Thursday, March 30, 2006

The next world giant

I'd keep an eye on Brazil if I were folk wanting to plan for the next generation's giant of the world. Yes, I mean economic powerhouse. Yes, I know they're presently 93d in GDP per capita (world factbook, 2005 est.) Of course, China's number 118 on that chart. By the same token I know they're already pretty big in the gross numbers area, being ranked 17th if GDP's considered by Official Exchange Rate, and 11th by GDP-PPP. But all that's secondary.

Money - investment - tends to go where the cost is low as it make potential profit higher. And Brazil this year will be reducing a major cost. Effective the end of this year, Brazil will not be using petroleum to fuel the cars and truck on the road. It'll be using ethanol produced from sugar cane. It's been working toward this for a long time and is literally facing the end.

A few interesting notes. First, the process is break-even against petroleum based fuel when the price of oil is about $45 per barrel. Second, ethanol isn't quite as energy efficient as petroleum - slightly fewer miles per gallon available. On the other hand ethanol burns with a lot less complex waste - less pollution per period of operation. And for those wanting to jump, corn ethanol is more expensive to produce than sugar-cane ethanol. Still, in the United States approximately half the crude oil we bring in goes to producing finished motor gasoline (per the IEA).


Back to the original point. I fully expect - based on what the experts in the industry are saying - that oil is going to continue to get more and more expensive (call it peak oil or something else). Brazil's gotten off that risk line, and the higher it goes the more tempting its local costs are going to be for outside investors. Them that have, get, and Brazil's got.

2 Comments:

Anonymous Prince Hydrajak said...

EROEI for cane sugar is indeed higher than corn. Wildly higher in fact. (something like 3 or 4 ... which is better than the EROEI for deep water oil drilling, right now)

There are other problems with both corn and cane ethanol however. Both deplete the soil at a tremendous rate. In Iowa's case, you dump more fetilizer on the land. In Brazil's case, you slash and burn for rain forest and move on.

Neither are sustainable. Fertilizer comes from.... wait for it.... Natural Gas. (Intimately tied to peak oil)

Rain Forest takes a long time to put those nutrients in the ground. Slash and burn removes them in a 1/100 to 1/1000 of the time it took to get in there.

Brazil is in as deep doo doo as we are, they are simply burning a different fuel on thier way to the cliff.

BTW, by any SANE measure (not EIA or IPA) we have already passed the peak production in light sweet crude.... you know, the stuff that makes gas.

Basically if you aren't powering your transport network with sunlight.... you are in deep crap. Stirling Solar arrays look like the best solution, photovolotic cells are pretty much a thermodynamic dead end.

You are always welcome on my Bison Ranch.

4/04/2006 4:35 PM  
Blogger Kirk said...

Thanks for the reminder of the source of 95% of the world's fertilizer. I really need to rethink some things.

4/10/2006 10:25 PM  

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