Piracicaba and Ribeirão Preto.
She worked as a reporter and edi-
tor for a newspapers in Rio for 12
years before switching to free-
lance writing and assisting for-
eign reporters in the past four
years.
Anna Flávia Rocha e Silva
A 25-year-old reporter for an
energy trade magazine in São
Paulo, Anna assisted Bob with
appointments and language trans-
lation in São Paulo and
Piracicaba. She has studied for a
Rocha e Silva Johnson
semester at Colorado College in
Colorado Springs, and worked as
a reporting intern for Scripps
Howard News Service in
Washington, D.C., before starting
her journalism career in Brazil.
Bram Johnson
A 27-year-old graphic designer,
illustrator and co-owner of
WORKagencies, a design firm in
Lafayette, Bram designed the logo
for The Daily Advertiser’s ethanol
series, and laid out the pages of
this section. Bram’s work can be
viewed at www.workagencies.com.

• Go to theadvertiser.com/ethanol for photos and more information on the ethanol industry in Brazil •