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ETHANOL PROJECT IN MEXICO

This study analyzes the viability and profitability of ethanol production in Mexico using sugar cane and maize. The study was delivered to the Intersecretarial Committee and key government officials, who are now negotiating a meeting to discuss the project. A subcommittee has also been formed to develop a Bio-Energetics Law initiative to promote and regulate the production of biofuels in the country.

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ETHANOL PROJECT IN MEXICO

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  1. ETHANOL PROJECT IN MEXICO LIC. ISABEL GÓMEZ MACIAS SEPTEMBER 27, 2005

  2. FEASIBILITY STUDY FOR ETHANOL PRODUCTION IN MEXICO

  3. FEASIBILITY STUDY • We had the compromise with the Intersecretarial Committee of doing a feasibility study, with the purpose to have a document to endorse the viability and profitability of the ethanol production in the country. • Such study was done for the firm BBI International, which is an international consultancy firm leader in the market to determinate the viability of ethanol projects.

  4. FEASIBILITY STUDY • The study was delivered by BBI to Fundacion e-Mision on April 2005. Such study contains a detailed and meticulous analysis of the feasibility and profitability of the production of ethanol in Mexico out of sugar cane and maize. • With the purpose to fulfill the arranged in the last meeting of the Intersecretarial Committee, 7 copies of the Feasibility Study were delivered to Ing. Alberto Cardenas Jiménez who was the Secretary of Environment and Natural Resources on May 9, 2005.

  5. FEASIBILITY STUDY • Asking him to send a copy to the C. President of the Republic, Mr. Vicente Fox Quesada and to each one of the Holders of the Intersecretarial Committee, Energy Secretary, SAGARPA, and the Economics Secretary and furthermore to the PEMEX Director and to the President of the Agriculture and Stockbreeding Commission of the Union Congress. • Currently each of them have their respective copy and are negotiating a meeting with the Intersecretarial Committee for charting the project.

  6. SUBCOMISSION FOR THE DEVELOPMENT OF THE BIO-ENERGETICS LAW INITIATIVE

  7. SUBCOMISSION FOR THE DEVELOPMENTOF THE BIO-ENERGETICS LAW INITIATIVE • The past July 27 2005 the Subcomission for the development of the Initiative of Law of the Bio Energetics this was instituted by the Agriculture and Stockbreeding Commission of the Union Congress • At the meeting we had the presence of the following congressmen: • Dip. Cruz Lopez Aguilar, who installed the subcomission • Dip. Jose Ma. De la Vega Larraga (coordinator) • Dip. Lazaro Arias Martinez • Dip. Carlos Blackaller • Dip. Jose Irene Alvarez • Dip. Mejia Haro • Dip. Arturo Robles Aguilar • Dip. Diego Almero Andrade

  8. SUBCOMISSION FOR THE DEVELOPMENTOF THE BIO-ENERGETICS LAW INITIATIVE • Furthermore we had the presence of the representatives of the instances with the project such as: • Ing. Jose Ramon Ardavin Ituarte, Sub-secretary of Environmental Norming and Promotion • Ing. Nicolas Ramon Rodriguez Martinesz, Manager of the Engineering of Processes of PEMEX • Mr. Braulio …. From the Economics Secretary in representation of Lic. Sergio Garcia de Alba • The objective of the subcomission is to prepare the Promotion and Development of the Bio-Energetics Law.

  9. PROMOTION AND DEVELOPMENT OF THE BIO-ENERGETICS LAW

  10. PROMOTION AND DEVELOPMENT OFTHE BIO-ENERGETICS LAW • At August 2005, the Sub-commission of the Stockbreeding and Agriculture Commission responsible of the integration of the initiative, has a program of work to write down the law initiative, and has had work meetings with SEMARNAP, PEMEX, the Energy Institute of UNAM, the Institute of Legislative Investigations of the Senate of the Republic and civil organizations who have worked in the issue as e-Mision. The Subcomission of work estimates that the initiative will be ready to be presented on October 2005.

  11. PROMOTION AND DEVELOPMENT OFTHE BIO-ENERGETICS LAW • Among the aspects to consider in the development of the Law are: • Consider the bio-energetics as key elements for the country’s energetic self-efficiency and as dynamisming factors of the agricultural production and the productive use, both agricultural and industrial. • Contemplate that bio-energetics are apart from ethanol and biodiesel the fermentation as the biogas. • Besides, consider the use the ethanol fuel in the gasoline and the diesel fuel, as a helping factor in the control of pollution atmospheric in the areas considered as critics where the standards or air quality are not followed. • The quantity and the quality of this bio-combustible will be established by the Energy Secretary, the Environment and Natural Resources Secretary and the competent dependencies, according to the Metrology and Normalization and other applicable dispositions; • The date of operation of the disposition for the use of the environmental specification based gasoline in the principal cities of the country. • The obligation to fulfill the dispositions marked in the law initiative, without harm to the other obligations that have to be observed by who produce, import, store, transport, commercialize, distribute or consume gasoline or combustible diesel in the county. • Signaling that ethanol can be used as additive or as combustible

