The ethanol debate has arguably been loudest in the United States where more than a quarter of the world’s oil production is consumed. The biofuels (mainly ethanol and biodiesel) program began as a quest for reduction in cost and volume of fossil fuels, used primarily in the transportation sector. Ethanol is blended with gasoline in different ratios to obtain various grades of ethanol-based gasoline while specially produced vegetable oil is blended with diesel also in different ratios to obtain various grades of biodiesel.
The problem with the US ethanol program was the feedstock, maize. A 2008 World Bank report attributed the global drawdown in wheat and maize inventories and the consequent increase in prices directly to the diversion of wheat and maize to the biofuels program.
Maize has a very poor energy balance (ratio of energy obtained to the energy expended in production) and compared to some other feedstock, poor ethanol production values. Miscanthus, the tall woody grass for example, produces about five times more ethanol per hectare of land than maize. There are also additional production costs that derive from the necessary conversion of maize to sugar before the fermentation process. Not surprisingly, another Report states that about 20% of the 2006/7 harvest in the US was utilized for ethanol production but was only able to displace about 3% of gasoline consumption.
Sugarcane, Brazil’s principal ethanol feedstock has about double the ethanol productivity value of maize. There are many sugarcane milling factories dotting the Central and Southeast regions of the Brazilian landscape. Production (sugar and ethanol) synergies stand them in good stead. The residue (known as bagasse) from sugarcane milling, is also used as feedstock for auxilliary power generation; the result is that these factories have become energy self-sufficient, selling excess power to utilities and raking in millions of dollars.
The minimum ethanol grade for gasoline in Brazil is 25% and there is no longer 100% gasoline. She has also become a net exporter of ethanol.
Estimates for reduction in greenhouse gases range from 86 to 90%.
Second generation biofuels programs are now using miscanthus as feedstock. The oil major, Shell recently stated that biofuels may make up 10% of the global energy mix in a few years.
Using the US biofuels experience as a template for evaluating biofuels programs in general is downright dishonesty, or at best delusory.