It’s Time for New Energy

Editorial

RIO DE JANEIRO, BRAZIL – It is just over a week until official Carnival is here, and the streets are full of excitement. Cariocas and Gringos-in-the-know are keeping an eye out for when their favorite bloco starts, or planning their escape from the crowds. It’s also down to the wire for anyone planning to see the big show at the Sambódromo on March 6th and 7th, as tickets become harder to find.

The city feels full of tourists, despite the weak Dollar, and it’s the time of year when many businesses count on a big spike. Especially in the travel and tourism industry, hotels and hostels are booked solid and the restaurants are bustling. ‘Tis the season.

With so much fun to focus on, some of the city’s more serious issues can fade to the background, but we wanted to lead this week with the new Peace Force in the Zona Norte (North zone) favelas. It is hard to believe just three months ago Rio was under siege by disgruntled drug gangs.

The police, not without their own problems, have restored order for the time being. If there is one thing Rio cannot afford is anymore displays of widespread civil violence, especially during the peak tourist season. Fortunately, everyone in Rio – even the gangsters – takes a break for Carnival.

But now is no time to forget about the near 2,000 soldiers being rotated into Complexo do Alemão, and how important it is that the mission goes well. Everyone (except the drug gangs) wants them to succeed, but to do this they conduct themselves correctly – which this new Peace Force will hopefully manage with new energy.

From a national and global perspective, a very different topic has drawn momentum with the US$12 billion merger and creation of a new biofuels giant. Multinational Oil leader Shell, and Brazilian Cosan have joined forces to create Raizen (concatenation of words ‘root’ and ‘energy’) to commoditize sugar cane for biofuel development.

The new company will be Brazil’s fifth largest, and third largest fuel distributor in country. Brazil is currently the world’s largest exporter of ethanol fuel, and is considered the world leader in the development of a sustainable biofuels economy, which has been in operation for over 30 years.

Since 1976 all small cars in Brazil are required to run on a blend of gasoline and ethanol. In 2007, the government has mandated a blend of 25 percent ethanol and 75 percent gasoline. This is from a country that also recently discovered massive pre-salt oil fields deep under the ocean off the southeastern shore.

While detractors lobby about the environmental harm and carbon footprint biofuels leave, it seems a generally positive step away from the well documented destructive pollution of fossil fuels. While the forecast is slowly changing, and innovation has yet to solve societies sustainable energy needs, it’s great to see Brazilian business invest in the potential… although not sure how Shell shareholders will make it a priority.

While not able to find something comparable for global or Brazilian data, this projection from the U.S. Energy Information Administration helps put things in perspective.