Biofuels Get Another Boost With New US-Brazil Agreement

President Bush and Brazilian president da SilvaThe buzz surrounding biofuels grew even louder this week during President Bush’s high profile visit to Brazil. Bush met with Brazilian President Luiz Inacio Lula da Silva in Sao Paolo, where the two leaders signed a new green fuels agreement designed to increase the viability of biofuels as an alternative to oil.

Complete coverage of the event was carried in many publications, including an article in the Los Angeles Times.

The US-Brazil agreement contains three main areas of collaboration between the world’s two largest ethanol producers: developing new and better biofuels technologies; fostering ethanol production in smaller oil-dependent countries in the Western hemisphere; and establishing standards that promote an international market for biofuels.

The agreement is being billed as a way to help meet the goals Bush set in his last State of the Union address, when he pledged to reduce U.S. gasoline consumption by 20 percent in 10 years. Achievement of this benchmark would be a step in addressing climate change and ending our dangerous oil dependency.

But the emerging US ethanol industry is controversial, with critics charging that its supposed benefits are questionable. Compared to Brazil, America relies on high subsidies to support ethanol production.

A recent report by the International Institute for Sustainable Development provided some eye-opening numbers illustrating this fact.

  • US subsidies to biofuels total between $5.5-billion and $7.3-billion (U.S.) a year.
  • The subsidy content of a gallon of E-85 (the almost pure blend of ethanol that “flex fuel” cars are designed to run on) is roughly $1.
  • Currently, there are over 200 local subsidies for ethanol in the US

Furthermore, the corn-based ethanol that is the norm in the US is less efficient than the sugar cane ethanol favored by Brazil. Given these concerns, dissenting voices are increasingly questioning the wisdom of current biofuel policies in the US.

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