Flex-fuel vehicles...what say you?

As a matter of course, at 7:00 pm, I find myself switching between O'Reilly's Factor (Fox News) and Olbermann's Countdown (MSNBC). While I'm not in full agreement with the positions of either of these polar opposites, occasionally I get sucked in to issues I have some passion for. Such has been the case with Bill O'Reilly over the past four days, with his Talking Points focusing on our need to reduce our dependence on OPEC Oil, controlled by Mideastern Oil Barons. I agree with him that these people who really don't like us very much, yet they are benefiting enormously from our consumption of their oil at current oil prices. Bill's answer in part is to mandate flex-fuel vehicles, and follow the lead of Brazil in becoming more oil independent through greater usage of home grown ethanol. Bill has been to Brazil several times and I am very happy that he aggressively challenges those who have jumped on the latest bandwagon to pooh pooh ethanol for various reasons.

From my perspective, ethanol has gotten a bad rap, because our ethanol is derived from corn, which is a lot harder to justify socially and energetically than ethanol from crops like sugarcane that have a much better energy balance, and less impact on world food supply.

Could we produce ethanol profitably from sugarcane in the U.S. at present oil prices? Right now, the sugarcane farmer is barely breaking even at the 20 cents a pound he is getting for the sugar he is producing. So, the simple answer would seem to be that if the farmer were getting more than 20 cents a pound for sugar converted to ethanol, and if the infrastructure were already in place, he would be better off producing ethanol. It takes roughly 12 lbs of sugar to produce one gallon of ethanol, and on an equivalent volume basis, ethanol will only take you about 70% as far down the road as gasoline. Therefore 12 lbs sugar x 20 cents/lb = $2.40/gallon or $3.40/gas-equivalent gallon. How much cheaper it would be to produce ethanol directly from sugarcane juice than from fully processed raw sugar? The Brazilians should be able to answer this question. Apparently, they can produce ethanol at around 85 cents/gallon and I believe that they sell sugar at the world market price which is currently around 10 cents/lb. Could molasses and lower strikes of sugar be routed toward ethanol production, while only the highest strike of sugar (A-strike) be used toward the production of traditional sugar products? Is Brazil's claimed 8:1 energy output:input ratio valid? How much different is our ratio?