Brazzil

Are the authors aware that Cosan, as part of its recent stock offering, was originally designating $100 million in proceeds for mechanization related to its sugar and ethanol operations? The cost advantage
of Brasilian ethanol is not related to the availability of cheap labor; it relates primarily to the higher energy content of the related feedstuff - sugar - compared to the corn-based ethanol produced in
North America. Finally, there are not an unlimited number of available cane cutters in Brasil. That is why producers are already having to go to great lengths to import labor from the Northeast into
their operations in the Center-South. And, this movement of population to where the job opportunities are greater is of course central to lifting the desperately poor out of their current plight. Is not
this just the way that Lula initially advanced himself?

1A) Brazil has 6,3 millions hectares in sugarcane for 2006.....not 10,3 millions ! And eventually 8 millions hectares in 2008...from other sources ! but it wont be the case
http://www.brazilcham.com/defa...02_id=212

1B) There are not 336 sugarcane plantations in Brazil......but 336 ethanol/sugar....MILLS !

2) Before harvesting.....sugarcane fields needs to be burn offs.....creating pollution....!!!!!!
Just think about 6 millions hectares on fire.....every year !!!!!

3) Sugarcane harvesting is still mostly done...MANUALLY ! Yessssss 55 % in the most developed SP state is hand harvested, meaning far more in less developed states !
"Approximately 45% of the present harvest has been done by harvesters in the Central-South region; up 5% from the last harvest as reported by União da Agroindústria da Cana (Unica)."

4) Funny that by producing over 500 millions tons of sugarcane, Brazil HAS NOT INVESTED MUCH MONEY for mechanical harvesters.
Most harvesters HAD to be developed by foreign firms such as John Deere.
This just shows how backward Brazil is TODAY and how NON interested they are in iinvesting and at reducing their own poverty !
Most of your sugarcane is still harvested as it was 200 years ago !
What a lazy country !

5) Brazil is criticizing the US corn ethanol production, for all the various reasons well publicized by Brazilians ! Right ?
So why will Brazil use 15 % of their total SOYABEANS for biodiesel production by 2010 ???? Quite stinky your arguments !
So why will Brazil ALSO produce ethanol from corn...when you are saying that ethanol from sugarcane is so much more
profitable ??????? Even more stinky....your arguments !
"Increased amounts of soybeans and sugarcane as well as corn will go to the production of Ethanol over the next three years and will represent more than 50% of rural revenues. By 2010, 15% of the soybean harvest and 61% of sugarcane will be used for Ethanol"

6) If you are overall bullish on Brazilian agriculture, you should buy shares of FOREIGN firms, producing GMO seeds, pesticides, fongicides, tractors, sprayers and harvesters, trucks for the transportation of all these stuffs !
fACT BEING YOU PRODUCE VERY LITTLE OF THEM.... !

7) Did you also know that most of your fertilizers are IMPORTED ??????

Facts being that the agriculture INPUTS manufacturers mentionned above are producing with very HIGH profit margins, and that Brazil produces the agricultural products...WITH VERY LOW PROFIT MARGINS !!!!!!

Conclusion : VIVA BRAZIL! You should triple, quadruple, quintuple your agricultural productions !!!!!! And idiots Brazilians should better read regularly specialized medias publishing FACTS AND REAL NUMBERS....such as :
http://www.brazilintl.com/index.htm
instead of writing things you have no idea about it except what the Bin Lula The Liar and His Gang can so easily have you to swallow !
You may also watch Globo Rural videos....you have hundreds available.....and see by yourselves.....how NOT SO ROSY....the conditions of your farmers are !

Yesssss read and learn and dont only listen to ther fairy tales you are accustomed to !!!!!!!

Enjoy your filthy country, continue to stay blinds and ignorants, it is certainly better than the sad reality !

Ohhhhhb Conceicao, did you that a sugarcane harvester cost US$ 500'000.- ????? Just think about how many you will need for your 8, 10 or 15 millions hectares of sugarcane you will have in the next several years ?????
Certainly well well over 10'000 in the next several years even in the most unlikely event that ONE harvester can harvest 1200 hectares !!!!!!!
What a Bonanza for ALL the inputs manufacturers and sellers !!!!!!!

laugh.....laugh....laugh !

and what about the state of your transportation infrastructure for these hundreds millions of tons to be transported in non paved roadways, or DEpaved roadways with millions of potholes and limited warehousing ????????
That is great for the foreign trucks manufacturers. You will have to change more often the trucks and use far more spare parts !!!!!

Isnt it ??????

LAUGH....LAUGH....LAUGH !!!!!

Wasn´t the criticism of the USA that the 54 cents tariff was hurting Brazil? Didn´t the government want it to end? And now that it may end, abestados achando ruim?

See if you can get it together for once.

Your article was thought provoking.Me being in energy sector in India, a brief question to you:

Is it worth investing in Brazil´s Ethanol project?

...If you really are in energy sector in India, YOU should know that India is one of the largest Brazilian ethanol importer !!!!!

Hmmmm...strange question from a knowledgable expert !

http://www.patentstorm.us/pate...ption.html

The present invention relates to a self propelled harvester that tops, cuts, cleans and loads "whole stalk green sugar cane".

