• Feb 18th 2011 at 5:09PM
  • 4
Brazilian energy giant Petrobas expects demand for biofuels will rapidly rise within the next decade and intends to spend $3.5 billion over the next four years to more than double its biofuel output. During a recent interview, Miguel Rossetto, chief executive of energy giant's biofuels unit, Petrobras Biocombustivel, stated:
We are preparing for a global scenario in which the demand for biofuels is expanding. The pace of growth, the volume of growth and the size of these markets are what's in play. But the course of expansion for renewable energy markets for us is a given.
Petrobas intends to spend $2.5 billion to boost its biofuel production, with 80 percent of the funds earmarked for ethanol and 20 percent for biodiesel. The company will set aside an additional $1 billion for infrastructure development.

The demand for ethanol in Brazil is on the rise, at least in part, due to a mandate that requires pump gasoline to be blended with 25 percent ethanol (and we have issues in the U.S. getting to 15 percent). Additionally, the Brazilian government requires diesel fuel to contain a minimum of five percent biodiesel (B5), but it's anticipated that this blend rate will continue to rise in the coming years.

[Source: Wall Street Journal | Image: Agência Brasil – Wikimedia Commons]

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    • 1 Second Ago
      • 4 Years Ago
      "3.5 billion on the next four years" seem a lot of money, but according to local newspapers they are planning 225 billion overall investments in this same period, more than half with their own income, part through capitalization, part from new loans.

      @DavidMartin, Now it seems pocket money!

      "80 percent of the funds earmarked for ethanol and 20 percent for biodiesel" ...
      They are probably securing sources from ethanol avoiding being cornered by the recent joining of Cosan (owner of previous Exxon assets in distribution and big ethanol producer) and Shell.

      Biodiesel is being used, but is not a success comparable to ethanol. Ethanol comes from cane while biodiesel comes from many cultures including castor oil (óleo de mamona), and even soy.

      Biodiesel was viewed in part as an opportunity to give poor countryside people a way to produce and sell something trade able improving their economic condition. It's more a social program than a large scale enterprise.

      The reason is that current cultures are not very efficient (cost, land use, EROI, ....) as cane, while diesel is cheaper (cross-subsidized) in Brazil. There are some cane based pathways to [synthetic/bio]-diesel being developed and/or tested like the Amyris and Gevo bio engineered ones, and some others.

      We'll probably become net exporters of oil, even considering our growth, but no Saudi Arabia.

      Brazil and the US are talking of joining forces to enable a global market of ethanol for a long time while providing Central America and Africa know how and investments so that they too could harness some of their potential while balancing foreign trade deficits and avoiding somewhat the growth in demand for oil.

      Keeping people honest and accountable, both here and in other "weak state" locations on the world, might be challenging. There is some concern that some "less responsible" governments and peoples might destroy their habitat and resources, kind of Haiti style. Proper checks and balances are needed.

      • 4 Years Ago
      This gives some perspective on the Brazilian deep water oil finds.
      If they had oil available cheaply on a scale sufficient to provide ample oil cheaply for themselves and the world in general they would not bother with ethanol, whatever the rationale given about environmental benefits.
      The reality is that the oil they have is incredibly deep, difficult and costly to extract, and doing so will take many years.

      On another note ethanol in Brazil is a different ball-game to the use of corn in the US, and much more energetically efficient with the climate there suiting production.
        • 4 Years Ago
        Absolutely right on both counts.

        I had lunch with some of my colleagues yesterday who are car lovers and were talking about how we are "sitting on 300+ years of oil and won't use it because of all them damn tree huggers".

        I asked them if they knew it cost $150 a barrel to process and it looked like someone had hit them in the head with a 2x4....totally stunned. They had know idea, and just assumed that someone was trying to violate their god given right to drive their V8's.

        People keep hearing these talking points about how much oil we have and no idea that it would cost $6-$8 a gallon, at best, if you tried to use it.

        Puts a different slant on the cost of alternatives when you get a few facts about the actual costs of our current system.
        • 4 Years Ago
        On another note the biggest field so far found off shore in Brazil is c.8billion barrels.
        World consumption is c.30billion barrels pa.
        The latest discoveries really, really have not solved the problem.
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