Brazilian Ethanol: World’s Richest Investors Are Starting to Pile In!

George Soros’s Adeco has recently bought a major ethanol plant in Brazil. Bill Gates acquired a share in three new plants in Brazil’s western state of Mato Grosso do Sul. Even Google’s Larry Page and Sergei Brin have revealed plans to invest in Brazilian ethanol. International companies are one step ahead of them: Infinity Bio-Energy, which trades on the London exchange, already operates Brazilian ethanol plants valued at $200 million and plans to invest another $500 million in five more plants by year-end. Evergreen, a British group, has recently bought Cridasa, a major ethanol producer i

Now, that future is here:

Every country on the planet wants to see more of its automobiles running on renewable fuels like ethanol. And with 600 million gas- and diesel-burning cars and trucks on the road today, that implies the most massive transformation since the industrial revolution. Every major government is implementing policies that stimulate ethanol consumption. And with hundreds of billions of public money pouring into research and development, this is not exactly a temporary fling. Wealthy individuals, large banks, major mutual funds are all looking more seriously at ethanol. And yet, the big flows of investment money into ethanol have barely begun. Why the Hesitation?

I Count Three Reasons ...

• First, some investors seem to think investing in ethanol is strictly for environmentalists. They don’t believe global warming is a man-made phenomenon, and they don’t agree that cars should have to shift from gasoline to biofuels. So they don’t see much future in ethanol.

Big mistake! The shift to ethanol is not just about burning cleaner fuel. As Elisabeth’s father pointed out over three decades ago, ethanol is also about reducing our dependence on petroleum imports ... slashing our vulnerability to wars and revolutions in oil-rich regions of the globe ... and gaining firmer control over our own destiny.

• Second, investors have focused on the fact that gas stations in the U.S. are resisting alternative fuels, making it almost impossible for ethanol to reach American consumers.

But as I’ll show you in a moment, the consumption of pure ethanol (the kind that is being resisted in the U.S.) is not the primary source of demand today. Moreover, the U.S. is just one of many growing world markets.

• Third and most recently, some investors have hesitated to move into ethanol because they see petroleum prices coming down. If oil prices don’t go up, they figure, ethanol won’t make it either.

We disagree. The price for crude oil could fall to $40 per barrel, and it would barely make a dent in a massive global transformation to ethanol that’s now under way. Most important, their hesitation is your opportunity. It has helped bring down the price of some of the leading ethanol stocks. And it has opened a brief time window to jump in. I’ll show you where in a just moment. But first, join me on a brief global tour — so you can see for yourself how broadly based the ethanol revolution has already become.

A New Mega-Industry Is Born

For at least two decades — from the early 1980s to the early 2000s — the ethanol industry was largely stagnant.

Ethanol production in the U.S. and Canada was growing, but only gradually. Brazil’s ethanol output was actually sliding. And worldwide output was stagnating. Then, at the turn of the new millennium, two things happened: The U.S. government and industry began to push ethanol more forcefully. And Brazil, still the world’s leading producer despite the earlier decline, took off!

Result: Worldwide ethanol production has nearly doubled in five years ... the surge in volume has triggered the development of new, more efficient technologies ... and a new mega-industry has been born.

Right now, the only country with cars running on pure ethanol is Brazil. But a mix of ethanol and gasoline is used in the U.S., the European Union, Mexico, India, Argentina, Columbia and, now, Japan. Here’s a country-by-country rundown ...

Brazilian Ethanol: World’s Richest Investors Are Starting to Pile In!

George Soros’s Adeco has recently bought a major ethanol plant in Brazil. Bill Gates acquired a share in three new plants in Brazil’s western state of Mato Grosso do Sul. Even Google’s Larry Page and Sergei Brin have revealed plans to invest in Brazilian ethanol. International companies are one step ahead of them: Infinity Bio-Energy, which trades on the London exchange, already operates Brazilian ethanol plants valued at $200 million and plans to invest another $500 million in five more plants by year-end. Evergreen, a British group, has recently bought Cridasa, a major ethanol producer in

I Count Three Reasons ...

• First, some investors seem to think investing in ethanol is strictly for environmentalists. They don’t believe global warming is a man-made phenomenon, and they don’t agree that cars should have to shift from gasoline to biofuels. So they don’t see much future in ethanol.

Big mistake! The shift to ethanol is not just about burning cleaner fuel. As Elisabeth’s father pointed out over three decades ago, ethanol is also about reducing our dependence on petroleum imports ... slashing our vulnerability to wars and revolutions in oil-rich regions of the globe ... and gaining firmer control over our own destiny.

• Second, investors have focused on the fact that gas stations in the U.S. are resisting alternative fuels, making it almost impossible for ethanol to reach American consumers.

