Monday, February 20, 2006

Alternative Fuels

How about sugar cane ethanol from Latin America and the Caribbean?

The United States could reduce dependency on the Middle East by importing sugar-cane derived ethanol and save money doing so, even after deducting the cost of retrofitting car engines. Sugar cane is grown in hot, wet tropical countries, not in Iowa (except at exorbitant cost), but there are a whole host of such countries available, in the Caribbean and the northern reaches of South America, only one of which, Venezuela, is a significant oil exporter -- in some cases, such as Haiti, the United States is committed to propping the place up anyway...

The strategic problem with oil is not that it has to be imported, but that it has to be imported from a relatively small group of countries, most of which are both corrupt and intrinsically somewhat hostile to the United States. Since oil production requires a large concentration of capital equipment, under extraction agreements with the host government, oil revenues tend to produce massive corruption of government officials, wasteful prestige projects and arms buildup rather than genuine economic development. Sugar-cane, on the other hand, is intrinsically a private sector crop, requires only modest capital investment and is fairly labor intensive even with modern cutting technology. Hence growth in the sugar-cane sector is likely to help development and facilitate the growth of a stable middle class in countries of the Caribbean, Central America and northern South America for which the United States has always taken a fatherly interest.

There's a reason for the absence of sugar-cane from Bush's speech: the demands of domestic U.S. politics. Sugar-cane growers in the Caribbean and South America are unlikely to provide significant campaign contributions, so are not a favored class. Indeed, sugar imports to the United States are currently regulated by the "Global Refined Tariff Rate Sugar" program, which prevents significant competition to coddled domestic sugar producers. Needless to say, domestic sugar producers are major campaign contributors, particularly in the key state of Florida.


Blogger All_I_Can_Stands said...

Good idea. I am all for anything that will help boost the economy of Latin America.

My take is that if a Democrat were president, this idea would be hailed as wonderful by the media and the elites. If Bush suggests it, he will be accused of exploiting the poverty of Latin America.

2/21/2006 8:54 AM  

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