Print

Email story

Comment

Email editor

Ethanol: Is it the answer?

In Brazil, drivers can pay $4 a gallon for gas -- or they can plunk down half that for homegrown fuel. And the most popular new cars accept either one.

By DAVID ADAMS
Published October 17, 2005

	[Times photo: David Adams]
	Antonio Castro and girlfriend Daniela Fausto shop for a flex-fuel VW Gol at Morumbi Motors in Sau Paulo, Brazil. They hope to save money. "What could be better?" Castro said. "You get to decide what fuel you put in your car." What is Ethanol? Ethanol, or ethyl alcohol, is a high-octane liquid fuel produced by a fermentation and distillation process that converts plant starch to sugar and then to alcohol. At its most basic, ethanol is grain alcohol, produced from crops such as corn. It can be produced from a variety of sources, including sugar cane, sugar beet, wood and vegetable wastes. Brazil vs. United States: BRAZIL: The world's largest producer of ethanol, produced from sugar cane. No regular gasoline sold at the pump. All gasoline is blended with at least 24 percent to 25 percent ethanol. Almost all fueling stations in Brazil, 29,000 out of 31,000, also offer the choice of 100 percent ethanol. Some stations also offer natural gas. UNITED STATES: The world's second-largest producer of ethanol, made principally from corn. Some states, mostly in the Midwest, offer gasoline with a 10 percent ethanol blend. Approximately 600 gas stations, out of 176,000, offer E85 fuel, a blend of 85 percent ethanol with gasoline. Florida does not sell any ethanol blended gasoline to the public. The state is building its first ethanol plant in Lakeland. Facts and Figures: Alcohol is a less efficient fuel than gasoline. A car gets 30 percent fewer miles per gallon on a tank of 100 percent ethanol. This is more than compensated for in Brazil by its lower price and higher engine performance, including better acceleration. Ethanol is currently blended into about 30 percent of the U.S. fuel supply. U.S. government tests have shown that E85 vehicles reduce harmful hydrocarbon and benzene emissions. Transportation accounts for 65 percent of U.S. oil consumption and is the predominant source of air pollution. Brazil currently has the most ethanol-powered vehicles. At one point, the numbers approached 5-million vehicles but today the number is between 3-million and 4-million. In 2004, the use of ethanol reduced the U.S. trade deficit by $5.1-billion by eliminating the need to import 143-million barrels of oil. Since 2000, American ethanol production has increased 109 percent. The U.S. imports 64 percent its petroleum needs. By 2025, the Energy Information Administration projects the United States will import 77 percent of its petroleum. The new energy law passed in September requires the gradual blending of renewable fuels like ethanol and biodisel into the nation's fuel supply. The ethanol industry is required to raise production to 4-billion gallons in 2006 (from 3.5-billion today), rising to 7.5-billion gallons in 2012, when the ethanol incentives are set to expire. Although ethanol blended fuels are not commercially available in Florida, both E10 and E85 is used by some government vehicle fleets in the state, including the city of Jacksonville, MacDill Air Force Base and the Kennedy Space Center. Manufacturers with models that are E85 compatible: Daimler Chrysler, Ford, General Motors, Isuzu, Mazda, Mercedes, Mercury, Nissan. E85 Compatible Cars As of the end of production of Model Year 2005, there are approximately 4.5-million E85-compatible vehicles in America. However, according to 2004 figures, only 146,195 of the more than 4-million E85 flex-fuel vehicles on the road were sold specifically as alternative fuel vehicles. Sources: Renewable Fuels Assoc., Ethanol Facts, U.S. Dept. of Energy, National Ethanol Vehicle Coalition, New York Times, Sao Paulo Sugercane Agroindustry Union. On the Web: U.S. Dept. of Energy Renewable Fuels Association EthanolFacts.com National Ethanol Vehicle Coalition Ethanol Promotion and Information Council
	Michael McCallan lowers the price of ethanol last month at the fuel station he manages in San Diego. The station is one of fewer than 600 that sell ethanol in the United States.
	[AP photo]

SAO PAULO, Brazil - Antonio Castro, a 25-year-old physiotherapist, is feeling the pinch. Gasoline prices in Brazil recently hit $4 a gallon.

Castro is not worried.

Last weekend he and his girlfriend, Daniela Fausto, went shopping for a new "flex-fuel" car able to run on gasoline, much cheaper alcohol, or any mixture of the two.

Flex-fuel cars are all the rage in Brazil where they have captured the new car market since they were introduced in March 2003.

"It's a smashing hit," said Castro, in a break from negotiating to trade in the couple's 5-year-old gasoline-powered Volkswagen Gol for a new 2005 Gol TotalFlex.

