WEBVTT - From Drilled: The Carbon Gold Rush 0:00:15.410 --> 0:00:15.890 Pushkin. 0:00:19.050 --> 0:00:22.970 Hello, Tim Harford here briefly stepping aside from my usual 0:00:23.050 --> 0:00:26.370 role of documenting failures of the past to point you 0:00:26.410 --> 0:00:31.410 towards someone who's uncovering spectacular failures as they happen. Her 0:00:31.490 --> 0:00:35.210 name is Amy Westervelt, and her show is called Drilled. 0:00:35.650 --> 0:00:39.890 It's an investigative podcast about climate change, not the science 0:00:39.930 --> 0:00:43.410 of it, but the politics and the money and the spin. 0:00:44.410 --> 0:00:49.530 This season, Carbon Cowboys follows a new type of clean 0:00:49.810 --> 0:00:53.530 energy project in Brazil, one that promises to turn the 0:00:53.570 --> 0:00:59.730 country into quote the Saudi Arabia of sustainable aviation fuels. 0:01:00.410 --> 0:01:03.570 What could possibly go wrong? It's the kind of story 0:01:03.690 --> 0:01:08.610 caution me tales. Listeners will recognize powerful people, the compelling vision, 0:01:09.210 --> 0:01:14.130 some uncomfortable questions looking just beneath the surface. Enjoy the episode, 0:01:14.170 --> 0:01:17.290 and if you want to hear more, find Drilled wherever 0:01:17.330 --> 0:01:21.170 you get your podcasts, and hear episodes early and ad 0:01:21.210 --> 0:01:25.650 free with Pushkin Plus. Available on Drilled's Apple podcast show 0:01:25.730 --> 0:01:35.650 page or pushkin dot fm, slash plus. 0:01:36.970 --> 0:01:40.490 In early September twenty twenty five, a handful of Brazilian 0:01:40.610 --> 0:01:45.290 government officials headed to North Dakota on a mission. It 0:01:45.410 --> 0:01:47.770 was a technical mission. They were there to see a 0:01:47.810 --> 0:01:52.930 shiny new green technology in action. The idea behind this 0:01:53.010 --> 0:01:57.250 new technology was simple. When you turn corn into ethanol, 0:01:57.490 --> 0:02:01.330 it generates carbon dioxide, and that's a problem if you're 0:02:01.370 --> 0:02:05.010 trying to be a green fuel. But now people from 0:02:05.050 --> 0:02:09.690 Iowa to North Dakota were capturing that carbon dioxide, storing 0:02:09.730 --> 0:02:13.570 it and selling it. Never mind that they were selling 0:02:13.650 --> 0:02:16.690 it to people who would inject it underground to get 0:02:16.730 --> 0:02:20.610 more oil out. Some of it would surely still stay underground. 0:02:20.730 --> 0:02:23.730 And if you tilted your head and squinted a bit, 0:02:24.050 --> 0:02:29.490 that made it a climate solution. The American company selling 0:02:29.490 --> 0:02:32.930 the Brazilians on this idea had a lot writing on 0:02:33.050 --> 0:02:37.570 these officials, believing that carbon capture connected to ethanol was 0:02:37.610 --> 0:02:41.370 a great green success story, win win for industry in 0:02:41.410 --> 0:02:44.890 the environment, an American dream they could take home to Brazil. 0:02:45.930 --> 0:02:49.490 But had the visiting bureaucrats scanned the local newspapers, they 0:02:49.570 --> 0:02:51.690 might have found a different story. 0:02:52.250 --> 0:02:55.490 If you live in Iowa, your land, your water, and your. 0:02:55.410 --> 0:02:57.730 Voice could all be at risk thanks to a man 0:02:57.850 --> 0:02:59.650 named Bruce Rastetter. 