The universal practice of burning the sugar cane fields as an operation before harvesting, was a means of easing harvest tasks and to remove the dry, non sugar-carrying botanical components. The modern outlook on trash has changed significantly: (a) their pre harvest removal is not needed nor desired; (b) such biomass "trash" burning is desired in the furnace, not in the field; (c) trash removed that can be solar dried should be separated and left on the field for a later pickup after a few days; (d) the dewatered trash does not need to be milled and should be managed independently once separated from the whole cane; (e) though trash is important and contributes materially to the total whole cane harvest, its management must be rated at a lower priority than the whole cane harvest; (f) the overriding concern is to harvest the greater possible quantity of biomass having the highest possible quality of lignocellulose feedstock; (g) it is a low grade fate for lignocellulose trash to be burned in boilers along with humid bagasse; (h) total biomass rather than sucrose is the ultimate goal and this fact should not be lost from view.

.....IF AND WHEN Brazil will have 100 % of their sugarcane fields MECHANICALLY HARVESTED !

NOT FOR TOMORROW AND NOT FOR AFTER TOMORROW !

Look at your own stats.

And as I said almost all harvesters will be made by foreign companies.

A true long term BONANZA for foreign firms not Brazilian farmers !
Worse yet......only large farmers will be able to mechanically harvest not small and medium farmers WHO WILL NEVER EVER ABLE TO AFFORD THE PRICE OF A MECHANICAL HARVESTER....IN VIEW OF THE PRICE TAG OF US$ 500'000.- per harvester and going higher and higher every year ! While sugar and ethanol prices are just...plumetting !!!!!
This doesnt include yet the the costs of trucks needed to load sugarcane at the fields and unload at the mills...costs/investments that must be assumed by...the farmers....not the mills.


Therefore burn offs will continue for decades to come...MINIMUM !!!!.

Do your own maths :
1) How could a small to medium Brazilian farmer ever borrow and repay such HUGE amounts....in a country with the world highest interests rate....after inflation ????? Ohhh and also pay the fuel needed...which is very high in Brazil when compared with other developing nations. AND EVEN MORE EXPENSIVE THAN IN THE USA !!!!!

2) Here is the production capacity of a mechanical harvester :" The average daily throughput of a harvester in a 24 hour period is between 500 and 600 tonnes" OR LESS THAN 10 hectares ASSUMING THE HARVESTER IS USED 24/24 since Brazil production is at 75 tons average per hectare...NATIONWIDE !!!!!

3) Brazil is so backward in sugarcane production, knowing Australia (simple example) is already 100 % mechanized...since 1979...and 40 % at best in Brazil....in 2007 !!!!!!!

AES....FEEL FREE TO COME BACK IN THE FORUM WITH YOUR LATEST NEWS NOT LIES OR DREAMS....WHEN BRAZIL WILL HAVE 100 % OF THEIR sugarcane mechanically harvested.....and when small Brazilian farmers earning only a few thousands reals per year...will be able to borrow US$ 500'000.- to 1 million or so, for the sprayer, tractor,, loading/unloading wagons and harvester ! Ohhh this is by using smaller products than the ones in the large farms ......of course !

And AES......have you not been able to figure out yet......the countrIES patents rankings per 100'000 capita....based on the numbers....YOU PROVIDED ?????


laugh....laugh....laugh !

ch.c, I'm enjoying your contributions to these debates; you seem very knowledgeable on the subject. Please get in touch via the e-mail address supplied (edward.moore@gmail.com).

Best wishes,
Edward.

PREDATOR CANE CUTTER

Prices range from $46,000 for a small unit by VICRO to $250,000 for a John Deere


Predator Cane Cutter http://www.canecutter.co.za/Costs.html

Cost of Unit: U.S.D. $45960 For Durban Harbour - S Africa

Hydraulics carry a one year warranty.
Hydraulic Filters, Piping and couplings are locally procured.
Cutting Blades are locally manufactured.

The patents produced in the city of Boston or the patents produced in the city of San Jose Silicon Valley exceeds the nonsense of your 100,000 statistical argumentation. These are two cities that patents per 100,000 makes a mockery of your skewed Swiss red herring.

Australia's production is 9% of Brazil's production. Mechanization is manifestly easier to implement in such a small operation.

PRODUCTION METRIC TONS OF SUGARCANE
1 Brazil 420,121,000
2 India 232,320,000
3 China 88,730,000
4 Thailand 49,572,000
5 Pakistan 47,244,100
6 Mexico 45,126,500 F
7 Colombia 39,849,240
8 Australia 38,246,000
http://www.fao.org/es/ess/top/commodity.html?lang=en&item=156&year=2005

ch.c,

you bring up very valid points, however, you are criticizing the authors on issues they are not writing about. with the exception of your first two points on factual errors regarding sugarcane land and plantations, you are writing on domestic topics that are not covered in this article.

