As a volatile chemical compound viewed as a gasoline substitute, pure ethanol has one major drawback. Internal combustion engines burn fuels; ethanol, in comparison with the typical hydrocarbon components of refined oils, is more oxygenated, and its combustion in oxygen generates less energy compared with either a pure hydrocarbon or a typical gasoline (table 1.1). This is not mitigated by the higher density of ethanol because liquid volumes are dispensed volumetrically and higher weights in fuel tanks represent higher loads in moving vehicles; a gallon of ethanol contains, therefore, only 70% of the energy capacity of a gallon of gasoline.1121 A review of the relative merits of alternative fuels in 1996 pointed out that ethanol not only had a higher octane number (leading to higher engine efficiencies) but also generated an increased volume of combustion products (gases) per energy unit burned; these factors in optimized ethanol engines significantly eroded the differential advantages of gasoline.21 Similar arguments could not be extended to a comparison between ethanol and diesel fuel, and ethanol had only 58 to 59% of the energy (net heat of combustion) of the latter.21

The high miscibility of ethanol and refined oil products allows a more conserva­tive option, that is, the use of low-ethanol additions to standard gasoline (e. g., E10: 90% gasoline, 10% ethanol) and requires no modifications to standard gasoline­burning vehicles. Dedicated ethanol-fueled cars were, however, the initial favorite of the Brazilian Alcohol Program (PROALCOOL); sales of alcohol-powered vehicles reached 96% of total sales in 1980 and more than 4 million such vehicles were esti­mated to be in the alcohol “fleet” by 1989.22 Such high market penetration was not, however, maintained, and sales of alcohol-powered vehicles had almost ceased by 1996 (figure 1.8). The major reason for this reversal of fortune for ethanol-fueled

vehicles was the collapse in oil prices during the late 1980s and 1990s — by 1998, the real price of crude oil was very similar to that before November 1973 (figure 1.3). Ethanol production from sugarcane in Brazil increased from a low and declining production level in early 1972, by nearly 20-fold by 1986, and then continued to increase (although at a greatly reduced rate) until 1998 (figure 1.9). The government responded to the novel “crisis” of the competing ethanol-gasoline market in several ways23: [4]

• Prices of sugarcane and ethanol were deregulated as of January 1, 1997.

• Tariffs on sugar exports were abolished in 1997.

• In January 2006, the tax rate for gasoline was set to be 58% higher than that for hydrated ethanol (93% ethanol, 7% water), and tax rates were made advantageous for any blend of gasoline and anhydrous ethanol with ethanol contents of more than 13%.

Brazilian automobile producers introduced truly flexible-fuel vehicles (FFVs) in 2003, with engines capable of being powered by gasoline, 93% aqueous ethanol, or by a blend of gasoline and anhydrous ethanol.24 In 2004, “flex-fuel” cars sold in Brazil were 16% of the total market, but during 2005, sales of FFVs overtook those of conventional gasoline vehicles (figure 1.10). This was a very “prescient” develop­ment as crude oil prices, which had been only slowly increasing during 2003 and early 2004, surged to new dollar highs in 2005 (figure 1.3). Domestic demand for ethanol-containing fuels became so great that the ethanol percentage was reduced from 25% to 20% in March 2006; this occurred despite the increased production of anhydrous ethanol for blending.25 Brazil had evolved a competitive, consumer — led dual-fuel economy where motorists made rational choices based on the relative prices of gasoline, ethanol, and blends; astute consumers have been observed to buy ethanol only when the pump price is 30% below gasoline blends — equal volumes of ethanol and gasoline are still, as noted above, divergent on their total energy (and, therefore, mileage) equivalents.

Other pertinent statistics collected for Brazil for 2004-2006 are the following:23 [5]

• Real prices for ethanol in Brazil decreased by two-thirds between 1973 and 2006.

• Sao Paolo state became the dominant contributor to national ethanol production and PETROBRAS began the construction of a 1,000-mile pipe­line from the rural interior of the state to the coast for export purposes.

A significant contraindicator is that ethanol-compatible vehicles still remain a minority of the total on Brazilian roads: in 1997, before FFVs became available, ethanol — compatible vehicles were only 21% of the total of ca. 15 million.22 The introduction of FFVs in 2005 is expected to gradually improve this ratio (figure 1.10).

