Mexico to issue tender for ethanol production

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Aug. 28 -- Mexico’s state-owned Petroleos Mexicanos (Pemex) will invite tenders next month for a contract to produce 176 million l./year of ethanol, according to a senior government official.

Energy Secretary Georgina Kessel said the bidding round, which will be concluded in December, aims to promote ethanol as a transportation fuel as part of a wider plan by the government to reduce pollution and diversify the country's energy mix.

Kessel told delegates at a conference that the plan will help reduce the amount of pollutants released into the atmosphere while also guaranteeing the development of Mexico's food industry.

She said the project will first be carried out in the western state of Jalisco, with 65,000 ha of sugarcane to be used as feedstock in producing up to 176 million l./year of an ethanol-gasoline blend.

The project is being launched after a successful test-run last month in Monterrey, where 151,600 l. of sugarcane-based ethanol were added to gasoline at retail outlets, with 2.53 million l. of the blend sold to consumers.

According to Finance Secretary Agustin Carstens, the production of biofuels will not endanger ecosystems or food security in Mexico contrary to warnings issued by several nongovernmental organizations concerned over the use of corn—a dietary staple of the Latin American country—as feedstock.

"In Mexico, there's an agricultural zone potentially suited for the production of raw materials for ethanol production, especially sugarcane, sweet sorghum, and beets, with no risk to the country's food security or to jungles, forests, and the remaining natural ecosystems," Carstens said.

The finance secretary said other bid rounds will be announced before yearend for Monterrey and the Mexico City metropolitan area. Carstens said 126 million l./year of ethanol will be required to support those initiatives.

In 2008, Mexico enacted a law to promote and develop the use of biofuels, which also calls for production of ethanol from different sources, including algae, sugarcane, and corn.

In addition, the law also allows for the production of ethanol from waste leftover from sawmills, as well as agroindustrial and urban waste and traditional agriculture and forest residues.

Mexico hopes that biofuel production will enable Pemex to reduce its imports of gasoline which, in May, accounted for 39.2% of sales in the country during the second quarter compared to 40.5% year-on-year. In terms of volume, gasoline sales totaled 784,364 b/d compared to 798,249 b/d year-on-year.

Contact Eric Watkins at hippalus@yahoo.com.

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