If ethanol were a crime, Washington would definitely be charged with aiding and abetting. Because let’s face it: there’s absolutely no doubt that those folks on the Hill are responsible for the ethanol movement.

And when you take into account all the agricultural subsidies and renewable fuel standards, the very thought of ethanol being written off as a temporary fad is ludicrous.

Just take a look at how much ethanol and other biofuels are going to come online thanks to the latest increase in the current renewable fuel standard:

These new standards, which will require the introduction of 35 billion gallons of biofuel by 2035, were actually unveiled just last week by the Environmental Protection Agency--and some congressmen are already trying to double them.

And it’s no coincidence that the Big Three automakers are ramping up production on their flex-fuel vehicles these days, either.

I can assure you, they wouldn’t lift a finger to change a damn thing unless they knew there was something in it for them. And even then, it can be difficult. Just look at how they completely missed the boat on hybrids. It’s a wonder some of these guys even have the mental capacity to tie their shoes in the morning.

Sarcasm aside, the fact is there are currently 114 existing ethanol plants in the US, with 85 scheduled to come online this year. And here’s the best part: US capacity is already hovering around 13 billion gallons per year. That’s nearly 75% more than the 2012 standards require.

It doesn’t take a genius to see the writing on the wall here, folks!

Ethanol Elsewhere

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.

Once this happens, they’ll be able to self-supply their feedstock, thereby protecting the company from outside market conditions and commodity price fluctuations.

And in China, Tiger Ethanol (TGEI.OB) came onto the scene back in December, when it announced its plans to set up its first production facility in the western province of Xinjiang.

A few months later, the company locked in its feedstock supplies from Yili Agricultural Division Supply and Sales Company . . . a government-owned Chinese business. And just last week, the company announced that its plant construction kicked off a month earlier than planned.

Profit can be one heck of a motivator!

Now I’m not suggesting you go out and load up on shares of Tiger Ethanol or Pure Biofuels. In fact, at this stage of the game, these are two very speculative plays.

My intention here is simply to show you that ethanol momentum is not only stronger than ever, but it’s got global momentum that will continue to provide opportunity after opportunity for Green Chip investors.

And understand, we’re still only in phase one. Just wait until cellulosic production comes online. That’s when things will really heat up!

Rest assured . . . we’ll keep you posted every step of the way.

Nick Hodge