As the world watches the 2012 London Olympics, the United States ought to brace for a looming embarrassment at the 2016 Olympics in Rio de Janeiro. Unless we act fast, everyone will see Brazilians spending one-third less per gallon and generating significantly cleaner air, while the United States and other nations remain locked in the stronghold of the OPEC oil cartels.
Brazil is getting rich on its energy independence — and buying up depressed Florida real estate with its deep coffers. In June, Brian Williams reported on NBC Rock Center that, “Brazil is minting 20 new millionaires a week,” prompting “waves of wealthy Brazilians landing on South Florida’s shores spending millions.” They now own the majority of new real-estate value in Miami.
Brazil’s newfound wealth, aided by its energy policy, has rocketed the country to Florida’s top trading partner. “Brazil is our China,” said Frank Nero, the head of Miami-Dade County’s economic development agency. Brazil is proving itself a world leader in environmental reform on several fronts, having reduced deforestation to a fifth of its peak in the 1990s.
Brazil is amassing fortunes by developing the most biofuel-based infrastructure in the world from sugarcane-based ethanol. It spends what is necessary to develop the infrastructure and offer tax incentives to encourage a nationwide eco-friendly economy. As a result, Brazil has decreased oil imports from more than 80 percent in the 1970s to essentially zero today (including its own domestic oil production).
Try to imagine an energy source that is abundant, carbon-neutral and cheaper for Miami-Dade County’s 1,012,724 cars and trucks and the 250 million in the United States, as well as heating and cooling the homes of our 313 million people. As we record the hottest year in history in the United States by five degrees, policy analyst Richard Mann, visiting Brazil last month, confirmed that the price for ethanol, available right alongside gas, was 30-percent cheaper.
Half of all cars on the road today in Brazil are flex-fuel, capable of running on 100-percent ethanol or a blend of ethanol and gasoline (up to 25 percent ethanol). Last year over 80 percent of Brazil’s new car sales were flex-fuel. Brazil’s ethanol emits as much as 90 percent less carbon emission than gasoline.
Not all biofuels are created equal. Currently, the United States version is corn-based, which may cause more environmental harm, including carbon emissions during conversion and transportation, than petroleum, in addition to raising food prices.
Luckily, corn ethanol is only one piece of a biofuel policy that could challenge Brazil’s leadership if we stop listening to the oil companies’ excuses.
Under the Energy Acts of 2005 and 2007, a renewable fuel standard was established to mandate biofuel production, including a minimum 36 billion U.S. gallons of ethanol per year by 2022. At least 16 billion gallons must come from cellulosic (trees and grass) biofuel, and no more than 15 billion from corn.
The challenge of the law’s stated standard is that we do not have enough ethanol-capable gas stations (now fewer than 1 percent are ready) or dedicated pipelines (we have none). The president campaigned to increase ethanol-capable cars. But we have not made the investments to allow this to occur.
Ethanol shipping now relies on trains, trucks and barges in lieu of pipelines. The Environmental Protection Agency said that will only be sufficient through 2015. To meet the targets beyond this date will require an estimated $2.6 billion and $100,000 per gas station for special tanks. Another hurdle: fewer than 1 percent of all cars on the road today are capable of running on biofuel.
Ethanol has the potential to transform energy in the United States, but only if Congress shows leadership and spurs the private sector to action. Until then, Brazil will continue to increase its global stature from ethanol, reduced deforestation, and economic growth — and outshine the United States in the process.
Robert Weiner was a senior White House spokesman, chief of staff for Rep. Claude Pepper and spokesman for the House Government Operations Committee. George Clingan is Latin American policy analyst for Solutions for Change.