The Revolution’s Dashed Bioethanol Dreams

Five years on, PDVSA's big plans to turn sugarcane into bioethanol to fuel cars is rusting away in a Cojedes scrapyard.

23

The CADCA Ethanol Plant in Cojedes is in the middle of nowhere. I went there last year as part of an engineering team that was working on the project. It’s surrounded by farms a half hour drive from San Carlos de Austria, the state capital. They say it’s near a caserío called Mata Oscura. If any such place exists, none of us saw it.

The plant was made up of a handful of administrative buildings, some warehouses, the ethanol tanks, and the milling area concrete structure. What made it feel odd  is that few people seemed to be working there. It felt almost abandoned.

That’s not a good sign for a place that, at the time of our visit, had been under construction for five years.

Walking under the white hot llanero sun through endless blocks of carefully arranged equipment, the scene looked more like a cityscape of scrap metal than a storage yard. I saw all kinds of machinery: instruments, pumps, gears, beams, motors, generators, chains, big, small, you name it. There were even tractors originally intended to work the sugarcane plantation.

OLYMPUS DIGITAL CAMERA

All of it had been resting in peace for at least 4 years, waiting for someone to remember that they aren’t supposed to be there forever. I went on the 7 meter high milling concrete structure that is home to the mills and their gearboxes, the only machines that have been installed so far, (while being watched by angry looking wasps that resided there). The detail is that when I looked up I could only see the sun, the blueprints lied to me, I should have seen a roof 25 meters above me.

Some equipment was stored in containers, some was covered with plastic tarps. Some of it was inside rotting wooden boxes designed to store things no longer than six months. Someone had the kindness to move some electric control panels inside the warehouses to protect them from the elements.

Much of the rest of the machinery was not so lucky. There was a terrible sadness as I watched the boiler tubes (which are supposed to work with high pressure steam and demineralized water), partially submerged in mud and rainwater. Most of them were rusted through and unusable by now.

It’s was all terribly dismaying, because bioethanol wasn’t a bad idea. Caracas Chronicles is always going on about how wasteful the policy of giving away gasoline is. Bioethanol was a proper initiative aimed at reducing domestic gasoline consumption. The idea was to free up gas to be sold abroad, saving millions in gasoline subsidies.

Ethanol is basically just alcohol. It’s a biofuel that can be safely mixed with gasoline without having to modify existing engines. It can be produced from a variety of crops, including sugarcane, corn, yucca…pretty much anything.

The Venezuelan ethanol production facilities were named CADCAs, Sugarcane Derivate Agroindustrial Complex (Complejo Agroindustrial de Derivados de Caña de Azucar). As the name implies, the plan was to use sugarcane as a raw material. Ethanol was just one of the products of the plant: animal feed supplements and fertilizer were some others. The framework project also covers the cultivation of the additional sugarcane that the plants would need, as well as trucks and tractors like the ones you see above, etc.

The project was launched in 2005, as the oil boom was gathering steam, and aimed at creating four CADCAs in the first stage of the plan: Barinas, Cojedes, Portuguesa and Trujillo states would each get one. Each was expected to handle 10,000 tons of sugarcane per day to make 700,000 barrels of ethanol per year.

The first part of the process for making ethanol from sugarcane is not that different from making rum: ethanol is really just alcohol, after all. So you start by making juice by milling the sugarcane. After that, the juice is purified, evaporated, fermented and distilled.

At the beginning, the agro branch of PDVSA, PDVSA-Agrícola, hired the Cuban company IPROYAZ to do the engineering for the project, and Brazil’s Odebrecht to do the construction part.

The Cubans mainly took apart their own sugar mills and other equipment from their sugar centrals, refurbished them, and shipped them here. Some of the key equipment dates from the Soviet era, others bits of machinery are completely new. Procurement happened between 2008 and 2010.

At some point around 2013, already way behind schedule, the Cubans were taken off the project for reasons that were never really explained, and PDVSA hired Venezuelan consulting companies to finish the engineering.

Building work on the CADCAs all but stopped last year when oil prices fell. Odebrecht abandoned the project and workers were sent home; leaving behind all the equipment I could see rusting away all around me.

Even if they had been properly stored, they would have suffered corrosion damage, plus the risk of theft. Even in the best of cases they would need major maintenance at this point. Instead, much of it had turned to scrap.

I know that reading Odebretch, Cuba and PDVSA in the same paragraph can’t help but draw suspicions. I’m not going to allege corruption because I have no specific evidence of any.

Even if the money wasn’t stolen, it’s enraging that work on a potentially useful project was scrapped, and that millions of dollars in equipment are rusting away quietly in storage yards at a moment of such deep economic crisis. It’s also kind of creepy that little of this have found its way to the press, and makes you wonder how many cases like this exist.

 

23 COMMENTS

  1. The sad thing to consider is that this waste of public resources could just as easily have ocurred in the past , before Chavez , because one thing that Venezuela has never had in abundance are organizations that can competently pursue and carry out public works and projects regardless of the ideology of the rulers .