0:03:00.210 --> 0:03:05.730 You know, essentially paying him to capture CO two at 0:03:05.770 --> 0:03:10.370 ethanol plants and then shipping it across private land and 0:03:10.450 --> 0:03:15.410 public land and then disposing of it somewhere many states away. 0:03:16.410 --> 0:03:19.810 On September second, the Brazilian contingent met with an Iowa 0:03:19.850 --> 0:03:24.290 company called Summit Carbon Solutions. Summit has been trying for 0:03:24.450 --> 0:03:27.730 years to build a carbon capture pipeline to connect dozens 0:03:27.770 --> 0:03:31.970 of ethanol plands from Iowa to North Dakota. It's called 0:03:32.250 --> 0:03:41.170 the Midwest Carbon Express Project. Harold Ham, who controls many 0:03:41.250 --> 0:03:44.730 of North Dakota's oil fields and is an energy advisor 0:03:44.770 --> 0:03:48.570 to President Trump, is a major investor in the company. 0:03:48.810 --> 0:03:52.410 Bruce Rastetter is the company's co founder. He's also a 0:03:52.410 --> 0:03:57.410 founder and executive chairman of its parent company, Summit Agricultural Group. 0:03:58.130 --> 0:04:01.410 For other cheerleading of the project to visitors, the Summit 0:04:01.490 --> 0:04:05.850 pipeline is years behind schedule and facing multiple political and 0:04:05.970 --> 0:04:11.250 legal roadblocks. In fact, it's man to do almost no politician, 0:04:11.370 --> 0:04:13.610 issue or campaign has been able to do in the 0:04:13.730 --> 0:04:18.090 US for years. United far left and far right populous 0:04:18.730 --> 0:04:24.890 people from both sides hate this pipeline. For Rest Utter, 0:04:24.970 --> 0:04:28.570 it's not the first time he's faced opposition, especially in 0:04:28.610 --> 0:04:30.130 his home state of Iowa. 0:04:31.090 --> 0:04:35.730 Anyone who remotely follows politics or agriculture, you say raft 0:04:35.730 --> 0:04:37.170 Stetter you're going to get a response. 0:04:37.690 --> 0:04:42.090 Jess Mazur is the conservation coordinator for the Sierra Club Iowa. 0:04:42.210 --> 0:04:44.690 For Jess, the carbon pipeline was not the first time 0:04:44.810 --> 0:04:46.690 she'd dealt with Bruce Rastutter. 0:04:47.210 --> 0:04:48.970 They know who it is, and they go, oh, you 0:04:49.010 --> 0:04:50.970 know that guy did this, So that guy put a 0:04:50.970 --> 0:04:53.890 factory farm near my house, or he's the one that 0:04:54.530 --> 0:04:56.170 you know, got Iowa State in trouble. So I think 0:04:56.210 --> 0:05:00.730 everyone's got an opinion of him, and he's really really 0:05:00.770 --> 0:05:04.210 good at being able to avoid ever having to be 0:05:04.490 --> 0:05:07.490 in the public. He doesn't get interviewed, he doesn't take 0:05:07.530 --> 0:05:08.610 media requests. 0:05:10.050 --> 0:05:10.850 Kind of secret if. 0:05:10.730 --> 0:05:13.890 He lives out in the middle of nowhere in Hardin County, Iowa. 0:05:14.770 --> 0:05:18.050 Rastutter got his start as a big hog farmer. From there. 0:05:18.170 --> 0:05:20.610 It wasn't a big leap to growing corn, and then, 0:05:20.810 --> 0:05:23.130 like a lot of corn growers, that led quickly to 0:05:23.450 --> 0:05:31.570 getting into the corn ethanol business. As a longtime climate reporter, 0:05:31.930 --> 0:05:36.170 I keep waiting for people to stop calling corn ethanol green. 0:05:36.970 --> 0:05:40.530 Its carton footprint is similar to regular gas. It requires 0:05:40.530 --> 0:05:45.290 around thirty times as much land as solar, plus lots 0:05:45.330 --> 0:05:50.650 of water and chemical pesticides and fertilizers, but industrial agriculture 0:05:50.770 --> 0:05:54.050 gets loads of subsidies from it, so they're always finding 0:05:54.050 --> 0:05:56.730 a way to keep it alive. And in twenty twenty two, 0:05:57.050 --> 0:06:00.370 Congress handed it its latest lifeline. 