Bruce Pile

Sugar's Fundamental Shift?

Corn ethanol is virtually useless in replacing oil with it's EROEI of 1.3, meaning that it takes over 20 barrels of finished ethanol product to save one barrel of imported oil. No nation can be self sustaining with corn derived fuel. Sugar ethanol has an EROEI about the same as oil and can effectively replace oil.

At some point, hopefully, the dunce nations (the U.S. is chief dunce) that account for 40% of global ethanol use will abandon the corn growers' political brew and start using sugar like the other 60%. This could add dramatically to the basic recession resistant food demand for sugar. If oil supply destruction continues to catch up to demand destruction, and the oil price heads back into a climb, effective crude replacement could come back into vogue.

Congress has turned a cold shoulder to the Pickens Plan for converting our vehicles to natural gas. Natural gas and sugar are the only two viable replacements for oil on the scale needed. The other options, solar, electric, hydrogen, and the other things do not have the EROEI needed or the near term availability needed. Until cellulose ethanol is developed, sugar may become a very important bridge fuel for years.

The Long Case for Sugar-Based Brazilian Ethanol Producer Cosan Limited

If you look at a history of oil vs sugar price, you see no correlation before about 2001. With the oil price climb and resultant popularity of sugar ethanol, the R factor has grown to about 85!

If sugar has been taking just 0.6% of Brazil's land when 12% could support sugar expansion, then the increasing correlation between oil and sugar must not be very strongly influenced by land availability. Sugar prices have been controlled by other crop popularity and what not, latching onto whatever oil is doing instead. Sugar is at a huge, anomalous lag behind oil. It's one of those things, like silver, gold, and nat gas that follow the big moves in oil but haven't moved that much - yet. Of all the things that follow oil, sugar is by far the cheapest.