The sweet power of ethanol.

• Author: Smith, Geri
• Position: For Brazilian cars

IT'S THE EVENING RUSH HOUR in Sao Paulo, the world's fourth-largest city, and frustrated commuters roll down their car windows for a bit of air as they wait out yet another traffic jam. One motorist, thinking ahead to the refreshing caipirinha, or lime-and-cachaca cocktail, that will be waiting for him when he gets home, imagines that he can even smell the sweet aroma of the rum distilled from sugarcane.

But wait--that's not his imagination. He IS smelling sugarcane alcohol, and the aroma is not coming from any cocktail shaker. It's wafting up from the tailpice ofthe Ford Escort ahead of him. The Escort and half of the other cars on congested Avenida Consolacao get their high-octane kicks from pure ethyl alcohol, distilled from the same green cane stalks that yield sugar, molasses and cachaca.

While it certainly is more pleasant for gridlock victims and city dwellers to breathe the sweet fumes from sugarcane alcohol than the noxious exhaust produced by gasoline-burning cars, pollution reduction was not the reason behind Brazil's decision in 1975 to launch the world's first successful program to substitute imported oil with alcohol fuel.

The program, officials said at the time, was a question of national survival. Brazil imported 80 percent of its oil in 1973, when the fist Mideast oil crisis hit. Planners feared that future growth in South America's most industrialized nation would be jeopardized unless Brazil slashed its oil imports to save vital foreign exchange.

Creating a progral called PROALCOOL (Pro-alcohol), the government used generous subsidies to encourage private enterprise to plant millions of acres with sugarcane, build hundreds of alcohol distilleries, and design automobile engines that run on the alternative fuel.

Today, at least 4.5 million automobiles -- more than one-third of the national fleet -- run on pure ethyl alcohol, called ethanol. Another 7.5 million cars run on gasohol containing as much as 22 percent alcohol. Until recently, nine of every ten new cars sold were alcohol-run.

The government has poured $12 billion into the program, not including an estimated $1 billion more ach year in industry subsidies and tax incentives. But Brazil has saved more than $10 billion that would have been spent on oil imports, and that means a lot to a country that holds the world's largest foreign debt of $120 billion.

Brazil produces more than 3 billion gallons a year of fuel alcohol -- equivalent to 200,000 barrels a day. The labor-intensive industry provides employment for 700,000 people, from cane-cutters to...