0:06:00.890 --> 0:06:05.370 The Inflation Reduction Act contains some really incredible things for 0:06:05.450 --> 0:06:08.770 our shareholders. It contains sustainable aviation fuel. 0:06:08.770 --> 0:06:09.850 We think that's an. 0:06:09.690 --> 0:06:12.450 Incredible part of the carbonizing the planet. 0:06:13.010 --> 0:06:17.130 The Infletion Reduction Act, Biden's big climate policy, created a 0:06:17.170 --> 0:06:21.250 whole new revenue stream for the corn ethmol guys. Now 0:06:21.370 --> 0:06:24.290 they could sell to airlines, but only if they embraced 0:06:24.370 --> 0:06:29.650 carbon capture. Bruce Restetter to the rescue, so. 0:06:29.690 --> 0:06:33.770 I think without continuing to attain new markets, the ethanol 0:06:33.850 --> 0:06:39.450 industries in jeopardy. So that's what lowering carbon scores. This 0:06:39.610 --> 0:06:43.730 project on the pipeline is about, with thirty four ethanol 0:06:43.770 --> 0:06:46.770 plants across the Upper Midwest, but in particular. 0:06:46.330 --> 0:06:50.650 Iowa Summit Carbon Solutions still talks about the project today 0:06:50.690 --> 0:06:53.050 as a way to open up new markets for Iowa 0:06:53.170 --> 0:06:56.810 corn farmers. So the company was caught off guard when 0:06:56.810 --> 0:07:01.570 people across multiple states began organizing against the Midwest Carbon 0:07:01.610 --> 0:07:06.170 Express and it quickly became a big problem because Restetter 0:07:06.530 --> 0:07:10.930 was not just the ethanol kingpin of his company, was 0:07:10.970 --> 0:07:15.010 also the majority owner of a Brazilian ag company FS 0:07:15.050 --> 0:07:19.370 Fueling Sustainability, and he'd helped to make corn ethanol a 0:07:19.410 --> 0:07:22.650 thing in Brazil too. Now some it is trying to 0:07:22.690 --> 0:07:29.890 make carbon capture happen there too. Welcome to Drilled Season fifteen, 0:07:30.330 --> 0:07:34.290 Carbon Cowboys. I'm Amy Westervelt and this season we've partnered 0:07:34.290 --> 0:07:37.850 with the amazing reporters of the Intercept Brazil to learn 0:07:37.890 --> 0:07:41.090 more about what Rasstutter is doing down there. 0:07:41.410 --> 0:07:45.010 I'm Filippe Sabrina with the Interceptor Brazil. I will be 0:07:45.050 --> 0:07:48.010 hosting the Portuguese version of the season over on the 0:07:48.010 --> 0:07:51.650 Intercept to Brazil Feed. This is a story about how 0:07:51.690 --> 0:07:55.210 the ethanol kingpin of Iowa became the king of corn 0:07:55.250 --> 0:07:56.130 in Brazil and. 0:07:56.130 --> 0:07:58.490 How a bunch of ideas that are great for the 0:07:58.530 --> 0:08:02.410 oil and EG industries got rebranded as climate solutions and 0:08:02.450 --> 0:08:08.930 created a carbon gold rush. 0:08:09.530 --> 0:08:12.930 Think Magannin as a gun Chi, think poru you can siders. 0:08:13.450 --> 0:08:16.050 A few months ago, Philippe started telling me about this 0:08:16.210 --> 0:08:20.650 giant pig statue that greets people near Bruce Rastutter's home 0:08:20.690 --> 0:08:24.570 base in Brazil. Because yes, his partners in Brazil also 0:08:24.650 --> 0:08:28.410 started out as pig farmers. These guys are all still 0:08:28.450 --> 0:08:30.850 on the pig business, and boy do they love pigs. 0:08:31.370 --> 0:08:34.450 When Philippe sent me a picture of this pig statue, 0:08:34.650 --> 0:08:37.530 I was kind of shook. If you're imagining some sort 0:08:37.530 --> 0:08:42.490 of tasteful bronze statue, think again. This is a massive, 0:08:42.890 --> 0:08:46.290 orky pig looking thing wearing laterhosen and a bright green 0:08:46.330 --> 0:08:48.450 hat holding a corn cob. 0:08:48.890 --> 0:08:53.210 And it even has a name Lukeinya or Little Lucas 0:08:53.770 --> 0:08:57.370 because the town is called Lucas do hill Viji. It 