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Sunday, May 07, 2006

This column explores initiatives to improve the business climate of our nation and make Guyana Open for Business a reality. Peter R. Ramsaroop, MBA Chairman, RoopGroup

This is my third column over the last year on the topic of ethanol and the opportunity it poses for Guyana. The price of gas in the US is at a record high and although there has been much talk in the past couple of weeks about the need for Americans to cut back on their gasoline usage in an attempt to curb the "supply and demand" increases, there just does not seem to be much of a move in that direction.

There are some who have decided to start using public transportation a bit more, some who have instead chosen to pawn their valuables to pay for a tank of gas and even some who have given up fossil fuel altogether and are riding their bikes to work in the mornings.

However, for the most part it seems that America has decided to continue on its path of mind-boggling fuel consumption and still demand that the government do something about the rising costs of petrol. Understanding his role in this theatrical presentation, President Bush enters right on cue to offer his country some hope of economic fuel relief.

Bush gave his speech on Tuesday to the attendees of a small renewable fuels summit in Washington, DC with an ethanol association logo as the backdrop. He said, "Our addiction to oil is a matter of national security concerns. After all, today we get about 60 percent of our oil from foreign countries. That's up from 20 years ago, where about 25 percent of our oil came from foreign countries."

He termed America's exuberant usage of oil as an "addiction" - that is putting it mildly. Lester R. Brown, president of Earth Policy Institute, said in his book, Plan B 2.0, that although China has replaced the United States as the world's leading consumer in grain, meat, coal and steel, America still consumed three times as much oil as China in 2004.

Considering that the population of the US is about 300 million while the population of Chin is well over 1.3 billion, calling the consumption rate of oil in America an "addiction" is certainly an understatement.

Perhaps "obsession" would be a more fitting word.

This is the portion of Bush's speech that Guyana should take note of: "Now, as you well know, this year we're undergoing a rapid transition in the primary ingredient in reformulated gas from MTBE (Methyl tert-butyl ether) to ethanol. And I appreciate the role the ethanol producers are playing to meet this challenge."

He continued, "Yet state and local officials in some parts of our country worry about supply disruption for the short term. They worry about the sudden change from MTBE to ethanol - that the ethanol producers won't be able to meet the demand. And that's causing the price of gasoline to go up some amount in their jurisdictions."

I have written on the many benefits of Guyana pursuing ethanol as a national commodity, but if there were ever an opportune time for us to make our move, this is that time. Last year, this might have been a pipe dream for a small country. However, with the current situation in the US, this far away dream has now become a literal pot of gold ready for the taking for any country that is pro-active enough to move fast enough to take advantage of this situation.

As the international consumption rate continues to climb, more governments will follow the example of the US and seek alternative methods to feed their "addiction" to fuel. If Guyana could capture even a small portion of what is sure to be an ethanol frenzy within the next few years, our nation could easily experience an economic recovery and possibly even an economic boon.

Last year, the Brazilian government offered to assist Guyana by helping it find ways to diversify its sugar industry through a cooperative initiative to produce ethanol and last September, the two countries signed an agreement for a transfer of Brazil's ethanol technology. However, on April 16 of this year, Stabroek News reported, "not much progress is visible in terms of this agreement."

With uncertainty overshadowing the immediate future governance of the nation while the date of the elections is debated a move toward acquiring and implementing ethanol technology seems out of reach.

However, if ever there was a time for Guyana's leaders to come together in unity over a timely matter, this is that time. If Guyana could solidify the ethanol technology transfer within the next few months, our country could have an ethanol plant up and running by the end of the year to offer to the US and other countries.

For all of our untapped potential and missed opportunities, this is one occasion we should not let slip right by. As Bush said on Tuesday, "Renewable energy is one of the great stories of recent years, and it's going to be a bigger story in the years to come." In other words, ethanol producers are likely to see some incredible profits in the very near future.

With the war in Iraq coming in first on the minds of Americans and the immigration issue next, rising fuel prices finishes off the top three most important issues right now for the US All the signs point toward one direction, alternative fuel- and a lot of it.

Why shouldn't Guyana be one of those producers capable of raking in the big profits as well? According to Bush, America used a record four billion gallons of ethanol. With skyrocketing fuel prices, the demand for ethanol as an alternative to petrol will only continue to increase significantly.