"What could be better?" he said. "You get to decide what fuel you put in your car."

The freedom Brazilian consumers enjoy now is the result of a difficult choice made three decades ago, years before Antonio Castro was born, when Brazil was still under military dictatorship.

The generals boldly led Brazil down a path no other country had explored, substituting home-grown ethanol, a form of alcohol distilled from sugar cane, for costly foreign oil. The plan suffered early pitfalls as an entire country was forced to adapt to a new fuel and unproven technology.

But today Brazilian consumers are delighted to find themselves ahead of the times - and many first-world economies - as the country finally reaps the rewards of its ethanol revolution.

Because of decades developing alternative fuel, Brazil, a country larger than the continental United States with a population of 186-million, boasts an infrastructure of 29,000 gas stations that offer everything from 25 percent ethanol-blended gasoline, known as "gasohol," to straight alcool (pronounced alko-oll).

This means huge savings for Brazilian consumers. Alcohol costs on average about half of gasoline, selling for barely $2 a gallon. Car buyers also receive an annual tax credit on alcohol cars, which have cleaner tailpipe emissions.

Brazil is now almost impervious to the instability of gasoline supplies that has bedeviled the United States in the aftermath of two massive hurricanes and the war in Iraq.

Gas pump prices seem stuck around $3 a gallon, but most U.S. drivers have little choice beyond regular, unleaded or premium.

"There is a lot we can learn from Brazil. They are doing great things," said Gal Luft, an alternative energy advocate at the Institute for the Analysis of Global Security, a think-tank in Washington, D.C.

* * *

The 1973 Middle East oil embargo brought Brazil to its knees.

Unable to afford oil imports, the military dictatorship imposed rationing. Pumps were closed on weekends as Brazilians were told to forgo family outings.

"It was extremely dramatic," recalled Eduardo Carvalho, president of the Sugar Cane Agroindustry Union, who was head economic adviser to the Brazilian finance minister at the time. "We had no money to pay for all the imports we needed to run the country, starting with fuel."

To cut costs, it decided to blend its gasoline imports with ethanol. After a second oil shock caused by the 1979 Iranian Revolution, Brazil moved to an ethanol-only car.

The early technology wasn't great.

The new engines were hard to start in cold weather. But the kinks were gradually smoothed out, and by 1985 more than 90 percent of all cars produced in Brazil were designed for alcohol.

"It was a fantastic thing," said Carvalho. "We substituted for gasoline on a continental scale."

But alcohol failed to compete with petroleum over the long run because of falling oil prices in the 1980s and 1990s. Brazil's state oil company, Petrobras, also discovered new offshore oil fields, making Brazil 80 percent self-sufficient in gasoline.

A drought, which led to a poor sugar harvest, disrupted alcohol supplies. Brazilians got fed up and reverted to traditional gas guzzlers. Production of alcohol cars slumped by 1997 to 0.06 percent of factory output - a mere 1,075 vehicles.

When gasoline prices began rising again in the late 1990s, Brazil's ethanol car concept was re-energized. But something had to change to satisfy consumers worried about wild price swings.

"I urged a compromise solution on behalf of the consumer where our energy needs were not in the hands of the Arabs or in the hands of the sugar producers," said Francisco Nigro, director of the Institute for Technological Research at the prestigious University of Sao Paulo, who helped promote the concept. "It was time to break the chain of gasoline or ethanol."

The compromise was called flex-fuel. The customer would no longer be forced to search for a specific type of fuel. Motorists could fill their tanks with any blend of gasoline or ethanol they chose, depending on which was cheaper, or more convenient, on any given day.

Brazil wasn't alone in the search for a more "intelligent" engine. Other countries and several U.S. states had passed laws mandating fuel blends to reduce emissions.

Ford Motor Co. began testing flex-fuel technology as early as 1984. General Motors quietly introduced its version to the North American market in a 1992 Chevrolet Lumina. Ford followed the next year with a special Taurus. But production was limited to a few thousand vehicles a year. With ethanol not widely available in the United States, it made no sense for automakers to produce more. Even so, manufacturers stood to gain tax credits if they met federal guidelines. Consumers were left in the dark.

"It's a chicken and egg situation," said Nick Twork, a Ford spokesman. "We brought the chicken, but where's the egg?"

In 2000, a team of Brazilian engineers eventually came up with their own flex-fuel engine, which took the technology a step further. Using complex sensor software they were able to precisely calibrate the engine performance according to the fuel mix, which could be as high as 100 percent ethanol.