  12. INTEGRAL PROJECT OF THE PRODUCTION OF ETHANOL OUT OF SUGAR CANETAMAULIPAS STATE PILOT PLANT

  13. INTEGRAL PROJECT: TAMAULIPAS STATE • BASIC ESTRATEGY • Establishment of the irrigation demand, with pressurized irrigation methods. • Duplicate the cane yield by fertirrigation which consist to add the earth the nutrients that the plant take away • To make the most out of the additional production for the manufacturing of exporting ETHANOL, with co-generation of Energy. • TYPICAL PROJECT • Integral modernization of Irrigation in 17, 000 h. in the Sugar Cane Irrigation Districts • Additional production of a million ton. of sugar cane in the Construction Project of an Ethanol Module of 500,000 lt/day . • Annual production per module of 85 ,millions of liters of ETHANOL and 35 MW or electric energy

  14. INTEGRAL PROJECT: TAMAULIPAS STATE INVESTMENTS PER PROJECT INVESTMENTS Units # of PU Total Units Thousands $ millions $ ETHANOL Distillery U 1 715,000 715 Irrigation ha 17,000 35 595 Drop Irrigation ha 17,000 12 204 Total 1,514

  15. INTEGRAL PROJECT: TAMAULIPAS STATE FINANCING PER DISTRICT FINANCING SOURCE AMOUNT % millIons $ National Water Comission 208.25 13.8% 35% Infraestructura State Government 89.25 5.9% 15% Infraestructura ALCAMPO* 136.00 9.0% $8,000/ha in drop Investors 715.00 47.2% Distillery Direct Users 18.27 1.2% $ 1,075 / ha Credit Users 347.23 22.9% $20,425 / ha Total 1,514.00 100.0% *Mexican Program

  16. INTEGRAL PROJECT: TAMAULIPAS STATE • PRODUCER BENEFITS • The producer receives $200 / ton. Extra • 60 ton / ha extra means $ 12,000 / ha. • Discounting the additional cost of production the net extra benefit reached is of $ 7,500 / ha. • The credit for $20,425 / ha would have a repayment period of 3.5 years at a interest rate of 12.5 % • Production of 85 millions of liters of ETHANOL and 90,000 Mwh of energy generation. • INVESTERS BENEFITS • Financing of the Bank of Foreign Trade of Brazil (BNDES) • Purchase contract of ETHANOL for 10 yrs. • Invest profitability of 23% • Current Net Value at 7% of 720 Millions • Recovery Period of the Investing of 8 yrs. At a rate of 11% (including 2 yrs of execution)

  17. INTEGRAL PROJECT: TAMAULIPAS STATE • GOVERNMENT BENEFITS • An Average of 2,500 will be beneficiary, mainly in the social sector. • 33 millions of currency will be generated • It will create a source of employment • The offer of electric energy will be improved • The conditions for the internal consume of Ethanol will be prepared • A rational use of water and energy will be applied, profitable agriculture, competitive and sustainable. • It will be helping in the eradication of poverty • The irrigation efficiency will be improved in a 36% to 75% and the salinity problems will be sorted • An investment model of national impact will we established in 274,000 ha of sugar cane by irrigation with a potencial of production of 1.36 millions of m3 of ETHANOL and with surplus of energy of 560 MW, producing 1.4 millions of Mwh • It contributes to the improvement of the kidnapped environment 3.6 million ton of carbon

  18. INTEGRAL PROJECT: TAMAULIPAS STATE • ENVIRONMENT IMPACT OF THE MODEL • 2 ton of carbon / m3 of ETHANOL • 0.64 ton of carbon / Mwh of Electric Energy • a total of 227,600 ton of carbon are kidnapped • 4.5 US million dollars!

  19. INTEGRAL PROJECT: TAMAULIPAS STATE • Contribution to environment by carbon kidnapping

  20. INTEGRAL PROJECT: TAMAULIPAS STATE • ENVIRONMENTAL IMPACT OF THE MODEL OF 500,000 LT. / DIA • The VAN carbon flow, considering the maturation of the project and 15 yrs of analysis, represents 37.0 million US DL in front of the investment of 58.9 millions! • Conservative analysis as it contemplates the traditional technology of Brazil, working only the sugar cane crop • New technologies allow to work all year, which increase the financing indicator and the environmental impact.

  21. OTHER STATES OF THE MEXICAN REPUBLIC

  22. NUEVO LEÓN TAMAULIPAS SINALOA VERACRUZ NAYARIT JALISCO OTHER STATES OF THEMEXICAN REPUBLIC • We are also working in other states of the Mexican Republic to built Ethanol plants with the integral model that is being used in Tamaulipas State • We have sensitized the Governors of the following States, we are actually working in the project with some of them: • Eugenio Hernandez from Tamaulipas State • Jesus Aguilar from Sinaloa State • Ney Gonzalez from Nayarit State • Fidel Herrera from Veracruz State • Jose Gonzalez from Jalisco State

  23. Today We have the power to write, In the present, A new story; Is not the memory of past But the vision of what we want To achieve Is a narration of future Which depends on our wisdom To built a civilization Sustainable

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