A substantial amount of the equity in independent or smaller capacity ethanol producers in the U.S. Midwest are owned by corn farmers. Quite similar in structure to traditional cooperative or farmer-owned
grain elevator storage businesses. Similarly, equipment rental businesses are prevalent, down to the level of a farmer buying a harvester and renting it out to neighboring farmers who do not want to or are unable to undertake the capital outlay involved. The obvious lesson for Brasil is that a strong injection of capitalist profits into the sugar/ethanol sector - just as would be provided through the
elimination of the discriminatory 54-cent tariff - would underwrite the kind of farmer-level entrepreneurial development which would largely eliminate over a short period of time the supposed barriers to mechanization in the sector. The reinforcing back-end of all of this is that investment in ethanol production provides a natural hedge for the sugarcane farmer, i.e., when the price of sugar drops, the
profits from ethanol production rise. This natural hedge is the magic bullet that can transform the traditional misery associated with Brasilian sugar production into opportunity for the poor and/or
marginal participants in the Brasilian sugar industry - if only the U.S. would eliminate the idiot tariff the overall effect of which only harms the average U.S. citizen.

an exact representation of economic truth, kudos.

Hmmmm...strange question from a knowledgable expert !

Excuse me Mr.Ch.c., I never claimed that I was a knowledgeable expert. I am just a junior clerk in a firm that develops alternative source of energy. I was asking the authors if it was worth investing in land in Brazil to cultivate sugar cane.

Joao,

Even though you haven't posted on this story yet, I am sure you will read it.

Since you seem to be one of the few people in this group with a level head, I thought you might enjoy this article from today's NYTimes...it is tangentially related.

http://www.nytimes.com/2007/08/28/science/28biop.html

É, gente, o ch.c não tem jeito... tomara que ele consiga comer alguém (ou ser comido, sei lá) um dia pra sair dessa frustração em que se encontra.
Ou alguém acredita que ele realmente toca 400 milhoõe de dólares tendo esse inglês de Zé-ruela dele?
Pra mim tá muito mais provável ele ser um bronhaman recalcado porque tomou um fora de uma brasileira gostosa....

Fique quietinho.Estou lendo o comentário do Michael William. O teu dever de casa é ler aquele artigo do NYTIMES, que foi indicado por ele. Esquece Ch.c, que é um pentelho e não sabe o qué é "Strategic Planning".Deve ser um Office Boy do USB.

Hi Mike,

Thanks for your comment addressed to me. Yes, I did read this article and I did not want to delve on it,because I have known about the Ethanol program of Brazil since 1978. In fact, I was one of the first ones to buy a Ethanol run car,in 1980. Made by Ford. Most of us knew that the pump price was subsidized by the government. After almost 30 years, Ethanol is in lime light again, as an alternative source for running the automobiles. Of course, the government wants to project its image as the saviors of the world and the "Usineiros" in the North East all want to profit. Sugar Cane cutters are what you call "collateral damages". They are going to go in for mechanized harvesting (please do read the postings of our friend AES.Though he is well meaning, the sugar cane cutters are going to remain poor and ILLITRATE). This is my personal opinion and I have no intention of getting into any discussion with anybody, including the authors of the article.

Coming back to the article in Nytimes, yes, I already know about the case of Marc van Roosmalen.This again proves that we dont want any interference from any scientists,be foreigners or Brazilians. I do admire and respect Marc, for his principles and the courage. But, he is in the minority,because as I have mentioned before, the Brazilians place "Education" as 6th or 7th in their list of priorities. I dont know if you have read the comments of Shelly (just on the quality of education in Brazil and how much the Doctoral degree holders get paid. Discard the anti American tirade of hers!). She makes lots of sense.

Mike, though I am not in the field of education, I know quite a lot about how things function at the university level. In the 1970´s lots of foreigners came to this country and contributed to the education ( I mean Graduate and Doctoral levels). Some went back,some remained and some died. There are plenty of Brazilian educators who were trained by them,here or at their base universities.But when they are considered to be "enemies of the state", how do you expect Marc Rooselmann to be treated,considering that he is a foreigner?

Thanks for listening to my rants,but you asked for it . Lets hear what the "Brazilian Dude" has to say about my comments.

Ohhh and also pay the fuel needed...which is very high in Brazil when compared with other developing nations. AND EVEN MORE EXPENSIVE THAN IN THE USA !!!!!

Nearly twice as expensive, and get more expensive everyday. But hey, I just love to watch those petrobras commercials that brag, "somos autosuficiente em petroleo!" So what, who gives a s**t if it's gonna cost you six dollars a gallon!

written by conceicao, 2007-08-28 14:36:35

if only the U.S. would eliminate the idiot tariff the overall effect of which only harms the average U.S. citizen.

Now wait a minute. The tariff the U.S. gov't. has been imposing on ALL sources of energy is MINUTE in relation to the rest of the countries on planet earth......SPECIFICALLY BRAZIL!!! This isn't a "one-way" street conceicao. I just love it when people act as if the U.S. gov't. should be the f**king Red Cross and not give a f**k about how the other players of the game are going about their business. Fair is fair! Business is a two-way street. You got to give to receive!!

