Lugar calls for U.S. – Brazil energy cooperation

An excellent oped in the Miami Herald, co-authored with Brazillian ambassador the the U.S. Roberto Abdenour. Note the suggestion to remove the 54 cent a gallon tariff on ethanol imports. Excerpt:

"both [the U.S. and Brazil] face challenges to our energy security from the sharply rising worldwide demand for energy. Higher world energy prices, greater vulnerability to energy shocks and increased potential for conflict are consequences that will affect all nations. But amid this new energy threat, we also have an opportunity to fashion a win-win response that could benefit both our countries.

"The key is ethanol, which Brazil long ago saw as an important element of its energy strategy and now provides 18 percent of the country's automotive fuel, thanks to a booming sugar-cane-based ethanol industry. As a result, Brazil, which years ago had to import a large share of the petroleum needed for domestic consumption, recently reached complete self-sufficiency in oil. For its own energy security, the United States -- by far the world's largest oil importer -- similarly needs to break oil's near-monopoly on the transport sector by turning to ethanol for a much larger share of its auto fuel supply. Although the United States, using corn, produces nearly as much ethanol as Brazil and is expanding its annual production by 25 percent, the four billion gallons produced is still a tiny fraction of the 140 billion gallons of gasoline consumed.

"Using E-85 fuel, a blend of 15-percent gasoline and 85-percent ethanol, and easily available flexible-fuel technology so that cars can burn E-85, the United States could dramatically lower its oil dependence. Gaining consumer acceptance will spur the expansion of ethanol production and infrastructure. That means spreading the availability of E-85, now largely limited to the Midwest, to markets from coast to coast.

"One solution might be for the United States to import more Brazilian ethanol to blend on East Coast, where transportation costs significantly raise the price of Midwest ethanol. That would, however, require the politically difficult step of ending the protective tariffs on Brazilian ethanol that now shelters the U.S. industry. It makes strategic sense to import environmentally friendly ethanol from a reliable friend like Brazil in our own hemisphere. After all, the United States doesn't tax imported crude oil, which pollutes and often comes from unstable suppliers."

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