Where the Cars Run on Sugar Cane

At 34,000 fuel stations in Brazil, drivers have the option of never touching a drop of oil.

Here, nearly half the cars on the road are called flex cars, and nearly all the new ones are sold with a special device that allows a regular engine to run on pure ethanol.

Flex cars use power that is not from shrinking deposits of underground oil, but grown on the Earth's surface from renewable sugar cane.

"Under Brazilian conditions today, ethanol competes with oil whenever oil is at or above $32 a barrel," said Plinio Nastari, an agricultural scientist who is one of Brazil's leading experts on energy independence.

Oil hasn't been at such a low level for awhile, and, as Nastari notes, it "probably will not come back to those levels."

Raw sugar cane is the key to Brazilian fuel efficiency. To get eight gallons of ethanol from sugar cane it takes a gallon of fossil fuel. That makes it both environmentally friendly and cost efficient.

In fact today, it costs a mere 90 cents per gallon to make ethanol from sugar cane. It would be a little more expensive, $1.25 per gallon, to make ethanol from U.S. corn -- compared to the gasoline wholesale price of $2.02.

With the average price of gasoline in the United States at $2.90 a gallon, according to the U.S. Department of Energy, the search is on in America for an alternative -- something quick, something environmentally friendly, and something that won't run out.

Nastari says that economic picture means America could be growing instead of drilling its fuel on a widespread basis very soon.

"This could happen very quickly," he said. "Within three to five years, ethanol could be a major source of fuel in the U.S."

Two things would have to happen for the United States to follow the Brazilian model.

First of all, Brazil's ubiquitous flex cars would have to be sold in the United States. American auto companies are already making vehicles in Brazil that can operate on pure ethanol, gasoline or any combination of the two. They cost no more than gasoline-engine cars, pollute less and are just as powerful.

"We have a model that works," said Rogelio Golfarb, president of the Brazilian Association of Vehicle Manufacturers. "It's possible. It can be adapted to different situations, different economies."

General Motors in the USA is already building E-85 cars and trucks that operate on 85 percent ethanol, but only 600 fuel stations around the country carry that blend.

That brings up the second issue. There would have to be a national will that convinces or pressures oil companies to distribute ethanol widely.

In Brazil the gas stations were forced to install ethanol pumps, and Nastari says big oil is getting the message even in America.

"We see a changing perspective from companies positioning themselves not as oil companies, but as energy companies," Nastari said. "They realize that oil is ending and they should diversify their product."

ABC News' Jim Avila and Beth Tribolet reported this story for "World News Tonight."