0:08:57.490 --> 0:09:00.290 tells you actually a lot about this place. It was 0:09:00.330 --> 0:09:03.170 proposed by one of the largest landowners in the area, 0:09:03.650 --> 0:09:07.530 big agriculture business guy. He comes from a German family, 0:09:07.610 --> 0:09:11.410 which is why the pig is wearing German outfit. Around 0:09:11.410 --> 0:09:14.810 fifty years ago, the Brazilian agriculture industry came to this 0:09:14.930 --> 0:09:18.210 place looking for a cheap and easy land grab. Today, 0:09:18.450 --> 0:09:21.370 the American agriculture industry is doing the same thing. 0:09:23.010 --> 0:09:29.850 Vusista in Lucas dou virgi asiddajijiu portunidajis aki ajira soujin 0:09:29.890 --> 0:09:32.810 pri guzia quali dan did you leave the same kotre. 0:09:33.250 --> 0:09:36.050 This audio you're listening to with the epic background music 0:09:36.250 --> 0:09:39.010 is from a promotional video by the Lucas Dorio Verge 0:09:39.090 --> 0:09:43.090 city government highlighting the wonders of the city. The video 0:09:43.130 --> 0:09:47.810 mixes imagism, macause forests and the sunset and large cotton, 0:09:47.890 --> 0:09:51.730 soybean and cornfields. The city government wants you to know 0:09:51.810 --> 0:09:55.730 that Lucas is the city of opportunities. It has more 0:09:55.770 --> 0:09:59.090 than ninety five thousand inhabitants and produces more than two 0:09:59.370 --> 0:10:02.970 million tons of green per year. The narrator of the 0:10:03.050 --> 0:10:06.050 video says, we are one of the fastest growing cities 0:10:06.090 --> 0:10:08.890 in Brazil, and then the screen fills with a mix 0:10:08.930 --> 0:10:13.650 of smiling children, crops and green pouring out of machines. 0:10:14.290 --> 0:10:17.570 Lucas to Rio Verge is all money, growth and seas 0:10:17.610 --> 0:10:20.770 of corn and soybeans as far as the eye can see. 0:10:21.250 --> 0:10:24.050 The first time I visited, it shocked me to see 0:10:24.170 --> 0:10:27.930 massive crops right next to people's homes. But the more 0:10:28.050 --> 0:10:31.930 I learned about Lucas, the more it made sense. The 0:10:31.970 --> 0:10:35.850 town is a fiction designed and built by the government 0:10:35.970 --> 0:10:41.410 to impose development on this region. Lucas was entirely created 0:10:41.450 --> 0:10:46.010 to serve agriculture and its owners. The wide avenues are 0:10:46.050 --> 0:10:51.570 lined with silos, agricultural machinery, stores, supply stores, credit banks, 0:10:51.610 --> 0:10:56.730 and real estate agencies. Trucks over twenty meters long, loaded 0:10:56.770 --> 0:11:00.610 with soybeans or corn have plenty of space to drive 0:11:00.650 --> 0:11:04.530 around or park on the curb. Walking in Lucas, on 0:11:04.570 --> 0:11:07.730 the other hand, is a challenge because of the distances 0:11:07.770 --> 0:11:11.170 between the long avenues, the heat, and the lack of 0:11:11.250 --> 0:11:16.330 trees to provide shade. The city is obsessed with imperial 0:11:16.410 --> 0:11:20.530 palm trees. There are hundreds of them in the town 0:11:20.610 --> 0:11:24.810 center and on the sides of the roads. With nothing 0:11:25.050 --> 0:11:29.250 but monoculture crops and important palm trees, there is no 0:11:29.410 --> 0:11:34.210 vegetation in the area to insulate it from extreme temperature changes. 0:11:34.810 --> 0:11:39.850 Lucas can go from freezing cold to unbelievably hot from 0:11:40.250 --> 0:11:42.890 one moment to the next. It was weird for me, 0:11:43.290 --> 0:11:46.330 but the people I spoke with here didn't seem to mind. 0:11:47.010 --> 0:11:51.130 The image of abundant harvests has drawn people from all 0:11:51.170 --> 0:11:54.970 over the country to Lucas, all right, So. 0:11:56.690 --> 0:11:59.370 Yeah, yeah, I think My husband was unemployed for two years. 