Another article illustrating why I'm worried about the impact of ethanol.

[GliderGuider]

I don't buy the argument that the market will constrain this fuel to farm use, or indeed constrain it at all. Not with this outlook:

White House Behind the Biggest Bull Market of the Next 25 Years

35 billion gallons per year by 2035. That's 2.3 million barrels a day. I know it's just pie-in-the-sky plans, but the intention is clear. We Must Continue To Drive - at any cost.

And the U.S. isn’t the only one amplifying production. Countries all over the world are producing more ethanol than ever. Production in the EU alone was up 71% in 2006 to over 412 million gallons.

And that 412 million gallons still wasn’t enough to satisfy Europe’s thirst for ethanol.

So it’s no surprise those thrifty Europeans went across the Atlantic to lock in additional supplies from the land of sugarcane and painful waxing, the world’s largest producer of ethanol--Brazil.

Today, Brazil blends 25% of its gasoline with ethanol, and plans on quadrupling its foreign sales of the stuff over the next five years.

Currently, Brazil is in the process of building 42 Panamax-sized tankers (the largest able to fit through the Panama Canal) for its future deliveries, each of which will able to carry 20 million gallons of ethanol.

Now even though the main producer of ethanol in Brazil is a state-owned company--Petroleo Brasileiro SA--there are still plenty of investment opportunities in the expanding global ethanol market.

Take Peru, for instance.

Though historically not a magnet for alternative fuel investment, the country’s recently-elected president Alan Garcia’s non-interventionist economic policy and admiration for Brazilian biofuel could clear the way for a flood of new biofuel investment.

Certainly Pure Biofuels Corp. (PBOF.OB) is taking a stab at playing the biodiesel market over there. The company plans to begin site assembly later this month, with completion and startup in the fourth quarter of 2007.

The company also recently announced its plans to lease 60,000 hectares near the city of Pucallapa in central Peru to be used for the cultivation of palm oil, which will provide feedstock for its Callao Port biodiesel production facility near Lima.

Food? We don't need to grow no stinkin' food so long as we can drive to McD's.