Do Wall Street Journal:

“Sweet Home, Santiago: Cuba’s Ethanol Future

Fidel Castro’s decision to step down as Cuba’s ruler brings the country one step closer to a democratic transition. Could it also be one step closer to an economic transformation?

A sweet cash crop (Wikipedia)

Before Castro’s 1959 revolution, Cuba was the world’s biggest sugar producer; today, its battered sugar mills and neglected land produce about 10% of what they did. In the meantime, though, sugar has become a real cash crop: While regular sugar sells for around 11 cents a pound, ethanol made from sugarcane can fetch $2 a gallon.

The academics who try to make sense of Cuba’s economy—and divine its post-Castro future—have spent a lot of time wondering if Cuba could be a baby Brazil, which has become the world’s biggest producer of ethanol by pouring half its sugar crop into the fuel. The short answer, from the Association for the Study of the Cuban Economy’s Juan Tomas Sanchez:

The 1 billion gallons [of sugarcane-derived ethanol] that Brazil will export in 2007 could have been produced in [the Cuban province of] Camaguey.

Mr. Sanchez set out to determine how much ethanol Cuba could produce after an exhaustive study of Cuban land use. In a best-case scenario, where post-Castro Cuba opened the door to hefty foreign investments to modernize its sugar industry and without any barriers to the U.S. market, Cuba could produce 3.2 billion gallons of ethanol a year, Mr. Sanchez figures. (Other academics guess it would be closer to 2 billion gallons.)

But unlike Brazil, which has a thirsty domestic auto market to feed, Cuba’s relative lack of internal demand would free most of that ethanol for export. Mr. Sanchez figures as much as 3 billion gallons, worth around $7 billion at today’s prices. Hard currency aside, sugarcane ethanol appears to have two other selling points over other varieties. It seems to produce lower carbon-dioxide emissions than biofuel made from corn, soy, or palm oil. And sugarcane biomass, long used to fire distilleries in Cuba, could produce an additional 4 gigawatts of power (think four nuclear plants) for the electricity-starved nation.“