Senator John ThuneThe Bush administration's recent plan to promote Brazilian ethanol production should cause American farmers and others vested in the American ethanol industry a great deal of concern.
Given the growth of the Brazilian ethanol industry and its intentions to penetrate the American market, I believe the administration's plan to promote ethanol production in Brazil is not in the best interests of Americans. U.S. taxpayer dollars should not be spent to facilitate the growth of an already booming foreign industry.
Brazil's ethanol industry, which is based on sugarcane production, has already received significant economic assistance from the Brazilian government. Since 1975, the Brazilian government has subsidized sugarcane growers and mandates that service stations in every Brazilian town of at least 1,500 people install ethanol pumps.
Brazil also grants tax credits to the subsidiaries of multinational manufacturers of flex-fuel vehicles. Since the 1980s, almost all new cars sold in Brazil could be fueled by 100 percent ethanol.
Brazil is determined to export ethanol, and is investing heavily in the infrastructure necessary to transport ethanol within the country and to export markets. As the world's second largest producer, Brazilian ethanol is frequently shipped to nations in the Caribbean, which are allowed to export that ethanol into the United States duty free.
The president of Brazil has made it very clear that he strongly supports even more subsidized ethanol exports to the United States. In 2005, Brazilian ethanol imports to the U.S. totaled 31 million gallons. This number has grown to over to 434 million gallons in 2006.
America's farmers, investors, states in the Midwest, and our federal government have spent years and billions of dollars developing the American ethanol industry. America's dependence on foreign fossil fuels should not be shifted to a new dependence on foreign ethanol.
U.S. foreign policy should not aid competitors of American farmers. It simply does not make sense for an American President to promote the growth of ethanol production in foreign countries when domestic ethanol is beginning to provide a significant boost to rural America and our biofuels industry.
The growth of America's ethanol industry was spurred by both economic and national security concerns about American dependence on foreign oil. Substituting one foreign source of energy for another is not good policy.