The Energy Harvest

By THOMAS L. FRIEDMAN

Any time that OPEC got a little too overzealous in pushing up oil prices back in the 1970's, the legendary Saudi oil minister Sheik Ahmed Zaki Yamani was fond of telling his colleagues: Remember, the Stone Age didn't end because we ran out of stones.

What he meant was that the Stone Age ended because people invented alternative tools. The oil age is also not going to end because we run out of oil. It will end because the price of oil goes so high that people invent alternatives. Mr. Yamani was warning his colleagues not to get too greedy and stimulate those alternatives.

Too late -- oil at $70 a barrel has done just that. One of the most promising of those alternatives is ethanol, an alcohol fuel made from corn, sugar cane or any biomass. I came to Brazil to try to better grasp what is real and what is not in the ethanol story, because no country has done more to pioneer sugar ethanol than Brazil.

My impression, after talking to a range of Brazilian experts, is that not only is ethanol for real, but we have not even begun to tap its full potential. With just a few technological breakthroughs, Brazil really could be the Saudi Arabia of sugar and we could actually achieve that energy dream of getting ''barrels from bushels.''

Since the 1970's oil shocks, Brazil has, with lots of trial and error, made ethanol part of its daily life. It hits you the minute you drive into a gas station in São Paulo, where you need two things: a credit card and a calculator. In rough numbers, sugar ethanol now sells here at a little over $2 a gallon and gasoline at a little more than $4 a gallon. Because sugar ethanol gets only about 70 percent of the mileage of gasoline, drivers here do the math each day and figure out if ethanol is at least 30 percent less than the price of gasoline. If it is, many will fill 'er up with sugar cane.

Brazilians have that luxury because there are 34,000 gas stations here that offer both gasoline and ethanol (compared with around 700 in the U.S.) and because 70 percent of new cars sold here can run on either gasoline or sugar ethanol. As a result, Brazil has replaced about 40 percent of its gasoline consumption with sugar ethanol.

I visited the Cosan sugar mill northwest of São Paulo, Brazil's largest, where you fly in over an ocean of green sugar cane. The cane is harvested onto big lorries and trucked to the Cosan distillery. There, the juice is extracted and converted to either crystal sugar or ethanol. The remaining cane waste -- called bagasse -- is used to fuel huge steam boilers that produce enough electricity to both power the refining process and leave a surplus to be sold back to the grid.

It's important to understand this process to appreciate just how ''much more energy we could get from sugar cane'' with just a few more breakthroughs, explained Plinio Mario Nastari, one of Brazil's top ethanol consults.

Think of each stalk of sugar cane as containing three sources of energy. First, the juice extracted from the cane is already giving us ethanol and sugar. Second, the bagasse is already heating very low-technology, low-pressure boilers, giving us electricity. But if Brazil's refiners converted to new high-pressure boilers, you could get three times as much electricity.

Finally, when the cane is harvested the tops and leaves are often just left in the field. But this biomass is rich in cellulose, the carbohydrate that makes up the walls of plant cells. If the sugar locked away in cellulose also could be unlocked -- cheaply and easily by a chemical process -- this biomass could also produce tons of sugar ethanol. There is now a race on to find that process.

A breakthrough is expected within five years, and when that happens it will be possible to extract ''more than double'' the amount of ethanol from each sugar stalk, said José Luiz Oliverio, a senior V.P. at Dedini, the Brazilian industrial giant, which has a pilot cellulosic ethanol project.

I asked Brazilian experts what they'd do if they were the U.S. president. The consensus answer: Require U.S. oil companies to provide ethanol fuel pumps at all their gas stations, require U.S. auto companies to make all their new cars flex-fuel and improve mileage standards, and get rid of the crazy 54-cent tariff we've imposed on imported sugar ethanol (to protect our farmers). And then let the market work.

