The Wall Street Journal and Reuters are reporting this morning that Archer Daniels Midland, the agriculture company that is the biggest player in the U.S. corn ethanol business, might start making sugar ethanol in Brazil. Hard to tell whether it would be a good move for ADM. But on balance it wouldn't be a bad thing for U.S. energy policy to have this politically powerful company get a financial stake in the only kind of ethanol production that seems to make sense and is now essentially banned for U.S. consumers.

Refining sugar for ethanol is much more efficient than refining corn. Raw cane has more calories than raw corn, and sugar produces much more "energy returned on energy invested" (EROEI) than corn. Even corn-ethanol fans rarely claim that it has an EROEI of more than 2. A research survey by the Natural Resources Defense Council looked at five studies that reported a corn ethanol EROEI of between 1.29 and 1.65. In other words, it takes as many as 100 units of oil, natural gas, coal or other traditional energy to produce only 129 units of so-called "renewable" corn ethanol energy. This is not going to do much to reduce U.S. dependence on foreign oil or fossil fuels. The juice ain't worth the squeezing. A professor at Cornell named Pimental says making ethanol consumes more energy than it produces -- a net energy loss for the economy. Sugar ethanol, on the other hand, has an EROEI of at least 3 and as high as 10 in some studies.

Brazil has successfully been making sugar ethanol for years at prices per gallon that are much lower than the present price of U.S. gasoline. But alas, Congress in its wisdom has fastened a 54-cent-a gallon tariff on any imported ethanol. If ADM gets involved in Brazil, perhaps pressure to get rid of this ridiculous law will increase. Brazilian ethanol production is not without its big downsides: Rainforest is being bulldozed to plant sugarcane. But sugar ethanol makes a lot more sense than corn ethanol, and in the right circumstances it could contribute to this country's energy future.