Why does brazil have a law that all gas stations must have a ethinol pump but the us can't accomplish this

Question

Also why is ethinol about half price of gasoline there, but we still have to pay the high prices that oil companies demand from us. It's funny a small country like that began fixing there oil problem in the 70's but the us. gov. hasn't fixed our problem yet. Brazil uses less than 6 % foreign oil. we use about 96%.

Answer 1

because Big Oil runs this country regardless of who's in the White House. untill someone figures out away to change this, or untill we run out of oil, alternate energy will continue to be held back.

Answer 2

We also use tremendously more fuel than they do.  If you used all of the corn in the country to make ethanol, it would only be a small fraction of the fuel needed here in the states.

Answer 3

We asked one of our experts in global forecasting to help answer your excellent and difficult questions. Here are his comments in four parts:

Why does Brazil have a law that all gas stations must have an ethanol pump, but the U.S. can't accomplish this?  

Brazil has had a long range strategy for energy dependence for many years, which takes advantage of the country's excellent growing conditions for sugar cane and the ability to convert that sugar cane to ethanol. The US lacks the climate for sugar cane and thus the ability to convert it. The US efforts to use corn raises meat prices and other products that use corn as an input, which means angry cattle ranchers and consumers.



Also, why is ethanol half the price of gasoline in   Brazil, but we still have to pay the high prices that oil companies demand.?

Brazil also has discovered huge reserves of oil off their coast, giving them alternatives to which oil source they want to use; in other words, lots of competition for ethanol. In the US, oil is the primary source of feedstock for gasoline and that source is controlled  largely by countries that are politically unstable. Thus, oil is at record prices and gasoline in the US is extremely high. Oil is a very fungible (one person's oil is the same as anybody else's)  product in a very competitive global market, but the combination of surging Asian demand and high political uncertainty means that global oil prices are high. Add to that the fact the refining capacity has changed  little in recent years and supply constraints add to the problem of high gasoline prices in the US. Also, global oil is priced in dollars. So to preserve the real values of their  revenues foreign countries have to raise the price of oil when the value of the dollar declines (as it has been in recent  years).



Brazil began  Fixing its oil problems in the 70s, but the U.S. government hasn’t fixed the problem in the U.S.

Again, it can be said the Brazil has a long range energy strategy, while the US has relied pretty much on the free market. A tax increase on oil would go a long way to solving our problems but is political suicide for elected officials. Instead we get regulations that simply exacerbate the problem. Yet, one can say...the people get what they vote for!

Brazil uses less than 65% foreign oil and the U.S. uses as much as 96%.

Again, Brazil has vast internal resources for a relatively small demand; while the US has limited domestic supplies for a truly vast demand for energy.

Answer 4

Ethanol is cheaper in Brazil because Brazil has heavily invested in ethanol converion from sugar and the government has supported this policy for years.  Brazil is able to grow sugar cane easily and conversion results in a cost of about $1/gallon, versus today's gasoline prices.  

Brazilian citizens have access to 30,000 ethanol stations, far more than the US currently has, even though we log 100 times the miles of Brazil.  Brazil uses 20% alternative fuels, compared with about 1% globally.  70% of all vehicles sold in Brazil are flex fuel vehicles, giving drivers the option of choosing whichever fuel is less expensive.

The reason Brazil is so well set to gear up ethanol use?  Military and dictatorial government leaders in the 70's bankrolled the construction of ethanol refineries and cut off subsidies in the 90's, forcing ethanol producers to become efficient or shut down.  US producers are still leaning heavily on government support and there are no signs of that support ending soon.  Why did Brazil invest so heavily?  National defense, of course!  If you can grow your own fuel source, you don't need to rely on foreign sources in time of war.  Brazil's weather is perfectly suited to growing sugar cane, so they won't ever be threatened by global oil shortages...