A fortuitious twist of events brings me a helicopter ride and insight on the ethanol opportunity

Fortunately for me, Jack's plane from San Francisco was delayed and he missed the flight to Brazil. I took his place in our meetings over the past two days with Cosan, the world's largest exporter of both sugar and ethanol, an alternative fuel which if adopted could reduce global oil consumption signficantly. As one article I found puts it,"if the car industry adopts ethanol worldwide, Brazil is poised to become the Saudi Arabia of alternative fuel."

Brazil is leading the way in ethanol adoption, where 80% of new cars are flex fuel vehicles, meaning they can run off both gasoline and ethanol. Ethanol, which is cleaner and cheaper than gasoline, can be produced from corn, beets, and sugar cane. You may have seen G Dub's recent commentary about reducing oil consumption by shifting to alternative fuel sources such as ethanol. The twist is, he's only talking about ethanol derived from corn grown in the US - a SIGNIFICANTLY less efficient way to produce ethanol than sugar cane. We're talking almost 4 and a half times less efficient. More on ethanol fuel on wikipedia here: http://en.wikipedia.org/wiki/Ethanol_fuel if you are interested. Really great article explaining the politics of it here: http://www.sptimes.com/2005/11/09/Business/Struggling_over_sugar.shtml

So Cosan is interesting because they produce clean fuel. They are also interesting because they produce clean electricity. Bagasse, the fibrous material remaining after sugar cane is crushed, can be burned and converted into electricity via steam turbines. Many sugar mills do this to meet all their energy needs, often with excess electricity to sell to the grid. Though the burning process emits carbon dioxide into the atmosphere, it's still carbon neutral as that which is emitted is equivalent to that which is absorbed in the growing process. All this is what I learned about over the past few days.

Yesterday were meetings giving us the industry overview and Cosan's strategic direction. Today we saw it all first hand in our visit to one of their sugar mills which also happends to be the world's largest in terms of the amount of cane it can process in a day (38,000 tons). Turns out that helicopters are very common forms of transportation in Brazil - check out al the helipads on top of buildings in that first picture! It was my first helicopter ride and a very awesome way to see Sao Paulo (what a HUGE city) and the surrounding country side.

Our tour spanned the entire production cycle - from harvest in the fields (both manual and mechanical), to crushing on the cane, to both ethanol and refined sugar production. And of course, a firsthand look at the electricity generation.

As you can see from the pics, quite a different operation than selling an electronic product! I never thought I'd be doing this on my trip, but what an awesome, awesome experience it's been.