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Jun25
Gasoline From Sugar?
With gas prices still giving most of us varying degrees of sticker shock, it looks like more and more folks want to get into the alternative fuels game. According the the AP, politicians may be sticking their fingers into the pie.

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.

Visions of sugarplums have apparently been replaced by dollar signs.

Both politicians and business leaders and entrepreneurs are eagerly awaiting an Agriculture Department report on the viability of converting sugar into ethanol. The report is slated to be released July 1.

Sugar in the U.S. is made from two sources: beets in some northern and western states, and cane in a few southern states and Hawaii.

Want to guess which state leads the pack in producing sugar from beets? We were both wrong - it's Minnesota. Go figure. Florida produces the most sugar from cane, FYI.

But, if you think there won't be repurcussions, think again.

"One of the things that people ... need to think about it is what generation of ethanol do they want to pursue? The corn-based or the sugar-based ethanol, which is called first-generation ethanol, is going right at the food costs," said John Hofmeister, president of Shell Oil Co.

"In other words, there's only so much corn, and if oil companies are attacked for the price of gasoline and we've seen ethanol go from $1.20 a gallon in 2005 to last week it was hitting $5 a gallon on the spot market _ if we start sucking up, as oil companies, all the ethanol, it's going to hit the price of eggs, the price of bacon, the price of hamburger, the price of Doritos and Fritos, because there's only so much corn to go around," he said.

So, cheaper gas, but pricier tortilla chips? Now hold on a second...

Lawmakers and industry leaders are encouraged by the example of Brazil.

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.

The article also points out that it took 30 years of government involvement to get Brazil to where it is now. I'm not sure if I'm ready to give that much power to politicians and both the state and federal level. It seems like everything they get involved, it somehow costs me more.

We'll be watching.


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