Spanish company Ferry Group is to invest €42/US$55.2 million in a project for the production of biomass fuel pellets in Bulgaria.
The 3-year project consists of establishing plantations of paulownia trees near the city of Tran. Paulownia is a fast-growing tree used for the commercial production of fuel pellets.
Ethablog looks at the geopolitics of ethanol
Henrique Oliveira's Ethablog - the only place in cyberspace that monitors Brazil's ethanol industry - has some very interesting pieces this week. First it looks at the environmental impacts of Brazilian monocultures on the Amazon region and other ecosystems in the country. He concludes that things are not what they seem, and illustrates the complexities of land-use with an example: when a degraded piece of land is converted to grow soy, the effect is that elsewhere cattle ranchers convert forests to pastures because they can no longer use that land. The dynamic has its own temporality, making impacts difficult to monitor.
Brazil is a huge country, itself consisting of states that differ in importance due to their agricultural output, their economic power and their demographic make-up. In another essay, Henrique traces the fascinating history of the internal geopolitics of Brazil's different states as it relates to the potential for biofuels - from early colonial times to the era of rapid industrialisation. He concludes by asking: "can Brazil drastically multiply its ethanol-producing capacity? Given the land-to-output ratio presented by the state of Sao Paulo, the answer is most certainly a “Yes”."
But it is the piece entitled "Ethanol and the one percent doctrine" that struck us most. Henrique connects best-selling author Ron Suskind's "One Percent Doctrine" with the future geopolitics of ethanol.
The doctrine comes down to Dick Cheney's own definition: 'If there's a 1% chance that Pakistani scientists are helping al-Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response. It's not about our analysis ... It's about our response.' Suskind takes this as a new doctrine: '(...) a standard of action that would frame events and responses from the Administration for years to come.'
Now, Henrique asks, given this doctrine, what are the consequences to America's national security if (1) ethanol does become a significant player in the energy industry and (2) a country such as Brazil takes on a leading role in its production? Are such events probable enough that they would already warrant preparing a response?
Read his analysis at EthaBlog.
Brazil is a huge country, itself consisting of states that differ in importance due to their agricultural output, their economic power and their demographic make-up. In another essay, Henrique traces the fascinating history of the internal geopolitics of Brazil's different states as it relates to the potential for biofuels - from early colonial times to the era of rapid industrialisation. He concludes by asking: "can Brazil drastically multiply its ethanol-producing capacity? Given the land-to-output ratio presented by the state of Sao Paulo, the answer is most certainly a “Yes”."But it is the piece entitled "Ethanol and the one percent doctrine" that struck us most. Henrique connects best-selling author Ron Suskind's "One Percent Doctrine" with the future geopolitics of ethanol.
The doctrine comes down to Dick Cheney's own definition: 'If there's a 1% chance that Pakistani scientists are helping al-Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response. It's not about our analysis ... It's about our response.' Suskind takes this as a new doctrine: '(...) a standard of action that would frame events and responses from the Administration for years to come.'
Now, Henrique asks, given this doctrine, what are the consequences to America's national security if (1) ethanol does become a significant player in the energy industry and (2) a country such as Brazil takes on a leading role in its production? Are such events probable enough that they would already warrant preparing a response?
Read his analysis at EthaBlog.
2 Comments:
There is a huge divide between what the U.S. Depts. of Defense, Energy, Commerce, State, and Agriculture may do in response to a given probability based on whether that probability is a security threat (like the Pakistan/WMD sample), a supply opportunity (restructuring the energy grid), a commercial impediment (rising oil prices), a commercial opportunity (developing an ethanol industry), diplomatic encumberance (Russia leveraging oil supplies to political advantage), or a farm commodities windfall (corn for ethnanol).
Each Department is likely to engage in a broad array of contingency plans (in general, intra-deparmentally uncoordinated) based on their individual missions. For instance, I don't think the Dept. of Defense will draw up plans for invading Brazil, but it is probable that the Dept. of Agriculture is lobbying for import tariffs on Brazilian ethanol.
The interesting Dept. to watch on ethanol is the Dept. of Energy which has just developed a 15-year "roadmap" for R&D and deployment of cellulosic ethanol resources.
Mr. Miller,
There already is a 54-cent tariff on each gallon of ethanol imported into the United States. President Bush has hinted that he would like to see this tariff go away, because then refineries belonging to oil companies, with which he is, of course, associated, would be able to buy cheaper ethanol to mix with the gasoline they produce.
Adding ethanol is a cheaper means of increasing production than expanding existing or building new facilities. However, I do not expect the 54-cent tariff to go away any time soon, thanks to the powerful corn lobby, centered in the American Midwest, specifically in Iowa, a state which yields disproportionate political power. Sen. Charles Grassley (R - Iowa) heads the Senate Finance Committee and is an ardent defender of the tariff. Need one say more?
However, come 2009, after the new president is inaugurated, the market may reach a consensus that American motorists do not deserve to continue to be penalized so that corn growers in the Midwest can continue to do business, and the 54-cent tariff may very well be reduced or eliminated. Federal tax breaks, however, which are not set to expire until 2010, do provide an incentive in the opposite direction for American corn growers, so that may buy the corn-based ethanol industry a little extra time.
About the 1% doctrine: after the market has sorted out this tangled state of affairs, the need for cheap fuel (ethanol in Brazil costs 50% of what it costs to produce in the U.S.) will likely trump tariffs and subsidies for certain narrow segments of American agribusiness and the U.S. may find itself importing massive amounts of ethanol from Brazil.
I do not believe that, when that happens, we as Americans should be armed only with our current knowledge of the country. Brazil is notoriously fickle and hard to decipher. It is very big - not the kind of country that can be invaded.
Optimizing commercial relations with Brazil depends on developing a more comprehensive knowledge of the country. Helping the average businessperson correct the usual perception that the country's language is Spanish and that the capital is Rio de Janeiro would be an important - albeit elementary - first step.
Henrique Oliveira
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