Thursday, September 21, 2006

Choosing enemies over friends

Brazil has been working toward energy independence since the big world oil crisis of 1973. They may achieve it this year. How? They’ve systematically invested in ethanol made from homegrown sugar. It was a long, expensive process, but today ethanol accounts for at least 20% of its transportation fuel use, while the rest of the world limps along at 1%. Good for their energy independence, great for global warming (besides the reduced emissions, you can’t grow sugar in the Amazon rain forest).

The Brazilians have gotten so good at this that they have ethanol left over for export. The U.S. has a rapidly growing demand for ethanol, and a (finally) official mission to wean ourselves off imported oil. You’d think, says Thomas Friedman in a column entitled “Dumb as we wanna be” (published yesterday in the New York Times), that importing Brazilian ethanol would be a no-brainer.

Not only would it be cheaper, but their sugar-based ethanol also:
  1. has lower greenhouse gas emissions than our corn-based variety;
  2. uses much, much less fossil fuel to produce (sugar ethanol creates 8 times as much energy as the fossil fuels it takes to make it, while corn-based ethanol only produces 1.3 times as much); and
  3. can be produced in poor, tropical countries so that its purchase could help alleviate poverty in that part of the world, a fair amount of which is in our own back yard.

Instead, he continues, the Midwest farmers and agribusinesses who produce U.S. ethanol have convinced Congress to levy a 54-cent-per-gallon tariff on imported ethanol. So we’re taxing imported fuel that, if we purchased it, would help out an ally and neighbor. On the other hand, we don’t tax imported crude oil that, when we purchase it, definitely helps out a few rich enemies. As Friedman asks, “Is this stupid, or really stupid?”

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