But as I’ll show you in a moment, the consumption of pure ethanol (the kind that is being resisted in the U.S.) is not the primary source of demand today. Moreover, the U.S. is just one of many growing world markets.

• Third and most recently, some investors have hesitated to move into ethanol because they see petroleum prices coming down. If oil prices don’t go up, they figure, ethanol won’t make it either.

We disagree. The price for crude oil could fall to $40 per barrel, and it would barely make a dent in a massive global transformation to ethanol that’s now under way. Most important, their hesitation is your opportunity. It has helped bring down the price of some of the leading ethanol stocks. And it has opened a brief time window to jump in. I’ll show you where in a just moment. But first, join me on a brief global tour — so you can see for yourself how broadly based the ethanol revolution has already become.

A New Mega-Industry Is Born

For at least two decades — from the early 1980s to the early 2000s — the ethanol industry was largely stagnant.

Ethanol production in the U.S. and Canada was growing, but only gradually. Brazil’s ethanol output was actually sliding. And worldwide output was stagnating. Then, at the turn of the new millennium, two things happened: The U.S. government and industry began to push ethanol more forcefully. And Brazil, still the world’s leading producer despite the earlier decline, took off!

Result: Worldwide ethanol production has nearly doubled in five years ... the surge in volume has triggered the development of new, more efficient technologies ... and a new mega-industry has been born.

Right now, the only country with cars running on pure ethanol is Brazil. But a mix of ethanol and gasoline is used in the U.S., the European Union, Mexico, India, Argentina, Columbia and, now, Japan. Here’s a country-by-country rundown ...

Brazilian Ethanol: World’s Richest Investors Are Starting to Pile In!

George Soros’s Adeco has recently bought a major ethanol plant in Brazil. Bill Gates acquired a share in three new plants in Brazil’s western state of Mato Grosso do Sul. Even Google’s Larry Page and Sergei Brin have revealed plans to invest in Brazilian ethanol. International companies are one step ahead of them: Infinity Bio-Energy, which trades on the London exchange, already operates Brazilian ethanol plants valued at $200 million and plans to invest another $500 million in five more plants by year-end. Evergreen, a British group, has recently bought Cridasa, a major ethanol producer i

But as I’ll show you in a moment, the consumption of pure ethanol (the kind that is being resisted in the U.S.) is not the primary source of demand today. Moreover, the U.S. is just one of many growing world markets.

• Third and most recently, some investors have hesitated to move into ethanol because they see petroleum prices coming down. If oil prices don’t go up, they figure, ethanol won’t make it either.

We disagree. The price for crude oil could fall to $40 per barrel, and it would barely make a dent in a massive global transformation to ethanol that’s now under way. Most important, their hesitation is your opportunity. It has helped bring down the price of some of the leading ethanol stocks. And it has opened a brief time window to jump in. I’ll show you where in a just moment. But first, join me on a brief global tour — so you can see for yourself how broadly based the ethanol revolution has already become.

A New Mega-Industry Is Born

For at least two decades — from the early 1980s to the early 2000s — the ethanol industry was largely stagnant.

Ethanol production in the U.S. and Canada was growing, but only gradually. Brazil’s ethanol output was actually sliding. And worldwide output was stagnating. Then, at the turn of the new millennium, two things happened: The U.S. government and industry began to push ethanol more forcefully. And Brazil, still the world’s leading producer despite the earlier decline, took off!

Result: Worldwide ethanol production has nearly doubled in five years ... the surge in volume has triggered the development of new, more efficient technologies ... and a new mega-industry has been born.

Right now, the only country with cars running on pure ethanol is Brazil. But a mix of ethanol and gasoline is used in the U.S., the European Union, Mexico, India, Argentina, Columbia and, now, Japan. Here’s a country-by-country rundown ...

Brazilian Ethanol: World’s Richest Investors Are Starting to Pile In!

George Soros’s Adeco has recently bought a major ethanol plant in Brazil. Bill Gates acquired a share in three new plants in Brazil’s western state of Mato Grosso do Sul. Even Google’s Larry Page and Sergei Brin have revealed plans to invest in Brazilian ethanol. International companies are one step ahead of them: Infinity Bio-Energy, which trades on the London exchange, already operates Brazilian ethanol plants valued at $200 million and plans to invest another $500 million in five more plants by year-end. Evergreen, a British group, has recently bought Cridasa, a major ethanol producer i

A New Mega-Industry Is Born

For at least two decades — from the early 1980s to the early 2000s — the ethanol industry was largely stagnant.

Ethanol production in the U.S. and Canada was growing, but only gradually. Brazil’s ethanol output was actually sliding. And worldwide output was stagnating. Then, at the turn of the new millennium, two things happened: The U.S. government and industry began to push ethanol more forcefully. And Brazil, still the world’s leading producer despite the earlier decline, took off!