Even if you accept the notion of energy self-sufficiency as an ideal, the reality is that the U.S. has to import energy resources now and into the future to maintain its current level of consumption. Given the need for these
imports and the primary source of these imports , it does not make sense to discriminate against a potentially significant alternative source from a friendly nation in our own hemisphere. The corn-based ethanol industry in the
U.S. is largely the creation of political influence peddlers and likely is not even viable on a stand-alone basis given cheaper alternatives like sugar-based ethanol and the reality that corn-based ethanol may consume more energy in production and transportation to market than it provides to the end user. The primary stupidity of the tariff is that the supply of Brasilian ethanol will inevitably be soaked up domestically or by developed country economic
rivals to the U.S. The U.S. needs to act now to lock up long-term supply agreements with Brasilian producers - something that is available now because the Brasilian industry needs export profits to build itself out. It is not a
balance of trade issue. It is an issue of trading market access now for supply access far into the future. Plus, the delivered cost of Brasilian ethanol to the U.S. Gulf is around two-thirds of that available from U.S. producers.

Joao,

My understanding was that Marc Rooselmann had become a naturalized Brazilian citizen and should have been treated as such in the court system. Amazing that he got 16 years. Anyway, the age-old conspiracy theory that Gringos are out to take over the Amazon seems stronger than ever...even if they are NGOs working on scientific efforts to help protect it.

As for Shelly, yes I have had some exchanges with her previously. I always find it interesting when people feel the need to constantly list their credentials and degrees rather than let their writing stand on its own merit. It is especially interesting to read her posts on the Globo site where she seems to adopt a somewhat different persona and actually does more Brazil bashing than U.S. bashing.

With regards to the ethanol issue and debates over tarriffs, clearly sugar-based is more efficient right now. But there is sooo much investment capital flowing into ethanol from Silicon Valley and so much entrepreneurial activity in the alt.energy field that it is just a matter of time before private industry develops the enzymes and technologies to convert corn much more efficiently. The U.S. has a super long history of protecting the struggling sugar industry we have. I am not in favor of these barriers, but the sugar lobby is very powerful here. Also, don't count coal out. There are more BTUs under the ground in Wyoming than in Saudia Arabia....lots of work being done on clean coal.

My understanding was that Marc Rooselmann had become a naturalized Brazilian citizen and should have been treated as such in the court system. Amazing that he got 16 years.

Mike, Marc was being treated exactly like a natulalized citizen,a foreigner with permanent residency here or a born BRAZILIAN.Anyone who fights against the "Establishment" regardless of their nationality,color,religion,etc; is bound to get into trouble.Remember what happened to Larry Rohether of NYT, not too long ago. I really dont know why Marc decided to naturalize himself.May be he needed this citizenship for a tenure track job in a Federal University . I really dont know. But someone classified him as a trouble maker and sentenced him to 16 years of prison, though I think he is not going to serve it. He can always go back to Netherlands.Not worth fighting against the "Establishment", though I think it is a noble cause and he has lots of guts.

As for Shelly, yes I have had some exchanges with her previously. I always find it interesting when people feel the need to constantly list their credentials and degrees rather than let their writing stand on its own merit. It is especially interesting to read her posts on the Globo site where she seems to adopt a somewhat different persona and actually does more Brazil bashing than U.S. bashing.

Shelly is a nice person,but I think she has one leg in Europre,another across the pond and heart in Brazil. Remember she was born Carioca of Dutch heritage. I dont know why she and her husband didnt feel too comfortable in U.S. May be they have their own reasons. I hope they feel good in Netherlands,when they move there in a few months.

With regards to the ethanol issue and debates over tarriffs, clearly sugar-based is more efficient right now. But there is sooo much investment capital flowing into ethanol from Silicon Valley and so much entrepreneurial activity in the alt.energy field that it is just a matter of time before private industry develops the enzymes and technologies to convert corn much more efficiently. The U.S. has a super long history of protecting the struggling sugar industry we have. I am not in favor of these barriers, but the sugar lobby is very powerful here. Also, don't count coal out. There are more BTUs under the ground in Wyoming than in Saudia Arabia....lots of work being done on clean coal.

Ok,Mike, you have done your homework, as I have done. Remember the history? During the WWII, South Africa was able to produce gasoline (petrol) out of coal? They also have a huge piece of land to produce Ethanol out of corn,sugar cane ,among other things! It is an interesting country too and closer to the other richlands of Africa.

You a Chemist or a Chemical Engineer? Would be interested in knowing,provided you want to reveal!!

btw, I enjoyed the last paragraph of your post and couldnt believe that somebody has the same thoughts as mine. I know what is going on in the Silicon Valley.

Thanks and take care.

Fair is fair! Business is a two-way street. You got to give to receive!!

Quote of the week, lad.My apologies for not having complimented you earlier

I know it´s not a direct comparison, but a barrel of crude from Canadian oil sands can be extracted for twenty dollars whilst it costs an average of one hundred dollars to produce a barrel of ethanol. I think ethanol is a fad. I think the USA should drop the tariff, import from Brazil, put American farmland back into food production, and see how this plays out. In Brazil the extent to which the interests compete would indicate that this cannot be a long term project. The labor issue, the preservation issue, the political issue, financial interests, have in some cases diametrically opposed agendas.

