Ricardo's Blog

There is an increased interest on the USA about alternative fuel sources.  From the preeminent mention on the last presidential state of the union all the way into mass media, there is definitively interest on alternative energy sources.  The reasons for this raise on interest are many and very relevant: the ever growing oil prices, instability in the Middle East, green house effect concerns are among the most relevant here.  Of course, we also have to remind ourselves that petroleum is a non-renewable resource.  Petroleum will go away someday for sure; the only real question is when.

One of the very exciting things about living in Brazil is to get to experience alternative fuels as a part of your everyday life.  Here Ethanol, Compressed Natural Gas, Diesel and Bio diesels are easily available everywhere.  In fact Ethanol is pretty much available in every single gas station from any of the vendors that serve this market (there are about 29,000 gas stations that sell ethanol vs. 600 in the US).  And most cars are ready for Ethanol too.  Something around 70% of all new cars sold in Brasil have what is called a Flexible Fuel engine (in the US this is called FFVs or Flexible Fuel Vehicles, in Brasil they are commonly called “Flex”).  A flexible engine accepts ethanol or gasoline or any mix of them.  You can run it fully on gasoline or ethanol or any mix of them.  Here is an article on Brasilian Flex Fuel cars: http://www.msnbc.msn.com/id/5829046/ .

Flex cars give you the power to choose which fuel you’d like to put at the pump every time you refuel.  This is a very powerful proposal: your can switch between fuels according to the fluctuations of their prices.  In the case of Brasilian Ethanol, its efficiency is 70% of that of gasoline.  This means that if you have a flex car it will be economically advantageous to you if the price of a liter alcohol is at the most 70% of the gasoline liter.  Today, this is true in some Brazilian states and cities, Ethanol (or alcool as it is called locally) is cheaper.  However, in most states the ethanol price is very close to the 70% threshold (as in Sao Paulo, which is a very nig Ethanol producing state).  In many other states the price of Ethanol exceeds the 70% and therefore is more expensive to run the car on it.  Folha de Sao Paulo, one of the main Sao Paulo newspapers recently published a little table to make it easier to decide on what to buy at the pump (please note that the table is expressed in Brasilian Reais).  Link to the table: http://www1.folha.uol.com.br/folha/dinheiro/ult91u105646.shtml .

In my case, I have two cars, one that runs only on gasoline and one that has a Flex engine.  I strongly prefer to fill the flexible car on alcohol, even if there are no savings to be made.  I think that contributing to the environment and to keeping the oil prices stable are well worth the effort.  There are a few things you need to get accustomed to, for instance you end up going to the gas station more often if you use alcohol.  However on other fronts such as performance on the road Ethanol behaves extremely well.  Its octane measures are typically well higher than gasoline.

A lot of this sounds awfully uneventful and it is.  Once you have the production capacity for ethanol and the ubiquitous distribution, there is nothing special about filling your car with alcohol.  The Flex engine as greatly enhanced the power for consumers to choose the fuel they want to use depending on the prices, lifestyle, environmental concerns and many other variables (you can even travel the countryside in Brasil and fill with a different fuel in the middle of the road if prices in the gas station favor alcohol or gasoline).  Flex cars are coming to other markets as well.  In the USA Ethanol is typically produced out of Corn and is mixed with Gasoline (corn is less efficient than sugar cane to produce ethanol by the way, so the US is a more expensive producer than Brasil).  The most common Ethanol in use in the USA is called E85 – a mix that contains 85% ethanol and 15% gasoline.  The gasoline in the mix helps cars start on cold days (in Brasil you can buy pure Ethanol for your tank and flex cars have a small repository for gasoline to do the starts in cold weather).

There are many other exciting fuel alternatives becoming popular today: CNG, Electrical, Hybrids, and Biodiesel. We strongly need our country leaders to embrace a future in which oil is not the only fuel available to power our countries.  Decisive action today will enable a more clean, efficient and sustainable future.

More Links:

-         USA Today, “Brazil hopes to build on its ethanol success”: http://www.usatoday.com/money/world/2006-03-28-brazil-ethanol-cover_x.htm

-         Yale University article on Brazilian Ethanol: http://yaleglobal.yale.edu/display.article?id=6817