Arguments for an ethanol industry for the replacement of sugar

Jun 26, 2017 Letters

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Dear Editor,
I refer to a letter of May 2nd 2017 from Dhanraj Singh and Stephen Kissoon, both economists, captioned “Further downsizing of GuySuCo is poor policy and would lead to one of the worst economic crises in our history” I agree that it would not be advisable, but there is more than a little truth to the following statement “Most Guyanese would agree there are real problems affecting GuySuCo, including production challenges, low productivity, high cost of production, lack of competitiveness, and arguably the worst forms of management corruption” I don’t agree with them that expansion is part of the answer, since until and unless we can mechanize this industry it will never be competitive. Every attempt at modifying our field layout for mechanization has met with disaster because GuySuCo has never hired a world class specialist to spearhead this process through laser leveling and proper field design for inter-row tillage and mechanical harvesting, appropriate mechanical field equipment selection etc. and the 90 ft. cambered bed with cane planted along it has been a disaster for them, it is why GuySuCo should not be in charge of its own diversification, and the reason is simple, it fails to grasp the complexity of diversification and so it is not competent to do so, and must hire outside experts to spearhead the process of each area to be diversified to, they insist on using existing staff whose competence is questionable at best for sugar, but hopelessly inadequate for diversification to other activities, it is why it has never succeeded in diversifying.
MoGas [gasoline] imports to this country for 2015 was 1.267 million barrels, I am estimating that a barrel is the universal 42 gallons, so we imported around 53 million Gallons of gasoline to this country in 2015 [latest annual GEA report available] today it could be more;10 % of this amount would be 5.3 million Gallons. Total price CIF Georgetown for this 53 million gallons of Gasoline was US$ 104,212,712. If we could replace 10% of this gas locally it would represent a foreign exchange saving of US$10.4 M/annum. But where would we find the 5.3 million Gallons of gasoline?
Based on a low estimate of 26 tons of cane per acre, and 22 gallons of ethanol per ton of cane grown, because this is for ethanol production and not sucrose production, the milling of the leaves [being also sugar cane biomass] is as important as the cane stalk, and an acre would yield 22×26 = 572 Gallons ethanol per year. Note: http://grist.org/article/biofuel-some-numbers/ where we see the following
As far as biodiesel is concerned, we know that we can grow Palm Oil and coconuts here, so making a substitute for Diesel is still an option in time. But note that the Palm Oil is the most important plant for biodiesel production.
Even though the caloric value of ethanol is less than Gasoline when burnt, it sells for around the same price, in fact in the US I believe that it sells for more, since as an octane booster it raises the octane of the gasoline it is mixed with, burns cleaner and is renewable. If US$104,212,712 bought around 53,000,000 gallons of gasoline as stated in the GNEA 2015 annual report, it means that the CIF price for gas bought, cost us aroundUS$104,212,712/53Mi.e., around 2 US per gallon. The duty on gas I am told is around 50%, so the selling price for gasoline in Guyana in 2015 would have been US$2+1.2 =US$3.2 per gallon.
Let us use $3 US as the price for a gallon of fuel grade Ethanol, now it is well established that you can put as much as 10% ethanol in the gasoline without modifying a car’s engine, and in fact the engine will work better since the ethanol is cleaner burning and boosts the octane of the entire gasohol mix, so the GNEA which is the only entity authorized to sell gas in Guyana, will by law begin selling this mix of ethanol and Gasoline to the local distributors, but to do that, they will need 5.3 million gallons of the stuff and it will have a value of 5.3M Galx US$3/Gallon = $15.9 million US/year for GuySuCo. I am assuming that the government is enlightened and serious about resolving this issue, and will allow the ethanol to get the maximum price, since it will be saving us having to find US$10.4 million per year in foreign exchange, and there could be no import duty on ethanol fuel made here. I am also assuming that the unions will be more cooperative, they must acknowledge that they have helped to kill the golden goose, so now they must face the consequences with the rest of us.
If we are getting 26 tons of cane per acre and with current technology in Brazil each ton of sugar cane produces around 22 gallons of ethanol, if we need to have 5.3 million gallons @ 572gal/acre= 9,265acres of sugar cane land which will make ethanol and not sugar, now let me pause here and reassure your readers that farmers and the estates’ field and factory workers will not be affected, since we will still be growing sugar cane as usual and grinding it, but we will be making ethanol from it and not sugar at the factory, I have to make this clear since my last letter on the matter created quite a stir, since people [who should know better] thought that we would have to grow alcohol trees to make ethanol.
Tony Vieira

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