Officials from the Georgia Department of Economic Development, Metro Atlanta Chamber of Commerce and some of the state's top ethanol experts just returned from a mission to Brazil to learn everything they could about how the South American country has built a vibrant alternative fuel industry.
 
The goal was to gather facts on new cutting-edge production methods, to see how ethanol is distributed, and whether Georgia could partner with Brazil to import ethanol on a mass scale.
 
The study is an initiative of Commissioner Ken Stewart, who is awaiting a report later in December. That report, he hopes, will lead to improved ways to capitalize on Georgia's abundant timberlands and lay out the framework toward building a distribution system here. Ethanol, he says, has the potential to keep more of the money spent on fuel in the state, develop rural areas and at the same time improve the environment.
 
Leaders who went on the mission say Georgia could be a major player in the global ethanol industry, given the state's resources, which also includes the Port of Savannah.
 
"Our ports are ready to receive ethanol now," said Tim Perry, vice chairman of the Metro Atlanta Chamber's global commerce council and honorary consul to Brazil in Atlanta. "It's now a matter of proper distribution. It could happen soon."
 
In 2006, according to the Renewable Fuels Association, 434 million gallons of Brazilian ethanol was shipped into the U.S., mostly to cities with ethanol mixing facilities such as New York and Baltimore. Meanwhile, the U.S. didn't export a single gallon. Team members say Georgia could eventually be both an exporter of fuel to other countries as well as a major importer of fuel from Brazil.
 
"What we found was that there may be some opportunities to import ethanol from Brazil, and [that] Georgia might also be an exporter," said Davis Cosey, CEO of Perry, Ga.-based petroleum marketer Davis Oil Co. "There are lots of opportunities for both. There's going to be a worldwide need for ethanol."
 
Brazil's ethanol program started in the mid-1970s during the worldwide oil crisis. While U.S. automobiles are just starting to come with options to use heavy ethanol blends, millions of vehicles in Brazil have been available for years that can use 85 percent to 100 percent ethanol.
 
While vehicles running on ethanol get fewer miles per gallon than cars running on petroleum, the alternative fuel is cheaper. The price could drop even more if the production process becomes more efficient. Sugar cane ethanol is produced by crushing stalks to produce juice, which is then distilled into usable fuel. But researchers believe they can take the waste, called bagasse, and extract more fuel out. The process creates so-called cellulosic ethanol and is a top interest to leaders in Georgia, as the same concept could be applied to the millions of tons of wood waste produced each year.
 
"We don't grow sugarcane, but we can apply Brazil's concepts here," said team member Nathan McClure, chief forester with the Georgia Forestry Commission.
 
The team's visit to Brazil came on the heels of a March deal between President George W. Bush and Brazilian President Luiz Inácio Lula da Silva to increase international production of ethanol.
 
"We thought it was a great opportunity to launch Georgia on the leading edge of this agreement," said Jorge Fernandez, vice president of global commerce for the Metro Atlanta Chamber.
 
Currently, there are at least five companies gearing up to produce ethanol in the state including Sriya Innovations Inc., which wants to build a biorefinery to convert wood scraps into fuel.
 
Georgia has a lot to learn from Brazil. But whether ethanol will take off depends on more factors than just producing enough refineries.
 
No. 1 on the list is having automobiles that can run on high mixtures of ethanol. Most cars can run on blends of 90 percent gasoline and 10 percent ethanol. But special "flex-fuel" technology is needed for fuel with more than 10 percent ethanol.
 
Finding gas stations that pump that much is an even tougher task. According to e85vehicles.com, only five exist in Georgia. However, every one of Shell's 200-plus stations in metro Atlanta have up to 10 percent of ethanol in the mix, says Cosey. He adds that the number of e10 stations in the state will start to increase dramatically as the state government loosens various guidelines next year. And then, he says, it's only a matter of time before consumers demand higher blends.
 
But more flex-fuel cars and pumps are only part of the solution. Perhaps the biggest challenge awaiting Georgia and the United States is logistics, he and others say. State leaders are looking into everything from processing to transportation. Currently, for example, ethanol is not piped due to engineering difficulties. But Brazil has been doing it for years.
 
Alpharetta-based Colonial Pipeline Co. is working with Georgia Tech to explore whether ethanol can be transported through its current system.
 
"Georgia can become the logistics center of ethanol distribution for the Southeast," said Perry.
 
Atlanta Business Chronicle - by Justin Rubner Staff Writer
Reach Rubner at jrubner@bizjournals.com.