TGIF AGAIN READERS!
This week has really flown by. High school football tomorrow night and college football all day Saturday. Our LSU Tigers will be playing Auburn Saturday at Auburn at 6:00 pm CST on ESPN. This will be LSU's first test in SEC play this season. Odds makers have LSU heavily favored........we'll see. Auburn is 1-2 so far this season, barely squeaking a win over UL Monroe last weekend in OT. If LSU does not make a lot of mistakes, they should easily beat Auburn.
I've mentioned before that Brazil is the largest producer of ethanol next to the US. Their ethanol is made exclusively from sugar cane while US ethanol is made exclusively from corn. Due to huge increases in corn prices, it is likely that the US will be importing ethanol from Brazil this year since it can be imported into the us (without the tariffs that existed prior to 2012) at a cheaper price than can be produced in the US due to such high corn prices. Here's an article on the US/Brazilian relationship in the ethanol business.
"Pete"
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U.S.
and Brazil: At last, friends on ethanol
Brian Winter,
Reuters | September 17, 2012
After years at each
other's throats, Brazil and the United States are working together to promote
the use of ethanol in a collaboration that could revolutionize global markets
and the makeup of the biofuel itself.
The breakthrough came in January when Washington allowed a three-decade-old
subsidy for U.S. ethanol producers to expire and ended a steep tariff on
foreign biofuels. The tariff, in particular, had poisoned diplomatic relations
between the world's top two ethanol-producing countries for years.
Since then, industry executives and government officials from both countries
have seen tangible progress in efforts to boost the production and consumption
of ethanol around the world, they told Reuters.
The two nations have been lobbying foreign governments to create new markets in
Africa and Latin America, planning joint "road shows" to attract new
investments in biofuel companies, and pushing for a uniform global standard for
ethanol, which could make it easier to trade the biofuel across borders.
Results may still be years away, but officials say the collaboration might
breathe some new life into an industry facing an uncertain future because of
chronic production shortfalls and doubts about the environmental benefits of
many biofuels.
"I think there's a clear sense now that we should be collaborating instead
of fighting each other," said Terry Branstad, governor of Iowa, the top
U.S. ethanol-producing state.
After a July meeting with senior officials in Brazil, "I was very
encouraged by what I heard," he said in an interview. "The more we
cooperate, the more we can grow the worldwide demand for what we
produce."
Plinio Nastari, the head of respected Brazilian sugar analysis firm Datagro,
said he was particularly encouraged by the joint efforts to develop additional
ethanol producers.
Because Brazil and the United States account for about 85 percent of global
ethanol production, one-time events like the current U.S. drought can cause
wild swings in supply - and prices.
"That holds up ethanol from becoming a widely traded commodity,"
Nastari said.
Many of the ideas for collaboration date back to a 2007 bilateral agreement
signed by previous Brazilian and U.S. governments. Yet progress was slow until
this year as diplomats and other officials often spent time hashing out
disputes instead of finding ways to work together.
"Unfortunately, the tariff issue made it impossible to move forward on
many of these (subjects)," said Geraldine Kutas, head of international
affairs for Unica, Brazil's main sugar cane industry association. "The
conditions are right, now. This is the moment of truth."
THROUGHOUT THE TROPICS
The most promising effort is also the one that has shown the most visible
progress: trying to get countries in Central America, the Caribbean and Africa
to produce and consume more ethanol.
Officials from the U.S. Department of State, Department of Energy and the
private sector, and their Brazilian equivalents, have been working together to
convince other governments of ethanol's benefits.
"We're trying to show other nations what ethanol has meant for our
economies," Iowa Governor Branstad said. "In our state, it's helped
boost our farmers' income and reduce our dependency on foreign oil. Those are
ideas with a lot of appeal."
Sugar cane, the main source of ethanol made in Brazil, already grows in many of
the countries seen as potential producers of the biofuel.
Cane produces more energy than it consumes during the ethanol-making process,
unlike corn, the basis for U.S. ethanol.
Homegrown ethanol holds obvious appeal for small, poor countries that import
most of their energy at enormous costs. Honduras, for example, spent $2.1
billion - 12 percent of its gross domestic product - on fuel imports in
2011.
However, producers and other investors generally refuse to build ethanol mills
and other infrastructure unless they have a guaranteed domestic market.
"And implementation of that framework gets to be very technical and
difficult," Unica's Kutas said.
