Gulf Crisis May Rejuvenate Alcohol Cars

The Persian Gulf crisis has given new life to Brazil’s program to run its vehicles on sugar-cane alcohol instead of gasoline.

Shortages of the costly sugar-cane fuel and an abundance of inexpensive foreign oil had turned Brazilians off to alcohol.

But as oil prices have skyrocketed in the wake of Iraq’s takeover of Kuwait, another look is being taken at one of the world’s leading alternative fuel programs, called Pro-Alcohol here.

General Motors and Autolatina, a production consortium that includes Ford and Volkswagen, announced an 11% increase in production of cars able to run on alcohol to meet the rise in demand.

The rejuvenation of Pro-Alcohol is good news for owners of Brazil’s 4.5 million alcohol cars--a third of the nation’s vehicles--who at one time believed that the clean, sweet-smelling fuel was the energy of the future.

The program began in response to the OPEC oil shock of 1973. Brazil, which imported 80% of its petroleum, saw its oil bill soar from $600 million to $2 billion in 1974, or one-fourth of total imports.

Alcohol seemed the solution. Sugar cane grows abundantly here. And having a local source of fuel fit the “national security” concerns of the military governments that ran Brazil from 1964 to 1985.

In 1979, 2,271 cars were sold that ran solely on pure alcohol.

To compensate for poor mileage in these first models, the government made alcohol 35% cheaper than gasoline and offered tax breaks on alcohol cars. Sales of the cars rose to 38% of the market in 1982 and 88% the next year.

In 1985, the peak for alcohol cars, 96 of every 100 cars sold were alcohol-powered.

Then oil prices began falling and alcohol, which was $40 a barrel, became comparatively too expensive.

In another irony, Brazil discovered major offshore oil reserves of its own. The country’s foreign oil dependency fell under 50%.

Finally, in 1989, high sugar prices on the international market led cane growers to make sugar instead of alcohol. Suddenly there wasn’t enough alcohol fuel.

Long lines formed at service stations, and motorists pushing alcohol cars that had run out of fuel became a common sight.

Popular TV game-show host Fausto Silva poked fun at the Pro-Alcohol slogan, joking on his weekly program, “Alcohol cars: someday you’ll push one.”

Sales of alcohol cars plummeted below 5 percent of the market in July of that year.