Can we go “flat out” on ethanol? This
is the issue at the heart of current debate over the viability
of ethanol and biofuels as potential substitutes for oil.
On the positive side, the experience of Brazil demonstrates unequivocally
that ethanol can be produced more cheaply than the current cheapest
oil - without subsidies. There has been a belated recognition of
Brazil’s success now being registered in the international
press.
Not all countries can produce ethanol from sugar cane as cheaply
as Brazil. But many are close - including Australia, India and
many of the tropical countries in Africa. For the latter, a little
dose of technological assistance from the developed world would
create an “ethanol zone” covering Brazil and Central
America, India and South-East Asia and Africa, that is every bit
as productive of liquid fuel as the Middle East is productive of
oil today.
The difference, of course, is that growing sugarcane and producing
ethanol in these countries would kick start their development efforts;
free them from dependence on oil imports and the accompanying financial
burdens; underpin their energy security; and drive their rural
development efforts, thus bringing them out of poverty and guiding
them, peacefully, towards democratisation.
Compare this with the high price of oil, and oil dependence, propping
up unsavoury oil regimes throughout the Middle East, where the
regime buys off popular discontent or makes war on dissidents (as
in Nigeria) but never seems to get around to the job of industrial
development.
I’ll come back to some more positives in a moment. But what
about the negatives? Most of the counter-arguments come from the
US, where ethanol is produced in a temperate climate largely from
corn and grains. The counter-argument is that intensive agricultural
practices utilised in the US corn belt produce ethanol that requires
heavy energy inputs in the form of fertilisers, herbicides, and
transportation.
Brazil produces ethanol with an energy gain of up to 8:1, because
of the favourable conditions in which the fuel is produced. Add
to this the fact that Brazil has spent years perfecting suitable
varieties of cane and even genetically engineering it to optimise
yields.
Now I have no brief for the US corn belt, and I am opposed to
the use of intensive agriculture that exhausts soils and produces
unacceptable runoff as anyone else. But do these arguments carry
across to the use of sugar cane in tropical countries?
Taking them in reverse order, transport is minimised when ethanol
plants are built next to the sugar cane fields, as is always the
case in tropical countries. Herbicides are not needed in cane fields
- you don’t do any weeding for such a crop, and in fact any
weeds that manage to grow are simply swept up as “biomass” to
go the sugar/ethanol mill. Fertiliser inputs are minimised by recycling
the waste from ethanol distillation (vinasse) after drying it.
And the drying, as well as the entire operation of the mill, can
be powered by a mini-power plant burning the cane stalks after
extracting the juice.
So if Australia were to swing behind sugar cane for ethanol production
in a big way, then the results would be almost entirely positive.
Farmer co-ops would be formed to build the ethanol plants, and
they would provide steady employment in rural areas. The supplies
of ethanol would encourage independent retailers of fuel to challenge
the near-total dominance of the oil majors over distribution of
petrol and fuel oils.
Globally, there is everything to gain from creating a free and open
global market for ethanol. It makes as much sense for motorists in
the US and Europe to import their liquid fuel from progressive and
democratic countries in the tropical parts of the world that are
developing fast - such as Brazil or India or even Australia - as
it does to import oil that props up Middle East regimes.
John Mathews is Professor of Strategic Management
in the Graduate School of Management at Macquarie University.
He is the author of Tiger Technology and other studies on the
rise of East Asia in the world economy. His new book will focus
on monopoly power in civilizations old and new. This article was
originally published on On-Line Opinion: Australia's e-journal of
social and political debate. http://www.onlineopinion.com.au/
This work is licensed under a Creative
Commons License.
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