    In the past Venezuela had as an exception an organization that could carry these projects thru which was the old Pdvsa but after its defenestration in 2002 its capacity for the organized rational pursuit of projects was destroyed and there are no other organizations within the public sector and perhaps only some very few outside it that can effectively do so.

    Of course the old model of governance with its prioritization of the short term political , its clientelism and cronyism , its love of hubristic visions , its corruption make the formation and upkeep of these kind of organizations almost an impossibility . What Venezuela currently needs most is a model that allows for the creation and maintenance of organizations that work , that actually are capable of achieving the results they are meant to achieve. Having a govt that respects human right and civi liberties under democratic guidance is not enough if its apparatus for the performance of public works and projects is disfunctional.!!

    Democracy is not enough, States have to be composed of organizations that are functional and effective.!!

  2. Is going for Bioethanol still a good idea?

    I remember on 2005 there was a craze for BioEthanol and everyone was building plants for this. As a consequence for the increased demand, the food prices for a lot of basic staples spiked hard. This made it politically expensive to argue for alternative fuels when people could no longer afford to eat.

    After that, the push for bioethanol faded and other forms of energy where sought of instead. I don’t think much has changed lately, specially since oil prices are lower now.

    Unless sugar prices are controlled only for human consumption. Then using all the sugar for fuel is a great idea.

    • The controversy was principally about the diversion of corn (maize) to ethanol. This raised the international price of corn, and was, in part, a sop to the senators of corn-growing states in the U.S.A. and also part of a drive to make the U.S.A. less dependent on foreign oil (since made irrelevant with the introduction of fracking). Use of sugar for ethanol continues to be economically sustainable in Brazil, and could well have been at least breakeven in Venezuela, if properly implemented.

  3. That was an excellent post. Wow. Well done. I wonder if Odebrecht will ever get paid for any of their projects in Venezuela, …ever.

  4. Where is the logic in an oil exporting, sugar importing country, with numerous refineries, to be using capital to build a bioethanol plant with sugar cane as feedstock? never mind..

    • We’re in Second-Best territory here.

      First best would CLEARLY be to stop the idiotic gasoline subsidy.

      But if you take as a given that the government is married to that idiot policy, then freeing up gasoline that would otherwise be given away so it can be exported by replacing it with Ethanol makes good sense.

  5. I know that reading Odebretch, Cuba and PDVSA in the same paragraph can’t help but draw suspicions. I’m not going to allege corruption because I have no specific evidence of any.

    The sad part here is that Brazil has extensive experience and expertise in producing ethanol from sugar cane. From Wikipedia:

    Brazil is the world’s second largest producer of ethanol fuel, and until 2010, the world’s largest exporter. Together, Brazil and the United States lead the industrial production of ethanol fuel, accounting together for 87.8 percent of the world’s production in 2010,[1][2] and 87.1 percent in 2011.[3] In 2011 Brazil produced 21.1 billion liters (5.57 billion U.S. liquid gallons), representing 24.9 percent of the world’s total ethanol used as fuel.[3]…
    Brazil’s 37-year-old ethanol fuel program is based on the most efficient agricultural technology for sugarcane cultivation in the world,[12] uses modern equipment and cheap sugar cane as feedstock, the residual cane-waste (bagasse) is used to produce heat and power, which results in a very competitive price and also in a high energy balance (output energy/input energy), which varies from 8.3 for average conditions to 10.2 for best practice production.[6][13]

    Had the intent been to transfer sugar cane to ethanol expertise to Venezuela, Brazil certainly had that capability.

  6. The inmmediate message here is of course that this regime is a mess and that it deserves our condemnation which of course we happily heap on it , but beyond that there is something terribly dysfunctional about the way the Venezuelan state bodies are organized to function that goes way back and that if democracy is its ever to have a second chance must be remedied !! If we think that its simply a question of having great leaders inspired by great ideologies that makes a govt competent , we are missing the point , because even if we have the above two , creating organizations that work on a permanent basis involves much more !! but I dont see it appearing on the radar screen of the opposition as a problem to tackle.!!

    Its a very good piece and we can congratulate the author on writing it , but sometimes we have to go beyond the inmmediate impression that a piece affords us and try and figure out the big picture message that the piece sends us .!! Will there ever be a blog dedicated to this issue !! Hope so because no democracy can last which operates as disfunctionally as regularly been the case in the past !!

  7. Nice article !

    But this statement is not true: “Ethanol is basically just alcohol. It’s a biofuel that can be safely mixed with gasoline without having to modify existing engines.”

    Modern engines can tolerate up to 10% Ethanol Gasoline Blends, since Ethanol absorbs water and attacks some types of rubber.

    See:

    http://www.fuel-testers.com/ethanol_problems_damage.html

    According to this link, only vehicles made after 2001 can use E15 (15% Ethanol)::

    http://www.eia.gov/tools/faqs/faq.cfm?id=27&t=10

    “All gasoline vehicles can use E10. Currently only light-duty vehicles with a model year 2001 or greater can use E15. Only flex-fuel vehicles can use gasoline with an ethanol content greater than E15.”

Leave a Reply