I think the USA should drop the tariff, import from Brazil, put American farmland back into food production, and see how this plays out. In Brazil the extent to which the interests compete would indicate that this cannot be a long term project.

Ric, you make lot of sense when talking about the cost of Canadian crude oil.However, you have been long enough in Brazil to know that all the exports are one way or other subsidized by the Brazilian consumers. Look at the Soy beans, which are not staple diet for the Brazilians,but export commodity. The orange juice has become a rare thing also for domestic consumers. The milk price also has gone up quite a bit. My contention is that huge surge in Ethanol export will drive up the its price at the pumps here in Brazil. We have gone through this exercise before and I am sure you remember it.

I thought that Michael William is also talking sense.It is worth analysing what he says, especially about coal and corn. My question: Why are the Japanese car manufacturers in Brazil so slow in making Flex cars?

Been away on business...
Back to the fray.
Sugarcane harvesting will never attain more than 60% in Brazil.It is not a question of cost, or of having cheap labor, or whatever.The problem is actually basic and non-alterable.
It's called "terrain".
Mechanized land vehicles (irrespective of function - caras,buses,harvesters,tanks) operate within physical parameters which dictate their srtucture and cost. Thus, a snowmobile will be quite apt for arctic exploration, but will fail miserably in cross-country rallye races, despite being well-made and expensive.
The more encompassing your parameters are, the more costly and complex a vehicle is. Therefore, in the interests of cost-effectiveness, one has different vehicles for different parameters.
Automation in agriculture is only possible in flat, even terrain. Building machine to operate in varying inclination, varying soil hardness, and wavy terrain is possible, but would render the vehicle prohibitive in cost and complexity.
The only areas which have had a large boom in productivity are the ones that fall onto those standards: the american midwest, the brazilian central-east, southern and southeastern regions, etc.
About 40% of the area used for sugarcane plantation is uneven and hilly.That means it has to be harvested by hand.Period.

I meant "MECHANIZED sugarcane harvesting will never attain more than 60% in Brazil".

The ethanaol barriers can only be understood in the context of the 200 year protectionism of the U.S. sugar industry. U.S. agricultural lobby is unbelievably strong in Washington.

I agree in part with Ric regarding ethanol. Fad might be a bit strong, but I agree that it is over hyped - ethanol is no end-all-be-all silver bullet. I think it will be part of a broader energy solution for the future which will rely on various sources such as nuclear, coal, as well as biofuels. As for Canadian petrol, the U.S. was also extracting oil from shale in Colorado in big way in the 70s. There is a lot of it so it is a matter of time before that becomes cost effective as well.

Joao, I am in no way an engineer. Used to be in tech so I have a number of friends in the venture capital world...most of whom are far more informed than I am.

The idea for oil self-sufficency was brought up by the military in the 60's as part of a strategic planning initiative that saw Brazil as if it were an army, with the same logistic necessities.It was part of a much wider vision which intended to set up the country's infrastructure in such a way as to be less subject to international variations in supply of basic necessities (those were the days of the cold war).
The program was stepped up after 1973, when the oil crisis brought about by the OPEC hikes in price and their decrease in production.
The concept was that even if the price of domestically produced oil were higher than what came from overseas, at least it could not be used as an economic weapon against the country (a lesson from world war II, in which Germany was defeated due to logistics alone.As soon as Hitler lost the oil fields in Africa and was unable to reach the Russian oil fields, he was doomed.That lesson has been forgotten both by Europe, which is nowadays hostage to Russia's Gazprom, as well as by Bin Lula, which put our country hostage to Bolivia, fer christ's sake!).
The massive cash infusions Petrobrás received to develop what is now the world's most advanced deep-sea drilling technology came only because the initial idea was not profit, but strategic logistic structuring of the country.
Other initiatives were taken which were ultimately abandoned(nuclear,for example).
The ethanol project came into being for the exact same reasons, and was initially subsidized as a strategic development sector.

When Bin Lula went all over the media to proclaim the country's supposed self-sufficiency on oil, he was careful to not mention that Petrobrás only attained its present technological proficiency due to military strategic plannig, a kind of long-term view which he simply does not have.
Ever since he came to power, Petrobrás has been nothing but a political asset to be used,a cash cow to be milked.He is unable to understand what makes the company tick, and has put inept political appointees as its president.
The supposed self-sufficiency is exactly that:just supposed.The numbers were distorted by mens of several biased technicalities to give him the political triumph of posing as the president in whose term the dream happened.
Alas, it is not so. The country is not very far from it, but if all of a sudden the external supply ceased, we'd be subject to severe rationing and shortages.Our production doesen't quite cut the mustard yet.
An still, petrobrás agreed to be used in that campaign...a very low point indeed in the history of a once-serious company.
On a battlefield, wishfull thinking gets you (and your mates) killed.
Since Bin Lula has never been in uniform, he should at least read a bit more.
But I guess being functionally illiterate precludes him from that.

