The Ethanol Solution

Gas prices are passing $3 a gallon and climbing, oil companies are making record profits and there is serious concern about this country's dependence on foreign oil. Those things have sparked a lot of talk about using something else, instead of oil, to fuel our cars.

As correspondent Dan Rather reports, Brazil faced similar problems and already has solved most of them. Instead of gasoline, many Brazilians are using ethanol - which can be made from plants into a kind of alcohol - to power their cars. It's cheaper and cleaner. As a result, Brazil has virtually stopped importing expensive foreign oil.

So, 60 Minutes wondered: Why can't we do that here in the United States? Farmers, automakers, Wall Street investors and many scientists think it can be done.

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"Fifteen years ago Brazil made a commitment to burning ethanol made from sugar cane as a primary vehicle crop. And lots of energy analysts have scoffed at the idea," says professor Daniel Kammen, who heads the Renewable Energy Lab at the Berkeley campus of the University of California, where he studies ethanol and other alternative fuels.

Dr. Kammen watched Brazil's ethanol experiment for years. "They saw the price trends of ethanol from sugarcane going down, and, of course, the global price of gasoline going up," he says. "And so they emerged at this wonderful time with a program that had been thought through. They made it work - and it wasn't even that hard."

60 Minutes traveled to Brazil to see how they made it work. Brazil had two problems: they grew more sugarcane than they could sell and their economy was being strangled by the high price of imported oil.

Making ethanol out of sugarcane solved both problems. In cities like Sao Paulo, with 18 million people, they call ethanol "álcool," and it's sold at every gas station, right alongside gasoline.

Ethanol really took off in Brazil when "flex-fuel" cars went on sale four years ago. These cars gave drivers a choice: they can use gas, or ethanol, or any combination of the two. Because ethanol is cheaper, the law of supply and demand took care of the rest.

There's already a substantial supply of ethanol here in the U.S., where the fuel is made from corn instead of sugar-cane.

You might have noticed at your local gas station that ethanol is already in the fuel. In some places, it's 10 percent ethanol. Oil companies add some ethanol to gas because it boosts octane. But using ethanol as an additive won't replace much foreign oil, unless Americans switch to what's called "E85" - 85 percent ethanol and 15 percent gas.

But it's not a simple switch to make. Out of about 170,000 gas stations in the U.S., only 650 sell E85. And, the engines in conventional cars may not perform as well with E85, and could be damaged by it.

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