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Brazilian drivers spoiled for choice at the pump

SAO PAULO, Brazil — Here’s an alternative fuels word problem that might baffle even the best U.S. math students:

Jose drives his black flex-fuel Toyota Corolla into a Esso station on Rua Henrique Schaumann, a busy thoroughfare in Sao Paulo. He sees that gas costs 2.60 Brazilian reais per liter and ethanol costs 1.55 reais per liter. If Jose wants to get the most mileage for his money, which fuel should he choose?

But for Brazilians, especially the millions who drive flex-fuel cars that run on any mixture of gasoline and ethanol, that question is a breeze.

“Here’s the rule of thumb,” said Jose himself, full name Jose De Luca, a 30-year-old industrial engineer. “When the price is 70 percent or less the price of gas, it’s worth using ethanol.”

He’s got the right idea, says Adriano Pires, an economist and director of the energy consulting firm Centro Brasileiro de Infra Estrutura. According to Pires, the 70 percent figure is generally accepted as correct, although it can vary slightly depending on a car's make and model.

Not everyone relies on the 70 percent rule. Guilherme Sokolowski, a personal trainer, ran a test on his silver Fiat Estrada, making it 350 kilometers (218 miles) on a tank of ethanol and 450 kilometers (280 miles) on a tank of gas. Though he couldn’t quite explain how he determined the tipping point between when to choose ethanol or gas, Sokolowski said that he would switch to gas only if ethanol broke 1.90 reais per liter (holding gas prices constant). For those keeping score, that’s at 73 percent the price of gas, whereas Sokolowski's unscientific experiment showed ethanol to be 78 percent as efficient as gas.

These days, there isn't much of a choice to make: What Brazilians call “alcool,” or alcohol — costs about 60 percent as much as gas, clearly making it the better deal. Owners of older cars — and some fancy makes that don’t produce flex-fuel models — look on as their compatriots save money. “It’s a huge win for the consumer,” said Pires, the economist.

Ethanol sales are still hurt by stubborn myths: it evaporates quickly, it damages the engine, and other things that industry experts generally say are not true. Severino Valdevino, a driver who was filling up his boss’s gas-only BMW at the Esso station, drives a flex-fuel car himself, and knows ethanol is the better deal. But one out of four fill-ups, he strays. “The dealer told me to put in some gasoline once in a while,” he said.

Millions of flex fuel vehicles are also on the road in the United States. But when it comes to the availability of ethanol, the difference between the U.S. and Brazil is dramatic. In Brazil, just about every gas station in the country sells it, compared to a tiny fraction of U.S. stations. That’s largely the result of efforts by Brazil’s former military dictatorship’ to promote sales of ethanol-only cars in the 1980s. When flex-fuel cars — which run on any mix of ethanol and gasoline — became available in 2003, Brazilians started snapping them up. By 2007, flex cars were outselling gas-only cars by nearly 10 to one.

Meanwhile, when oil prices skyrocket, U.S. citizens are left with few alternatives to paying the asking price: stay home (if possible), walk or bike (if feasible), take public transportation (if available), and make a mental note to buy a more fuel-efficient car. But what the U.S. can learn from the Brazilian experience is muddled by all kinds of political, agricultural and environmental issues, not to mention tariffs that protect more expensive corn-based U.S. ethanol against sugar-cane ethanol imports. Then, of course, there’s the difficulty of retrofitting U.S. gas stations without a military dictatorship to force the point.

Meanwhile, the Brazilians are rubbing it in with a third option, natural gas, which is also available at many filling stations. This one’s a bit trickier. Drivers usually pay to have their car modified to use natural gas, and they lose some trunk space to the new tank. Back to the word problem subject for clarification.

“The natural gas calculation is different,” Jose De Luca said. “The way it was explained to me, you have to drive a lot — 80 or 100 kilometers a day — for it to be worth the initial investment."

Which explains why natural gas is an especially popular choice among Brazilian taxi drivers.

http://www.globalpost.com/dispatch/brazil/081223/brazilian-drivers-spoiled-choice-at-the-pump