February 9, 2010

Ethanol: To California via Brazil

There's been some talk lately (here, here and here) about the possibility of Brazil importing U.S. ethanol to supplement its supplies since it is running short -- global sugar prices are abnormally high and pulling more sugar from cane there instead of to ethanol, and Brazil's sugarcane crop was lower than expected.

Ethanol supplies will remain tight in Brazil until the next sugarcane crop this spring. After that, who knows.

At the same time, the state of California has made it clear that it prefers ethanol from Brazil than ethanol produced in the Midwestern United States because it rated ethanol from sugarcane - and shipped some 6,000 miles to the state - as "better" in terms of greenhouse gas emissions than ethanol made from corn produced 1,500 miles away. (The U.S. EPA disagrees with this.)

So...the plan is to ship ethanol 5,000 miles from the U.S. Corn Belt to Brazil so Brazil can ship ethanol 6,000 miles to LA. Or...will California just stay loyal to oil?

The answer really shouldn't be that difficult, should it?

For more on California's low carbon fuel standards, click here, here, here and here.

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