Another predictable but little emphasized problem is that improvements to sugarcane harvesting methods have lead to the unemployment of 8% of seasonal sugarcane workers.23 Since 1998, Brazil has restricted the traditional practice of burning sugarcane crops (to eliminate the leaves) before manual harvesting in favor of the mechanical harvesting of green canes.19 Although far from straight­forward (because the lack of burning requires changes in pest management), this change in agricultural practice has contributed to a growing surplus of energy from sugar/alcohol plants as electricity generated on-site and offered to the distribution grids.19,22

Any overall cost-benefit of Brazil’s 30-year experience of ethanol as a biofuel is inevitably colored by the exact time point at which such an assessment is made. In April 2006, crude oil prices exceeded $70, and this price was exceeded during the summer of 2006, with crude trading briefly at $78/barrel (figure 1.11). Although the emphasis on oil prices may be perceived as one-dimensional,26 it undeniably focuses attention on real historic events, especially those on a short time scale that may, if not counterbalanced by government action and/or fiscal policies, determine the success of embryonic attempts at oil/gasoline substitution — as evidenced (negatively) by the 1990s in Brazil (figure 1.8). A survey published in 2005 by

Brazilian authors summarized many official statistics and Portuguese-language publications; the major impact factors claimed for fuel ethanol production in Brazil were the following:27

• After 1975, fuel ethanol substituted for 240 billion liters of gasoline, equivalent to $56 billion in direct importation costs and $94 billion if costs of international debt servicing are included — after 2004, the severe increases in oil prices clearly acted to augment the benefits of oil substitution (figure 1.11).

• The sugar/ethanol sector presented 3.5% of the gross national product and had a gross turnover of $12 billion, employed (directly and indirectly)

3.6 million people, and contributed $1.5 billion in taxation revenues; approximately half of the total sugarcane grown in Brazil in 2003 was dedicated to ethanol production.

• In 2004, sugarcane production required 5.6 million hectares and represented only 8.6% of the total harvested land, but more than 120 million of low — productivity pasture, natural pastures, and low-density savannas could be dedicated to sugarcane production for ethanol, with a potential ethanol yield of more than 300 billion liters/year.

Ethanol became a major exported commodity from Brazil between 1998 and 2005; exports of ethanol increased by more than 17-fold, whereas sugar exports increased by less than twofold, although price volatility has been evident with both commodities (figure 1.12).25 As a report for the International Bank for Reconstruction and Development and World Bank (first published in October 2005) noted, average

wages in the sugar-ethanol sector are higher than the mean for all sectors in Brazil.28 As a source of employment, sugarcane ethanol production directly employs more than 1 million people and is far more labor-intensive than the petrochemical indus­try: 152 times more jobs are estimated to have been created than would have been the case from an equivalent amount of petroleum products.29

Despite the apparent vibrancy of ethanol production in Brazil, ethanol use amounts to only 20 to 30% of all liquid fuels sold in Brazil.27 True levels of sub­sidies remain difficult to accurately assess; for example, public loans and state — guaranteed private bank loans were estimated to have generated unpaid debts of $2.5 billion to the Banco do Brasil alone by 1997.28 The ban on diesel-powered cars has also artificially increased fuel prices because diesel prices have been generally lower than gasohol blend prices.2728 PROALCOOL had invested $11 billion before 2005 but, by that time, could claim to have saved $11 billion in oil imports.29

Viewed from the perspectives of fermentation technology and biochemical engineering, ethanol production in Brazil improved after 1975; fermentation productivity (cubic meters of ethanol per cubic meter of fermentation tank capacity volume per day) increased by 130% between 1975 and 2000.27 This was because of continuous incremental developments and innovations; no reports of radically new fermentor designs in Brazil have been published (although very large fermentors, up to 2 million liters in capacity, are used), and ethanol concentrations in batch fermentations are in the 6 to 12% (v/v) range; the control of bacterial infection of fermentations has been of paramount importance, and selection of robust wild strains of the yeast S. cerevisiae has systematized the traditional experience that wild strains frequently overgrow “laboratory” starter cultures.30 The use of flocculent yeast strains and the adoption of continuous cultivation (chapter 4, section 4.4.1) have also been technologies adopted in Brazil in response to the increased production of sugarcane ethanol.31 Technical development of downstream technologies have been made in the largest Brazilian provider of distillation plants (Dedini S/A Industrias de Base, www. dedini. com. br): conventional (bubble cap trays), sieve tray, and azeotropic distillation methods/dehydration (cyclohexane, monoethylene glycol, and molecular sieving) processes operate at more than 800 sites — up from 327 sites before 2000.31

On a longer-term basis, genomic analysis of sugarcane promises to identify plant genes for programs to improve sugar plant growth and productivity by genetic engineering.32 33