"It worked perfectly. It was incredible," said Fernando Damasceno, 48, a member of Brazil's Society of Automotive Engineers, who headed the team.

But their innovation was met with a mixture of skepticism and indifference. Car manufacturers looked to the government for fiscal incentives to compensate for investing in the concept.

To mark its 50th anniversary in Brazil, VW decided to test the new software on its popular Gol model, a four-door hatchback. The first car, a Gol TotalFlex, came out March 24, 2003.

It was an instant success.

Soon all the major car manufacturers in Brazil - Fiat, General Motors, Ford, Peugeot and Renault - followed suit. VW says by next year it will be producing only flex cars in Brazil.

"The flex technology is excellent," said Luciano Feirreira, a 34-year-old Sao Paulo notary, who last month bought a GM Astra 2.0L Flexpower. "It consumes a little more but it costs half the price to fill the tank."

Recently, Feirreira spent 50.02 reis ($22.30) to fill up his car with just over 11 gallons of E75 (75 percent ethanol) at a Sao Paulo filling station. At the next pump, industrial engineer Milton Jungman, 47, grimaced as he forked over 121.85 reis ($54.30) for 13.47 gallons of E25 for his 2001 GM Zafira van.

"It hurts, but I have no alternative," Jungman said. He planned to trade in the car for a new flex model as soon as he could afford it.

Flex-fuel car sales are up 30 percent at Morumbi Motors, a large VW dealership in the heart of Sao Paulo. Though they cost a few hundreds dollars more than gasoline models, customers are looking to save fuel costs.

"We hardly have to explain anything," said sales manager Jorge Silva. "Everyone knows what flex is. It's become part of our way of thinking."

* * *

Most American drivers don't know it, but their cars are already equipped to run on at least a 10 percent blend of ethanol.

Car dealers don't advertise it, but the information can be found in car manuals and is often printed on the inside of the gas tank flap. An estimated 4-million newer vehicles - mostly SUVs, such as the Ford Explorer - can also run on E85.

Some states, including Iowa, Minnesota and Colorado, already either mandate ethanol blended fuel or provide tax incentives to retailers and consumers. Ethanol fuels average anywhere from 10 cents to 30 cents a gallon less than regular unleaded.

The United States has 88 ethanol plants with a capacity of just under 4-billion gallons a year, a shade less than Brazil. That is a drop in the bucket compared to U.S. demand for gasoline, which is around 140-billion gallons a year.

It will take some time before U.S. motorists enjoy the same fuel flexibility Brazilians have today. Currently, fewer than 600 of the country's 176,000 gas stations sell ethanol.

"In order for E85 to take hold, you have to have gas stations and cars that can handle it," said Iowa Gov. Tom Vilsack, chairman of the Ethanol Coalition of Governors. "It requires Detroit to build cars, which they are beginning to do."

Last month Ford announced it was stepping up its production of ethanol vehicles for the North American market to as many as 280,000 cars and SUVs in 2006, including the F-150 truck and Crown Victoria, Grand Marquis, and Lincoln Town Car sedans.

"Ethanol is typically cheaper than regular gasoline and we're going to do all that we can to support it," president Bill Ford told employees in Dearborn last month.

"In addition, we are working with fuel providers to expand the infrastructure needed to provide ethanol. And we're going to actively engage customers so they will understand that they have (flex-fuel vehicle) options."

But the United States still faces many obstacles. Unlike Brazil, which produces ethanol from sugar cane, the United States relies on corn, which is a far less energy efficient source.

There's also no infrastructure to transport ethanol around the country.

"It's just not there right now," says Matthew Klein, a consultant at the Energy Information Administration in Washington, D.C.

Plans to build Florida's first ethanol plant, in Lakeland, were announced earlier this year. For now, the nearest place to buy ethanol is in South Carolina.

* * *

Meanwhile, the quest for oil independence continues in Brazil.

Last year Damasceno's team won Ford's 2004 Henry Ford Technology Award for their contribution to flex-fuel research and development.

Not content with flex-fuel, Damasceno's team is now working on a new trifuel project, to try to add natural gas to the flex-fuel mix.

As for Nigro, the Sao Paulo researcher, he still drives a 3-year-old gasoline-powered Toyota Corolla, which he is very happy with. Last month his family's second car - an old alcohol-only 1994 Ford Royale - was stolen.

He laughs at the irony that his own work promoting alcohol may be to blame.

He says his next car will be a flex-fuel model.

--Times researcher Caryn Baird contributed to this report. David Adams can be contacted at dadams@sptimes.com

[Last modified October 17, 2005, 06:33:02]