Ethanol Cachaça Coffee Guarana Pull into any fuel station in Brazil and the question will be the same: "Αlcool ou gasolina?" Ethanol or gasoline? This South American nation is the first country in the world to adopt ethanol as a major fuel. Instead of relying on oil from the Middle East, Brazil looks to its fields of sugarcane to help power its cars and trucks. Most vehicles sold here are capable of running on either ethanol or gasoline, and the country is well on its way to creating the world's first ethanol-based economy. In the United States, most ethanol comes from corn. In Brazil, it comes from sugarcane. The cane fields are burned before harvesting to remove the husks and make it easier to cut. The process fills the air with cinders, forcing workers to shield their eyes with mesh-covered goggles. Most cane harvesting is still done by hand in Brazil by migrant workers who earn about $200 a month. Each is expected to cut seven or eight tons of cane a day. Brazil is the largest producer of sugarcane and ethanol experts here say sugarcane is a far better source for ethanol than the corn used in the United States. It is cheaper to produce, and it takes almost six times the energy to turn corn into ethanol as it does sugarcane. Moreover, the sugarcane plant consumes much more carbon per acre than corn. In fact, proponents of Brazilian ethanol say the sugarcane it is made from consumes more carbon from the atmosphere than is created by distilling and burning the fuel. History Brazil's ethanol odyssey began with the global oil crisis of 1975. At the time, Brazil had no domestic petroleum production, and the disruption of oil supplies from the Middle East combined with the hyperinflation already rampant in Brazil to create an economic crisis. Brazil had already begun stretching its gasoline supply by mixing it with ethanol to produce gasohol. Then, the generals running the country decided to switch entirely to ethanol. They set quotas for sugar refineries, requiring each one to devote a percentage of its output to ethanol. Brazilian motorsports, a move aimed at encouraging popular acceptance. By 1977, all fuel stations were required to pump ethanol -- a law that remains in place today. A year later, taxis, police vehicles and vehicles operated by Brazil's state-run utilities had to run on the new fuel. In 1979, the government ordered automakers to begin shifting production to ethanol-powered vehicles for the domestic market. Until then, the companies modified existing engine designs to meet the growing demand for ethanol vehicles. Now, they began producing entirely new engines designed to run only on ethanol. By the mid-1980s, it was hard to find a gasoline-powered car in Brazil. Almost all production had shifted to ethanol-only vehicles, and consumers had embraced the new technology, encouraged by hefty taxes and registration fees imposed on gas-powered vehicles. It also helped that ethanol prices were 60 percent of gasoline prices. Just when the transition to ethanol seemed complete, the whole experiment collapsed in the late 1980s as world sugar prices skyrocketed and oil prices retreated. Almost overnight, cane growers began switching their refineries back to sugar production to take advantage of the high prices. Brazil's supply of ethanol evaporated, and soon fuel stations stood empty. Cars were abandoned by the side of the road. Some desperate motorists tried filling up with gasoline and destroyed their engines. Though the sugar boom was short-lived, the damage was done. Brazilians turned their backs on ethanol. Dealers could hardly give their stocks away. Democracy had been restored in Brazil, and market forces took over where the generals left off. By 1990, production of ethanol-capable vehicles had dropped to less than 20 percent of the overall national output. But the promise of ethanol remained too great for Brazil to ignore. New fuel, new economy Today, Brazilians are switching back to ethanol, thanks to the backstop of flex-fuel engines that they see as a hedge against any future fuel shortage. Last year, seven new refineries came on line in Brazil, and 18 more are under construction. The switch to ethanol has helped stabilize gasoline prices in Brazil, which now produces more than enough gasoline to meet the reduced demand for that fuel in the largely ethanol-based economy. Today, ethanol represents about 40 percent of all non-diesel fuel used by motorists in Brazil. It yields better performance, but shorter range and reduced efficiency. On the other hand, it is much cheaper than gasoline -- at least during the period of the year when it is produced. Ethanol is only manufactured in Brazil between May and November because refineries have nothing to process at the height of the sugarcane growing season. As a result, prices fluctuate during the year and Brazilians often switch back to gasoline during the period ethanol refineries are idle. Brazil expects to double ethanol production by 2013. Some environmentalists worry that expanding ethanol production will put further pressure on the already decimated Brazilian rainforests. Moreover, there is no shortage of good cane land elsewhere in Brazil, where 7.4 percent is under cultivation. Of that, less than 1 percent is used to grow sugarcane, and that amount is already meeting the nation's ethanol needs.
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