Date: December 20, 2006 

Source: Miami Herald

It's a bold new venture; the creation of a hemisphere-wide ethanol market. If it comes off Latin America - not just Brazil - could become the global model for energy diversity and inter-dependence.

Congratulations to Florida Governor Jeb Bush for showing his commitment to renewable energy in his waning days in office by signing on as co-chairman of the newly-launched Interamerican Ethanol Commission.

The commission is very much the fruit of Bush’s personal quest in the last two years to shift Florida away from its current dependence on foreign oil, while at the same time creating a cleaner, more sustainable fuel economy. Sure, he had some nudges and prods along the way from the folks at Florida FTAA, but that only shows that Bush is a good listener who is receptive to new ideas. 

Monday’s launch at Miami's Biltmore Hotel was the culmination of a series of contacts this year between Bush and Brazilian agriculture officials over the potential for hemispheric free trade in cleaner-burning biofuels, which can be blended with gasoline.

Bush became intensely aware of the grave risks of foreign oil dependence to the Florida economy during the 2005 hurricane season when storms shut down Florida’s main ports, as well as Gulf of Mexico refineries, disrupting oil supply and forcing a dramatic spike in gas prices.

Rather than buy oil from hostile nations such as Venezuela, which supplies about 12 per cent of daily U.S. petroleum needs, Bush said U.S. dollars would be better spent on buying biofuels from friendly countries such as Brazil, Colombia, and smaller countries in Central America and the Caribbean. 

“That just cries out common sense,” he said, a reference to Venezuela’s leftist president Hugo Chavez, who is on a mission to undermine United States influence in Latin America. 

For now, the biggest challenge was to “change the thinking in this country,” Bush said. That will also be the main task of the new commission which plans to be a regional advocate for renewable fuels, helping countries develop their own energy strategies as part of  an effort to build a global commodity market for ethanol. The commission plans to begin by funding regional research on potential supply and demand, before undertaking a hemispheric ‘roadshow’ to sell the concept country by country.

As a sign of growing business interest in the concept, the breakfast launch was attended by a large group of Brazilian ethanol industry leaders and U.S. businesses. Many were invited to stay on after the launch for the commission’s inaugural meeting. "The intellectual horsepower these guys bring to this meeting is amazing," said Mark Emalfarb, CEO of Dyadic, a Florida biotech firms leading the field in cellulosic ethanol (cutting edge technology to make ethanol from fibrous plant matter).    

In another sign of the broadening base of support for Bush’s push for ethanol, the commission launch was attended by Florida Agriculture Commissioner, Charles Bronson. Some American farmers, especially U.S. corn-growers in the Mid-West, are wary of low-cost ethanol producers such as Brazil, fearing it will undermine their own fast-growing corn-based ethanol industry. But Bronson sensibly stressed that the potential market for ethanol was so huge, they have nothing to fear. “There’s plenty of room to work with countries like Brazil,” he said. "If Brazil and the U.S. can work together towards this agenda then we can do a  lot of things," he added. "If we stick to our tactical positions we won't go anywhere." 

Even so, on Dec 8 the U.S. Congress passed an extension of the 54-cent-per-gallon tariff on imported ethanol until 2009. 

But countries such as Brazil aren't making a big deal of it. In fact, the tariff has become a minor issue of concern. While Brazil is expanding its ethanol production, domestic consumption is so large it currently doesn't have a lot left over to export. (Some sugar mills have also increased their sugar production to take advantage of the high world market price for sugar). Wisely, Brazil is far more focused on the creation of a global commodity market for ethanol as a guarantor of the long-term viability of ethanol. Some critics of ethanol have misread this to mean that ethanol producers arrogantly presume to take over the gasoline market, lock, stock and barrel. Far from it. The immediate goal of the Brazilians is actaully quite modest: a hemisphere-wide E10 brand of gasoline (blended with 10 per cent ethanol). 

At this stage, even a 10 per cent reduction in pure gasoline consumption would be a major step. Coupled with other emerging technologies - biodiesel, biomass waste-to-electricity, wind, and solar -  this would  put us firmly on the right path. 

While the challenge before the commission is substantial, Bush is far from alone in taking it on. His two co-chairs on the commission are both formidable allies: Inter-American Development Bank president, Luis Moreno, and former Brazilian agriculture minister Roberto Rodrigues. 

Moreno pointed out that the IDB has long been an advocate of biofuels, as far back as the 1970s when it helped Brazil begin to develop its nascent sugar cane for ethanol program. 

“Many people thought biofuels were a crazy idea,” he said. “We all now know the fruits of that visionary effort,” he added, referring to Brazil’s enormously successful ethanol program, coupled with its ‘flex-fuel’ technology which allows cars in Brazil to run on either gasoline or ethanol, or any blend of the two. 

Ethanol has enormous potential as a catalyst for rural economic development in low income regions, such as Central America, according to Moreno. An IDB study in Mexico recently found that replacing 10 per cent of that country’s gasoline consumption with local refined ethanol would save $2 billion a year while creating 400,000 jobs. 

Moreno also credited Bush with a longstanding commitment to Latin America. “His passion for this hemisphere has never been an afterthought,” he said. By taking on the ethanol issue, Moreno added that Bush would also be helping change the future lives "of many Latin Americans.” 

The launch of the commission was the emotional fulfillment of a three decades-old dream for Rodrigues, one of the pioneers of Brazil’s ethanol strategy. 

Rodrigues painted a more grandiose picture of the commission's ethanol mission. It was all about building a revolutionary new fuel economy that was free of oil. 

"For the last 35 years, I have been thinking how stupid has been humankind to build a whole civilization over oil, which is something that is going to finish one day,"  he said. “What we are doing here is launching a new civilization,” he said, built on biofuels. “We are doing something for our grandchildren and great grandchildren.”Near the end of the launch Bush was asked a question by a reporter that is surely on the minds of many who study this issue. Did he regret not having launched his ethanol initiative earlier in his term as Governor? The question was partly aimed at his family's long history of association with the oil industry. His answer revealed why Jeb Bush has become such an able politician. Instead of taking umbrage at the question, he answered it in a thoughtful way that made any honest observer question our collective addiction to oil over the last 100 years. "It's human nature to do the same thing over and over again," he said, referring to the ease with which we all became accustomed to cheap oil. "It's the way we are."

However, he pointed out that things have changed. Now that we don't have the presumption of cheap oil any more it's time "to do the uncommon thing," he said "and look over the horizon." There was no point crying over the past, he said. The important thing was to find a way to stop living "the tyranny of the present."

©2003 FTAA