Jeb Bush encouraged brother to pursue ethanol

Published March 5, 2007

WASHINGTON - When Americans voted for George W. Bush in November 2000, they knew they were electing a man with deep ties to Texas oil.

But six years later, a greener-sounding Bush is about to depart for a trip to Brazil, where he hopes to forge a biofuels partnership that officials believe could revolutionize America's fuel industry and transform its relations with Latin America.

Critics suspect the president's biofuels conversion is only superficial, a late-in-the-day effort to build a less oil-splattered legacy. U.S. officials, though, talk of a new era of "ethanol diplomacy," capable perhaps one day of rivaling the petro-dollars muscle of the oil cartel countries.

"This is transformational policy," said Gregory Manuel, the State Department's international energy coordinator who has quietly shuttled between Washington and Brazil in recent months negotiating a biofuels cooperation agreement.

"Having the leadership of the United States ... in cooperation with Brazil, is the kind of DNA which spells great things for the world as we move toward alternative energy over the medium and longer term."

Such is the level of intensity that Bush and Brazilian President Luiz Inacio Lula da Silva will meet twice this month, a rarity for even the closest U.S. ally. After they meet Thursday in Brasilia, Lula will come on March 31 to Camp David, where the biofuels pact may be finalized.

'All charged up'

For years, Brazil tried in vain to persuade U.S. officials of the merits of ethanol, which had made the largest country in South America virtually energy self-sufficient.

"The price of oil for a long time didn't compel," said Donna Hrinak, U.S. ambassador to Brazil from 2002 to 2004. She recalls Brazil raising the issue in 2003. "Our response was 'We are working on the hydrogen car. We are happy with that and we'll see you later.' "

That began to change with the emergence since 1999 of Venezuela's Hugo Chavez, who is using his country's vast petroleum reserves to undermine U.S. influence in the region.

Bush got a taste of that firsthand in November 2005 when he attended a regional summit in Argentina that was marred by anti-U.S. riots stoked by Chavez.

On his way back from the summit, Bush stopped in Brazil, where he got a much warmer reception. Lula invited him to his country home, known as Crooked Creek Ranch, for a relaxed barbecue.

"It was a very good, cordial meeting, lots of smiles and a warm atmosphere," said John Danilovich, U.S. ambassador to Brazil from 2004 to 2006, who was present. "There's a real rapport between the two men."

A leftist former union leader, Lula might not seem Bush's natural ally. But he is big on biofuels. He keeps a display in his office of feedstock samples and the fuels they produce. Bush and Lula have grown so close that they regularly speak by phone, often outside office hours.

At the barbecue, Lula asked his agriculture minister, Roberto Rodrigues, to make the case for biofuels to the Americans.

Rodrigues spoke for an hour.

"How is it that humanity built a civilization upon fossil fuels, a finite substance that is poorly distributed around the world?" he said. "It makes no sense when we have a renewable liquid that can be produced by almost any country."

The Americans listened intently, he said. "President Bush had lots of questions. So did Secretary Condoleezza Rice."

Bush returned to Washington "all charged up" on Brazilian biofuels, recalls Allan Hubbard, the president's chief economic adviser.

"When he got back he grabbed me and said 'Hubbard, what about this, what they are doing with ethanol down in Brazil?' " he said.

A letter from Florida

White House staff had already done some work on biofuels, but nothing had gone as far as the president's desk.

"We've been working on it for a while. We didn't actually start presenting it to the president until after the (November 2006) election," Hubbard said.

In the meantime the president received a letter from his brother in Tallahassee. Florida had taken a beating from the 2005 hurricane season, sending gas prices soaring. The governor's contacts in Miami were touting Brazil as a model for energy independence.

Jeb Bush wrote to his brother in April, urging the president to implement "a comprehensive ethanol strategy for our country and our hemisphere."

Rather than buy oil from hostile nations such as Venezuela, which supplies about 12 percent of U.S. petroleum needs, Jeb Bush said the United States ought to buy biofuels from friendly countries such as Brazil and Colombia, as well as Central America and the Caribbean.

Jeb Bush was already deep in talks with the Brazilian ethanol industry about a joint partnership. In December, two weeks before leaving office, he co-founded the Interamerican Ethanol Commission to promote regional production. Rodrigues, who gave President Bush the biofuels lecture, was a co-signer.

'Ludicrous number'

In his State of the Union address in January, President Bush surprised many by setting a goal of 35-billion gallons of annual biofuels consumption by 2017, a sevenfold leap from current capacity. While the United States hopes to achieve most of that processing domestic corn and other plant material, Bush said imports would also be required.

Since January, Bush has been on a tear, visiting biofuels labs in North Carolina and Delaware. He hosted a hybrid car demonstration at the White House.

Last week, Bush led a panel of biofuels scientists at a leading enzymes company. Bush chatted knowledgeably about the science of ethanol and new technology to make it from nonfood crops.

"I am passionate about this subject," he told the audience.

But Bush's exuberance over ethanol may not be enough to persuade skeptics and overcome some major political hurdles.

Members of Congress may balk at opening up the heavily subsidized U.S. market, which is protected by a 54-cent-per-gallon ethanol tariff.

Some industry experts question whether ethanol really can substitute a major percentage of U.S. gasoline use. Brazil and the United States produce 70 percent of the world's ethanol, but ethanol represents just 2 percent of U.S. fuel consumption.

"Biofuels aren't going to bring us energy independence," said Charles Drevna, vice president of the National Petrochemical and Refiners Association, which opposes federal mandates to stimulate alternative fuel use.

He described the president's 35-billion gallon goal as "a ludicrous number," warning that Bush had gone "google-eyed over renewable energy" and had embarked on "a massive undertaking fraught with pitfalls along the way."

Deep suspicions

U.S. environmentalists also remain deeply suspicious of the White House's motives, sensing a rush to redeem the president's legacy in his last two years in office.

"If President Bush really wanted to be the biofuels president, he would put a carbon tax on fossil fuels. He won't do it, though," said Bruce Babcock, a leading agricultural economist at Iowa State University. A carbon tax on gasoline would make biofuels more competitive, stimulating private investment, he said. "Everyone would overlook everything else he did to the environment, that would all be forgiven."

But others commend the president for opening his eyes to new energy sources.

"It may well be genuine. I'm a little surprised, but pleasantly surprised," said Deron Lovaas, vehicles campaign director for the National Resources Defense Council.

"This is a political moment that shouldn't be wasted."

David Adams can be reached at dadams@sptimes.com.