0:11:59.770 --> 0:12:02.530 Then we saw reports about the city, which is a 0:12:02.610 --> 0:12:05.490 very good place to leave to raise children, even in 0:12:05.570 --> 0:12:08.810 terms of violence, so we packed all backs. 0:12:09.970 --> 0:12:14.810 Isabella is from minaster Ice, a Brazilian state southeast of Lucas, 0:12:15.050 --> 0:12:17.690 but since twenty twenty one she's been living here with 0:12:17.770 --> 0:12:21.290 her husband and children. She sells Asai e bowls in 0:12:21.330 --> 0:12:24.210 front of the parking lot of a multi national grain company. 0:12:24.770 --> 0:12:28.370 Asai is a fruit typical of the Amazon. Isabella buys 0:12:28.370 --> 0:12:31.250 it from suppliers and sells it to truck drivers who 0:12:31.330 --> 0:12:33.090 load and unload grain. 0:12:33.250 --> 0:12:33.450 Here. 0:12:34.250 --> 0:12:37.850 She passes small bowls of asai cream through the fence 0:12:37.970 --> 0:12:42.610 and the truckers pass back cash. Isabella said Lucas is great, 0:12:42.970 --> 0:12:44.930 not least because when she needs to take her kids 0:12:44.930 --> 0:12:47.410 to a public hospital, she never waits more than an 0:12:47.450 --> 0:12:48.530 hour to be seen. 0:12:51.170 --> 0:12:54.130 Me in the city, I don't think anyone can complain 0:12:54.170 --> 0:12:55.050 about health care. 0:12:55.490 --> 0:12:58.610 She says that Lucas, the rio Verge hospital saw Lucas 0:12:58.650 --> 0:13:02.890 in particular, is especially nice. It's run today by a 0:13:02.930 --> 0:13:11.250 partnership between the city and agribusiness entrepreneurs. 0:13:12.410 --> 0:13:15.170 Now they've opened a really nice word that to the 0:13:15.290 --> 0:13:17.250 ome hospital has been renovated. 0:13:20.650 --> 0:13:27.930 Apart, I supposed Lucas Pontaka at Central Materni for Chu, 0:13:28.250 --> 0:13:32.970 who is passed by properson Resistencia Judus. 0:13:33.650 --> 0:13:36.490 In fact, the new maternity ward at the saw Lucas 0:13:36.530 --> 0:13:39.890 Hospital has a promotional video too, and a few seconds 0:13:39.890 --> 0:13:44.690 into it, listeners might recognize a not so Brazilian sounding name. 0:13:46.050 --> 0:13:48.810 North American Bruce Hast. 0:13:50.050 --> 0:13:55.530 Bruce Rasttter, the ethanol kingpin of Iowa. He wields a 0:13:55.650 --> 0:13:59.090 lot of power there, but outside the state, he's not 0:13:59.210 --> 0:14:03.170 exactly a household name. Now, suddenly a new wing in 0:14:03.250 --> 0:14:06.970 the hospital in this Brazilian farm town was being named 0:14:06.970 --> 0:14:09.090 after this guy. How did that happen? 0:14:09.290 --> 0:14:13.650 In the hospital canceled my tour just before I arrived, 0:14:14.090 --> 0:14:17.490 so our producer Marca Hever does and I just showed 0:14:17.570 --> 0:14:20.330 up to see what we could see. We talked to 0:14:20.450 --> 0:14:33.770 a hospital worker in the hallway. 0:14:33.810 --> 0:14:36.170 It's a little hard to hear there because Philippe and 0:14:36.250 --> 0:14:38.810 Marcia were trying to tape with their phone, and of 0:14:38.810 --> 0:14:41.730 course she's speaking in Portuguese too, But when they asked 0:14:41.730 --> 0:14:44.090 her about the name of the ward, the Bruce rast 0:14:44.130 --> 0:14:46.610 at her wing, she said it was named after Bruce, 0:14:46.730 --> 0:14:50.090 a doctor from Ohio. We're still not sure where she 0:14:50.170 --> 0:14:55.410 got that idea, but funding big public projects, especially around 0:14:55.450 --> 0:14:59.850 hospitals and healthcare, is really common in Brazil. You just 0:14:59.930 --> 0:15:03.410 heard how when telling Philippe about what she likes about Lucas, 0:15:03.530 --> 0:15:08.210 Isabella mentioned healthcare. People think of hospitals as an example 0:15:08.290 --> 0:15:11.410 of how nice a city is or how well it's working. 