Result: Worldwide ethanol production has nearly doubled in five years ... the surge in volume has triggered the development of new, more efficient technologies ... and a new mega-industry has been born.

Right now, the only country with cars running on pure ethanol is Brazil. But a mix of ethanol and gasoline is used in the U.S., the European Union, Mexico, India, Argentina, Columbia and, now, Japan. Here’s a country-by-country rundown ...

Brazilian Ethanol: World’s Richest Investors Are Starting to Pile In!

George Soros’s Adeco has recently bought a major ethanol plant in Brazil. Bill Gates acquired a share in three new plants in Brazil’s western state of Mato Grosso do Sul. Even Google’s Larry Page and Sergei Brin have revealed plans to invest in Brazilian ethanol. International companies are one step ahead of them: Infinity Bio-Energy, which trades on the London exchange, already operates Brazilian ethanol plants valued at $200 million and plans to invest another $500 million in five more plants by year-end. Evergreen, a British group, has recently bought Cridasa, a major ethanol producer i

Brazilian Ethanol: World’s Richest Investors Are Starting to Pile In!

George Soros’s Adeco has recently bought a major ethanol plant in Brazil. Bill Gates acquired a share in three new plants in Brazil’s western state of Mato Grosso do Sul. Even Google’s Larry Page and Sergei Brin have revealed plans to invest in Brazilian ethanol. International companies are one step ahead of them: Infinity Bio-Energy, which trades on the London exchange, already operates Brazilian ethanol plants valued at $200 million and plans to invest another $500 million in five more plants by year-end. Evergreen, a British group, has recently bought Cridasa, a major ethanol producer in Minas Gerais. And the French group Tereos bought 6% of Brazilian ethanol producer Cosan and owns three plants.

Overall, investments in Brazil’s ethanol industry are surging. In 2005, they were about $6 billion, including new plants, acquisitions and expansions. In 2006, they’ve surged to nearly $10 billion. And by 2010, even if there’s a recession in the U.S., they should hit at least $15 billion.

The main attraction: Ethanol is transforming Brazil’s economy, and Brazil’s ethanol technology is about to transform the world.

The key factor: Innovative ways of lowering the cost of production. Back in 1980, it cost Brazil’s ethanol producers over $2.60 to make just one gallon — not exactly competitive with gasoline!

But now, Brazil is churning out ethanol for a meager 75 cents per gallon. And Brazil’s science agencies are funding a raft of new R&D to drive the cost down even further. So even if petroleum and gasoline prices fall further, Brazil’s ethanol will remain extremely competitive. Already, nearly every single car rolling off Brazil’s assembly lines has a flex engine capable of burning either ethanol or gasoline. So when we’re driving in Brazil, we can fill up with whichever fuel happens to be cheaper. And when our tank is half empty, we can even mix the two fuels at will. The flex engine has far-reaching implications. And although it’s going to take time, ultimately, I see nothing that can stop it from spreading to the world’s largest fuel consumers — the U.S., Europe, Japan, China and India.

Even before that technological shift takes place, Brazil’s shipments of ethanol to overseas markets are surging. Late last year, it jumped 91 percent to 144 million gallons from 76 million gallons a year earlier. Plus, Brazil is negotiating with Japan, China, India and the EU to export still more. Even Brazil’s ethanol exports to the U.S. are growing despite a huge, 50-cent-plus tariff per gallon.

U.S. Ethanol Industry Starting to Ramp Up

As you well know, in the realm of petroleum and gasoline, production in the U.S. has been stagnant, with virtually no new refineries built in the U.S. since 1976.

Not so in the ethanol industry! Even while America’s oil refineries were aging, over 100 new ethanol production facilities have been built in the United States.

And that was mostly before August 8, 2005, when President Bush signed the Energy Policy Act — a renewable fuels standard that should double the use of ethanol and biodiesel by 2012. Indeed, even the normally cautious U.S. Department of Energy predicts that ethanol could put a 30% dent in America’s gasoline consumption by 2030.

But those projections are probably low, especially after the Democratic takeover of Congress this week, which opens the door to a bigger-than-expected push for ethanol. House Speaker Nancy Pelosi has proposed a doubling of the amount of ethanol required by law to be blended into gasoline by 2012.

Collin Peterson of Minnesota, who has just taken over the House Agriculture Committee, says he will also be more aggressive in seeking ethanol subsidies.

And other House Democrats say they plan to establish a dedicated fund to promote renewable energy and conservation, with a lot of the money going into research for making ethanol from sources other than corn.

Japan: Ethanol Sleeper Wakes Up

Until recently, Japan was the world’s largest sleeping giant with respect to biofuels. Now it’s wide awake and leaping forward.