One example: In the 1980s, Guatemala passed a law mandating a blend of ethanol
in gasoline but has rarely enforced it because of bottlenecks that include a
separate law capping the amount of the sugar cane crop that can be used for biofuels.
To resolve such problems, the Brazilian and U.S. governments have helped
finance and produce studies of the countries' ability to create and sustain
ethanol production. Honduras, Guatemala and El Salvador are where the most
progress has been made, diplomats say.
"We have deep contacts in many of these countries, but the Brazilians have
the expertise on sugar," said a U.S. official who requested anonymity
because the negotiations are politically sensitive. "When we work
together, as we have been lately ... it's pretty powerful."
THE NEXT FRONTIER: CUBA?
Brazil and the United States have stepped up their lobbying in recent months.
Pilot ethanol programs to introduce the biofuel to consumers with blend
requirements are set to begin in three countries, starting in Honduras by early
2013, another U.S. official said.
To accelerate the process, Brazil and the United States are planning
presentations in coming months to attract new investors interested in biofuel
projects in the three countries, officials said.
Brazil's growing diplomatic clout has been critical to opening doors in
countries where the nation has deep strategic or cultural connections, such as
Senegal, Mozambique and Haiti. And it is uniquely equipped to exert influence
in Cuba.
Cuba's once-mighty sugar industry has deteriorated in recent decades under
communist rule, but Rice University economist Ron Soligo has said the country
has the potential to become the world's No. 3 ethanol producer behind the
United States and Brazil.
While Washington has had little diplomatic contact with Cuba in the past five
decades, Brazil has a tradition of warm political and economic ties with the
Caribbean nation. President Dilma Rousseff visited Havana in January and spoke
of how Brazil can help Cuba develop its economy.
Large-scale ethanol production has been largely taboo in Cuba, in part because
former President Fidel Castro has denounced it as a "sinister" idea
that drives up global food prices. Yet some Brazilian officials say that stance
could change dramatically once the 86-year-old leader withdraws from
politics.
"Everybody knows that Cuba is an ethanol bonanza waiting to happen,"
said a Brazilian official who requested anonymity. "We'll be
ready."
MERCANTILE EXCHANGES
Separately, Brazil and the United States are addressing obstacles that have
prevented ethanol from becoming a globally traded commodity like oil.
The only ethanol futures trading on the Chicago Board of Trade are for the
U.S.-produced corn variety. As a result, U.S. companies that buy Brazilian
ethanol must often do so through brokers or purchase complex forms of insurance
to limit their risks - all of which make deals more expensive.
The sticking point: Brazil requires higher purity levels for ethanol than the
United States does. This lack of a global standard has created a host of other
problems, such as delays in the development of universal flex-fuel cars that
can use either ethanol or gasoline.
But officials from both countries said technicians had made substantial
progress toward a common standard in recent months.
"We're very close now," a U.S. official said, adding that the focus
of negotiations has now moved to Europe, where the talks have been more
contentious.
At the same time, a flurry of U.S.-Brazil collaboration has taken root in the
private sector as companies try to create more-efficient biofuels from a
variety of sources and with more uses.
Brazil's cane-based ethanol is seen as a more fertile ground for innovation,
while U.S. companies have more resources for research and development.
U.S. plane maker Boeing Co and Brazilian counterpart Embraer announced plans
last October to build a research center for developing biofuels for
aviation.
Renewable fuel made by Emeryville, California-based Amyris Inc powered a
demonstration flight by an Embraer jet at a big United Nations environmental
conference in Rio de Janeiro in June.
Solazyme Inc is involved in the Pentagon's biofuel efforts. The South San
Francisco, California, company broke ground on a 100,000-tonne sugar-to-oil
facility in Brazil in June as part of a joint venture with agriculture group
Bunge Ltd .
Brazil and U.S. officials have been brokering frequent introductory coffees and
dinners to match up companies from the two countries.
"The Americans seem to be here almost every week," said Adhemar
Altieri, a spokesman for Brazil sugar cane association Unica. "We're
hearing almost as much English as Portuguese around here these
days."
Joint efforts may also be forming to increase academic and research
collaboration on biofuels.
Debi Durham, an economic aide to the Iowa governor, said that after returning
from Brazil, she contacted the president of Iowa State University to encourage
the school to admit more Brazilian students in the sciences - a priority of
Rousseff's. (Additional reporting by Leonardo Goy and Reese Ewing; Editing by
Lisa Von Ahn)