0:15:11.730 --> 0:15:14.530 So if Lucas has a good hospital, no one can 0:15:14.570 --> 0:15:17.610 say that the politicians or the businessmen running things here 0:15:17.730 --> 0:15:21.690 are bad. That goes double for anything that's focused on 0:15:21.770 --> 0:15:25.290 women and children. So a maternity ward checks a lot 0:15:25.330 --> 0:15:30.290 of boxes. And then we found out that the hospital 0:15:30.450 --> 0:15:33.410 is run by a foundation led by one of Rasstutter's 0:15:33.410 --> 0:15:38.010 Brazilian business partners, Marino Franz. Marino's brother Paulo was the 0:15:38.050 --> 0:15:40.970 one that proposed that giant pig statue that looks out 0:15:41.010 --> 0:15:44.650 over Lucas. And to understand how Rastutter, the American farmer, 0:15:44.970 --> 0:15:48.770 ended up with a Brazilian rural maternity ward named after him, 0:15:48.970 --> 0:15:51.450 we had to figure out how the Franz brothers fit 0:15:51.450 --> 0:15:54.290 into it, and what brought Bruce to Brazil in the 0:15:54.330 --> 0:16:10.930 first place. That's gonna yet after the break. Lucas de 0:16:11.050 --> 0:16:13.730 Rio Verde is in the Brazilian state of Mato Grosso, 0:16:13.930 --> 0:16:17.770 a state that is almost exactly half agriculture and half 0:16:17.890 --> 0:16:23.530 Amazon rainforest, it used to be even more Amazon. For decades, 0:16:23.570 --> 0:16:26.650 the state was considered the frontier in Brazil. The forests 0:16:26.650 --> 0:16:29.330 were preserved and it was home to even more indigenous 0:16:29.330 --> 0:16:32.370 people than it is today. But in the nineteen sixties 0:16:32.370 --> 0:16:36.210 and nineteen seventies, Brazil's military government deployed a new strategy 0:16:36.690 --> 0:16:40.490 was called the National Integration Plan. The idea was to 0:16:40.570 --> 0:16:44.450 eliminate indigenous communities that were seen as anti development and 0:16:44.690 --> 0:16:48.210 integrate the north and midwest of Brazil into the national 0:16:48.250 --> 0:16:54.330 economy level. Jega seldom sada Arrigitomba is grab you right, 0:16:54.410 --> 0:16:58.490 Staudia plenty s antitas people on that level of community. 0:16:58.890 --> 0:17:02.650 This propaganda film from the seventies celebrates the quote revolution 0:17:02.930 --> 0:17:07.610 reaching the jungle, toppling trees in favor of roads. The 0:17:07.690 --> 0:17:11.370 goal was to develop the Amazon by building infrastructure in 0:17:11.410 --> 0:17:16.250 the wilderness, displacing indigenous residents, and encouraging people from outside 0:17:16.250 --> 0:17:20.210 the region to move there, to be pioneers and go 0:17:20.290 --> 0:17:24.330 to this frontier and tainment. The main farm towns in 0:17:24.370 --> 0:17:28.970 Monto Grosso today were deliberate colonization projects, many of them 0:17:28.970 --> 0:17:33.090 built and funded by the Brazilian government. The government offered 0:17:33.130 --> 0:17:36.930 people plots of land housing and sometimes even credit to 0:17:37.010 --> 0:17:40.450 move there. They even funded research to figure out how 0:17:40.490 --> 0:17:43.210 crops like soybeans and cotton could be grown in the 0:17:43.210 --> 0:17:46.810 tropical climate there. That's what brought the Franz brothers there 0:17:47.090 --> 0:17:50.770 decades ago. And according to Paolo, it's the Franz brothers 0:17:50.890 --> 0:17:58.130 who brought Bruce to the area. In follows telling it 0:17:58.210 --> 0:18:01.330 all happened because of an internship he did in Iowa 0:18:01.970 --> 0:18:04.770 and an important contact he made there. Here he is 0:18:04.810 --> 0:18:08.450 talking about it on a Brazilian podcast. 