Demand for ethanol would soar. This would push us faster down the innovation curve, so we'd solve the cellulosic ethanol problem quicker, and that would strengthen the democrats in our hemisphere and weaken the petrocrats in the Middle East. If only we were as smart as Brazil

Dumb as We Wanna Be

By THOMAS L. FRIEDMAN

I asked Dr. José Goldemberg, secretary for the environment for São Paulo State and a pioneer of Brazil's ethanol industry, the obvious question: Is the fact that the U.S. has imposed a 54-cents-a-gallon tariff to prevent Americans from importing sugar ethanol from Brazil ''just stupid or really stupid.''

Thanks to pressure from Midwest farmers and agribusinesses, who want to protect the U.S. corn ethanol industry from competition from Brazilian sugar ethanol, we have imposed a stiff tariff to keep it out. We do this even though Brazilian sugar ethanol provides eight times the energy of the fossil fuel used to make it, while American corn ethanol provides only 1.3 times the energy of the fossil fuel used to make it. We do this even though sugar ethanol reduces greenhouses gases more than corn ethanol. And we do this even though sugar cane ethanol can easily be grown in poor tropical countries in Africa or the Caribbean, and could actually help alleviate their poverty.

Yes, you read all this right. We tax imported sugar ethanol, which could finance our poor friends, but we don't tax imported crude oil, which definitely finances our rich enemies. We'd rather power anti-Americans with our energy purchases than promote antipoverty.

''It's really stupid,'' answered Dr. Goldemberg.

If I seem upset about this, I am. Development and environmental experts have long searched for environmentally sustainable ways to alleviate rural poverty -- especially for people who live in places like Brazil, where there is a constant temptation to log the Amazon. Sure, ecotourism and rain forest soap are nice, but they never really scale. As a result, rural people in Brazil are always tempted go back to logging or farming sensitive areas.

Ethanol from sugar cane could be a scalable, sustainable alternative -- if we are smart and get rid of silly tariffs, and if Brazil is smart and starts thinking right now about how to expand its sugar cane biofuel industry without harming the environment.

The good news is that sugar cane doesn't require irrigation and can't grow in much of the Amazon, because it is too wet. So if the Brazilian sugar industry does realize its plan to grow from 15 million to 25 million acres over the next few years, it need not threaten the Amazon.

However, sugar cane farms are located mostly in south-central Brazil, around São Paulo, and along the northeast coast, on land that was carved out of drier areas of the Atlantic rain forest, which has more different species of plants and animals per acre than the Amazon. Less than 7 percent of the total Atlantic rain forest remains -- thanks to sugar, coffee, orange plantations and cattle grazing.

I flew in a helicopter over the region near São Paulo, and what I saw was not pretty: mansions being carved from forested hillsides near the city, rivers that have silted because of logging right down to the banks, and wide swaths of forest that have been cleared and will never return.

''It makes you weep,'' said Gustavo Fonseca, my traveling companion, a Brazilian and the executive vice president of Conservation International. ''What I see here is a totally human dominated system in which most of the biodiversity is gone.''

As demand for sugar ethanol rises -- and that is a good thing for Brazil and the developing world, said Fonseca, ''we have to make sure that the expansion is done in a planned way.''

Over the past five years, the Amazon has lost 7,700 square miles a year, most of it for cattle grazing, soybean farming and palm oil. A similar expansion for sugar ethanol could destroy the cerrado, the Brazilian savannah, another incredibly species-rich area, and the best place in Brazil to grow more sugar.

A proposal is floating around the Brazilian government for a major expansion of the sugar industry, far beyond even the industry's plans. No wonder environmental activists are holding a conference in Germany this fall about the impact of biofuels. I could see some groups one day calling for an ethanol boycott -- à la genetically modified foods -- if they feel biofuels are raping the environment.

We have the tools to resolve these conflicts. We can map the lands that need protection for their biodiversity or the environmental benefits they provide rural communities. But sugar farmers, governments and environmentalists need to sit down early -- like now -- to identify those lands and commit the money needed to protect them. Otherwise, we will have a fight over every acre, and sugar ethanol will never realize its potential. That would be really, really stupid.