Ethanol, A Global Commodity

While the oil industry works very effectively on an international level the ethanol industry could use improvement in this area, particularly in terms of trade, writes Mike Bryan of BBI International.
By Mike Bryan | July 23, 2014

Ethanol produced in Brazil, Mexico or Asia is essentially the same commodity that we produce in America. Yet we export product to Brazil and Brazil exports product to the United States. Admittedly, I don’t know all of the intricacies of why this happens. It does, however, seem odd that ships carrying ethanol pass one another with imports from Brazil to America and America to Brazil, with producers in both countries paying the freight. 

As an industry, we seem to operate in isolation from one another globally, each country doing its own thing with very little communication. I don’t know why.

At the International Fuel Ethanol Workshop & Expo in Indianapolis, Phil Madson from Katzen International raised this point on a panel. “Ethanol is a global commodity and we need to start treating it like a global commodity,” he said. One organization working on the political and educational front is the Global Renewable Fuels Alliance. This organization does represent a number of ethanol associations and producers in various parts of the world, with the ultimate goal of collectively building a stronger, more integrated industry. In terms of trade, however, we need to go further.

The oil industry has its flaws, but one thing stakeholders have done very effectively is work together on an international level. Because after all, oil is oil is oil, they have perfected the art of product exchange and in doing so avoid needless shipping costs wherever possible. At the same time, they have built a global story so everyone is singing from the same hymnal. It seems to me that ethanol is ethanol is ethanol. It makes no difference where it is produced, the product is the essentially the same, the public relation problems (i.e. food vs. fuel, etc.) are universal, production and maintenance issues are similar and the technological challenges required to move to second-and third-generation ethanol are shared by countries worldwide.

We can continue to address these issues individually or we can come together as a global community multiplying our strength many times over. The ethanol industry has already demonstrated what strength in numbers can achieve. I think it’s time to take ethanol to the next level of a true international commodity that freely flows around the world without restrictions and territorialism.

Are the problems facing ethanol so different in Asia than they are in Argentina that we could not learn from one another and even help one another build their industry? The oil industry thinks globally and it’s time we start doing the same.

That’s the way I see it.

Author: Mike Bryan
Chairman, BBI International
mbryan@bbiinternational.com