Some lawmakers push sugar as ethanol source

updated 12:26 p.m. ET June 19, 2006

WASHINGTON - With the market for corn-based ethanol booming, lawmakers from sugar-producing states are hoping that beet and cane growers can soon jump onto the renewable fuel bandwagon.

They cite the model of Brazil, which produces ethanol made from sugar cane. But critics, pointing out that sugar is much cheaper in Brazil than in the United States, question whether the economics of sugar-based ethanol would work in America.

"Brazil is a unique situation," ConocoPhillips Co. Chairman James J. Mulva said. "Brazil is self-sufficient in energy ... not so much because of ethanol. It's because they have a very strong, growing, thriving oil production, both onshore and offshore."

The Agriculture Department is expected to issue a long-awaited study around July 1 on the viability of converting sugar into ethanol.

Keith Collins, the USDA's chief economist, said the soaring demand for ethanol and Brazil's successful track record make it worth discussing sugar-based ethanol in the United States.

"At some point in the future it may be worthy of commercial development," he said. "Technologically, it's possible. The question is: Is it economically feasible?"

Collins noted that besides cheaper sugar, Brazil has higher yields per acre because of climate and investment in more-productive strains of sugar cane.

"So, obviously, we can look at the technology of conversion, and learn some things from them about that," Collins said. "But it's a little hard for us just to look at Brazil and conclude that their structure of production would be our structure of production. We can't conclude that."

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