At the moment, ethanol is economically viable only due to subsidy.
HOWEVER:
Oil is finite, and its price will not go anywhere but up. Eventually, ethanol will reach the break-even point with oil, but not necessarily due to better yields or an increase in efficiency and diminishing costs; but due to the rise of the price of fossil fuels to even higher levels.
That might happen in ten years, or tomorrow.
The problem is more one of strategic logistics than of business.
Most of the world's oil is located in a powder keg called the middle east.
If the region destabilizes to the point of Israel being attacked with WMD's, they will retaliate in kind using their 200-plus nuclear devices they have dilligently stockpiled.The region will become one large,glowing, vitrified parking lot.
Oil production from there would obviously cease.
Non self-sufficient countries in oil production or in alternate energy souces would be royally f**ked.
If you have enough oil in your country, you can, as a strategic decision, keep the prices down for home consumption.
If you don't, what you import will have to be bought on international prices.And in a crisis situation in the middle east, those prices would (already have before...) skyrocket.
Ethanol is not a fad.At the moment, it is not economically interesting.But it is a strategic asset.
Economic viability will inevitably follow.Oil is finite.

Right. Oil is finite. At the same time, Brasil has both comparative advantage in agricultural and availability of uncultivated fertile land that no other country can possibly replicate. Just seems logical to
me that helping and encouraging Brasil to build out profitably its ag and related sectors like gasohol production has to be good for everyone in the long run. "Unilateral disarmament", so to speak, would
be the best policy for the U.S. and E.U. as regards any issues relating to existing barriers to Brasilian ag exports, including the U.S. tariff on sugar-derived ethanol.

The U.S. will not lower tariffs for precisely the same reasons we started this ethanol thing in the first place: Strategic asset self-sufficiency.They are already held by the balls by the arabs, and want to escape that bond.They are interested in establishing independence from any foreign country in relation to fuels.That includes us.
They f**ked up in letting themselves become the arab's symbionts.Saudi Arabia OWNS the U.S.They are not willing to do so again with us or anyone else.
And if I were in their shoes, I wouldn't either.
They are willing to subsidize their industry until it takes off so as to not be susceptible to foreign pressures.
The question here is not economical.It's strategic.

is also incredibly powerful.They control Florida (which is now nothing but the sugar industry's refuse dump) and their revenue funds a lot of campaigns.
At the moment, they are simply untouchable.

Is it true that the Saudis are guaranteed gold and not just greenbacks for their oil? And, has anyone ever studied the theories of Dr. Thomas Gold in terms of hydrocarbon generation being a constant and not just the result of biomass deposits in the past?

Brazilian Dude,

Saudia Arabia owns the U.S.? That is perhaps the most naiive statement I have heard in this forum. The only reason the current Saudi tribal government exists is because the U.S. allows it to. They are the U.S. puppets, not the other way around. The Saudi regime is very replaceable and they know it. They are owned by the U.S. and by proxy, Israel. Did you happen to see the announcement of the 20B arms sale to them a few weeks ago? Israel backed that.

I am not saying I approve of the relationship. It is a dirty business, but that is the reality. Do you actually think for one second the Saudis have any real power? Sure, they have nice yachts and are good at executing infidels but P'LEASE, they are no Russia.

The biggest driver of oil price increases in the past decade is not increased U.S. consumption but increased demand from China.

The reason the Arabs/Persians are such a perceived threat right now is because of 70 oil. It may take some time, but coal and bio will eventually become feasible and then see how much influence the arabs have.

Check out how many U.S. assets are in Saudi hands, as well as U.S. bonds. They have been buying everything of the U.S. that they can, exactly because they know the House of Saud is just a tool for the U.S. What they have achieved as aresult is a type of "dead-man trigger", in which they can severely damege the U.S. if they go down.
Symbiotic interdependence.
Or, having each other by the balls.

There is enough coal in the USA to supply all its energy needs including fuel for transportation, for somewhere between 500 and 1000 years.

Welcome back from your black-op.Quite an essay you wrote about this topic and my kudos.

And if I were in their shoes, I wouldn't either.
They are willing to subsidize their industry until it takes off so as to not be susceptible to foreign pressures.
The question here is not economical.It's strategic.

Somehow or other, Michael William,you and me seem to share the same thoughts.Why should U.S. lift the tariff for the Brazilian Ethanol, when they investing to develop economically viable aleternative fuel. Michael William´s posts are very informative regarding this. Besides, all his negotiations with U.S. government have not resulted in the desired end result. ie. removing the tariff.One interesting thing to observe is the technology to produce Ethanol out of sugar cane is not new,like the technology to extract Gasoline out of coal. It is a question of economic vyability.

Also, I keep on wondering why, the U.S., owning the third largest oil reserve in the world now (Iraq),should start manufacturing Flex automobiles? As you said, it is a question of long term strategy. In the short run, there are benefits, like keeping Chavez in check, our Prez making the sugar cane cutters happy, our "usineiros" getting richer,etc;

Nobody remembers the golden days of Rubber making the few Barons very rich

Had never heard of Thomas Gold until you mentioned him...My knowledge of geology is far too poor to even have an opinion on the man's theory (of which I just read a summary).I'll have to do a good bit of research to produce an even half-informed comment...
Can anyone help?

As for the saudis having "power" , I tend to agree with the classic definition: "to have power over something is to have the ability to destroy (or severely damage) that thing.".
The saudis have spent the last decades infiltrating themselves in the financial system to be able to do just that.
It's not only their oil any more.

What good is a bunch of politicians in both Brasil and the U.S. beating their chests about energy self-sufficiency when the result is a lower standard of living for everyone? Could there be a better
example of the need for the "political entrepreneurs" to get out of the way and let the market work? If the Saudis et al have so much control over the U.S., then please explain why the eyes of Pakistan's
foreign minister were bugging out after 9/11 like Pele's were after Leonardo got thrown out of the U.S. / Brasil World Cup game in 1994? The point is that the U.S. can take the Saudi oil fields any time.
It is just to everyone's economic benefit to pay for the oil in an international free market. Why does not the same calculation apply to trade in agricultural goods, including ethanol?

They buy the bonds/U.S. securities because they are "encouraged" to. They have to do something with all the "petrol dollars" after all. It is convenient for both parties to invest back into the U.S. You are right that it is symbiotic in a sense because if they were to try and dump Treasuries they would hurt their best customer. But it is symbiotic in the way the relationship a Shark and a Remora are symbiotic, and the U.S. is not the small fish.

As for their other assets, the Saudis are not the smart money...the hedge funds and REITS have been selling the saudis for a while now...and they (Saudi Petrol $$s) are down. This conversation reminds me of when everyone was cautioning the U.S. that the Japanese were buying up too much real estate in the 80s

I agree with you that the U.S. is backed into a tough spot at the moment. This is due to China demand. However, the fact that mid-East oil has a little market leverage and "owning" us are two very different things.

If things were to get serious, you would see two things happen very quickly:

1. Massive financial, technological, and industrial resources in the U.S. would be applied to develop alternative energy sources very quickly.

2. The U.S. military would leave no doubt as to who "owns" who.

The reality is that gas is still relatively cheap and most Americans are oblivious to the reality of energy markets, but if that were to change I think people who question the relevance of the U.S. would change their tune very quickly.

Would like to get in touch with you directly. As I mentioned before, I lived in RS from 01-03 and spent 6 months in both 04 and 05 but don't have many contacts outside of Porto Alegre.

BTW, my son's name is Joao.

Would like to get in touch with you directly

Please do feel free to send me a mail through flatbreadmann@gmail.com. This account was set up to honor a friend of ours in this blog. A great guy, who talks lots of sense.If he sees my comment,he would understand.

btw, Dude makes lots of sense too. Of course he is getting too old


Fellow bloggers, no hate mail,please

What good is a bunch of politicians in both Brasil and the U.S. beating their chests about energy self-sufficiency when the result is a lower standard of living for everyone? Could there be a better
example of the need for the "political entrepreneurs" to get out of the way and let the market work?

"political entrepreneurs" ? You just hit the nail right on the head! It is so boring to listen to them.They steal the ideas from others,have no balls to set up an enterprise,use their power to intimidae the real enterpreneurs by charging at least 20% on the quote of a project,etc;

Conceição, you got my blood pressure going up! We have examples of "political entrepreneurs" in our city and the state. So funny to hear their bulls**t,just like listening to our beloved Prez.

Joao, I ran across the phrase for the first time yesterday in the newspaper and could not wait to use it. I somehow knew when I posted it that it would hit a cord with you. What infuriates me about this
ethanol tariff issue is that a lot ot people in Brasil are working really hard, taking risks, etc to produce a solid product and the people really raking it in in the U.S. - including most obscenely
pocketing the actual tariff money that the Brasilian producers have to pay - are just sitting on their ass trying to dream up new ways to protect their "interests." All this stuff about Brasil becoming the Saudi Arabia of ethanol unless we maintain the tariff is just so asinine it is incomprehensible and yet we have presidential candidates reciting the same garbage. U.S. consumers pay higher prices at the pump
as a result.

Do take into account my age-old habit of being paranoid, and always asking myself"but are you paranoid ENOUGH?"
My point is that the U.S. have allowed the middle eastern states in general far too much influence over your country's well-being.A stupid,dangerous mistake brought about by greed and shortsightedness.
The development/implantation window in a concerted, rush-rush effort to bring alternatives to oil in line would not be smaller than 5 to 7 years. That is an awful long time to hurt.Other states, notably Russia( - yeah, the old bogey's back! Almost feels like old times!) are in wait to fill in the power vacuum.
As for the U.S. military keeping the area under control, that's a no-can-do.There are just too many reasons for that to be listed here, but it boils down to this:
levelling a country is easy for the high-tech war machine the U.S. has.But if you raze the area, goodbye oil production.
To keep the country producing, you need to damage it as little as possible and remain in control of the productive structures(that is, presuming the locals don't take a razed-earth attitude and blast everything on their way out).
To keep a country in control, you need to occupy it.That means boots on the ground.Manpower.Logistics.Equipment.Maintenance.Costs.
And deaths.Lots of them.
Occupation of hostile territory is VERY nasty business.Find some military or ex-military who's been there and ask him.
The U.S. military is at a low point in terms of manpower.
That is a result of a long time of misguided policy which attempted to substitute people for technology (not only in the military, but in defense/intelligence in general.Just think of the inbalance between ELINT and HUMINT which crippled the CIA).
It works for some things, but others are very people-intensive and people-dependent.
The only way to get involved in such an operation would be reverting to a full-scale war economy mobilization.The American Way of Life as you know it would be on leave.
In a nutshell, the U.S. military does not have the ability to occupy and control such a large area, so far away from home.(just the supply lines would be a major goatf**k).
Now, just to make myself perfectly clear, I am not anti-american.I believe the Russians,Middle east nuts, and Chinese are nasty customers, and that Brazil is a natural ally of the U.S.in a full-fledged face-off between east and west.
However, I do not have any delusions or wishful thinking about the west's vulnerability at the present moment.

Joao, I ran across the phrase for the first time yesterday in the newspaper and could not wait to use it. I somehow knew when I posted it that it would hit a cord with you.

Thanks for furnishing the new phrase "political entrepreneurs". I think it is the apt one to describe the Hyennas. In Portuguese, it would be "Emprendedores Politicos", unless the good old Dude wants to contest me!

Actually, we pay a lot more than the Americans for the gas and ethanol at the pumps. Bo raised an interesting point about Petrobras claiming that we are self suffecient in oil (and obviously ethanol also). If so, why should we pay so much to fill up our gas tanks. Of course, we all know that almost 50% of the price goes to the government as taxes.Just like CPMF. Disgusting.

"political entrepeneur" is like saying "friendly rapist"

I hear you and agree with most of what you are saying although a number of your assumptions are debatable.

Sure they are.I certainly do not profess to being THE expert on anything...
I am a "specialist in generalities"...comes with the job.
Most of what I wrote is verifyable information...do you have any friends in uniform? Pick their brains a bit. You'll find a lot of interesting info...

Yes, I have plenty of friends in uniform. I actually live about 5 miles from the Pentagon. I have friends who are very senior officers all the way down to grunts. Also know a lot of people in intelligence, think tanks etc etc. My old company developed the technology for the US DoD ID card as well as a lot of IT security and medical tech stuff, so we actually did a lot of business with all the branches of the military...both on the war fighter and admin sides. I was accepted to the Air Force Academy in Colorado Springs. While I did not attend, I went through the entire recruitment process (recruited as an athlete and qualified acedemically). My father served but doesn't talk about it....I never did.

The current military is not ramped up for counter-insurgency and its volunteer nature inherently means smaller numbers, but it is a mistake to think that if there were a real threat to American security that we couldn't fix a lot of these deficiencies. After all, as the Economist recently pointed out, while the volunteer numbers are low, the U.S. has the ability to put 1.1 million under arms in relatively short order. It is not politically viable for our politicians to talk about that now, just as it is not good politics for them to call on Americans to change their lazy, consumptive ways, but if the s**t really were to hit the fan things would change fast.

I believe then, we agree on the basic premise: for the U.S. to respond effectively to a serious threat, there would have to be major changes in american society and mind-set.In other words, a concerted war effort.
The economic consequences of such a radical about-turn in american society would be humoungous.That's what I meant when I said the american way of life as you know it would be compromised.
BTW, flyboy, the view from the dusty ground over which you birds fly is quite different.The poor infantry grunts which have to duck the opfor's rounds while keepin' those boots shiny find occupation hell on earth...
Nowadays, occupation means U.O. (urban ops, though I prefer the brit term - fish and chips - fighting in someone's house and causing havoc in people's streets... ), which used to be called MOUT (military ops in urban territory).
That is a singularly poeple-intensive, specialized job, requiring heaps of strenuous, expensive training.
Unfortunately, funding has been heavily siphoned off by sexy toys (blackhawks, pave lows,f-22's,mech cav, you name it), since they go down well in shows and allow a lot of pork to be passed around (the home states of those industries just love the pentagon...)
It's hard to make a nice video out of training exercises.Joe sixpack tends (my opinion) to prefer seeing big, fast powerful machines blowing s**t up.
The air force is moving towards UCAV's, and pretty soon the bonny blue boys will be jigglling joysticks far from the actual front itself.
But the nature of house-to-house remains the same.
It sucks.Big-time.
There weren't that many opportunities for that in Haiti...the country has little or no infrastructure to damage, so whenever the going got tough the armor and the demo crew would "persuade" the resistance fighters to lay down their arms...
But those that have had the chance of fighting in Rio's civil war (that is what it is) understand how hard fish and chips can be.
I hope to God your country wakes up to that before you have to deploy for a real-life large-scale engagement.It's gonna be a gagglef**k no matter what, but if you let your politicians make decisions without input from the mudfoots, things will get downright chaotic.
Leave it to the REMFS to f**k up every time.

"for the U.S. to respond effectively to a serious threat, there would have to be major changes in american society and mind-set.In other words, a concerted war effort."

I agree with you 100%. In fact, I believe the "U.S. way of life" has become absolutely ridiculous and that it should change regardless of any near term threat or not.

you are one in a thousand! All the U.S. needs for a turnaround is more clear-thinking types like you.
Hope it happens.