0:18:08.530 --> 0:18:15.090 Borjum end norm senor to Terry. 0:18:14.850 --> 0:18:19.650 Branstead Terry Brandstad, the governor of Iowa at the time 0:18:19.850 --> 0:18:24.290 and eventually US Ambassador to China during Trump's first presidency. 0:18:25.050 --> 0:18:27.730 Pallas says they all went to soccer games together a lot. 0:18:28.530 --> 0:18:32.450 Pallis it was Brandstad who introduced him to Bruce Rastetter. 0:18:33.170 --> 0:18:36.050 Bruce Keo, CEO of the Empires and Fundador. 0:18:37.130 --> 0:18:40.530 Bruce is the CEO of the company the founder. He 0:18:40.650 --> 0:18:43.210 has a huge passion for pigs and has been involved 0:18:43.210 --> 0:18:45.850 with pigs his whole life. He was a pig farmer 0:18:46.090 --> 0:18:48.850 until he started getting into ethanol, which is a very 0:18:48.890 --> 0:18:53.210 recent thing. I don't know whether just to clarify Americans 0:18:53.250 --> 0:18:56.690 produce more ethanol from corn than we do from sugarcane. 0:18:57.410 --> 0:19:01.250 There the philosophy, the culture is producing ethanol from corn. 0:19:01.930 --> 0:19:04.810 So as President I met with is Terry Branstad, who 0:19:04.850 --> 0:19:07.570 was the governor of Iowa. We met and he wanted 0:19:07.570 --> 0:19:09.050 to buy some land here in Brazil. 0:19:09.970 --> 0:19:12.730 Bruce doesn't mention any of this when he's asked about 0:19:12.770 --> 0:19:15.210 how he wound up in Brazil. Here's how we talked 0:19:15.210 --> 0:19:17.930 about it on a farming podcast a couple of years ago. 0:19:18.410 --> 0:19:22.330 So when we sold Hawkeye to Coke Industries. 0:19:22.010 --> 0:19:24.330 That was one of his ethanol companies. 0:19:24.410 --> 0:19:26.370 That freed me up for the first time to do 0:19:26.450 --> 0:19:30.130 other things outside of being responsible for a larger company, 0:19:30.890 --> 0:19:32.930 and started traveling to Brazil. 0:19:33.810 --> 0:19:34.450 This is how. 0:19:34.330 --> 0:19:37.410 Bruce talks about it in other interviews too. He was 0:19:37.450 --> 0:19:40.970 interested in Brazil because it's the main agricultural competitor to 0:19:41.050 --> 0:19:44.490 the US, or because other US companies had done well there, 0:19:45.130 --> 0:19:47.690 et cetera, et cetera. It was when we were trying 0:19:47.810 --> 0:19:52.690 to verify Bruce and Paolo's differing versions of this story 0:19:53.210 --> 0:19:56.450 that our brazil editor, Alisi Desusa, found a guy with 0:19:56.690 --> 0:19:58.090 yet another version. 0:20:00.850 --> 0:20:05.250 Is this prooss and all are you three? Acres. Are 0:20:05.250 --> 0:20:08.450 you looking at this from a nakedness standpoint or are 0:20:08.490 --> 0:20:11.450 you you're looking at it from a neutral standpoint. I 0:20:11.450 --> 0:20:15.250 don't mind being neutral. I can be critical of this too, Yeah, 0:20:15.410 --> 0:20:19.370 but i'm because clients of mine have invested in offers 0:20:19.370 --> 0:20:22.370 of a billion dollars now in marpro Grosso. I don't 0:20:22.410 --> 0:20:23.370 want to fuck this up. 0:20:24.010 --> 0:20:27.490 That's Corey Melby, an agriculture consultant in Brazil. 0:20:27.970 --> 0:20:32.290 I came from Northwest Minnesota, developing land. So of course 0:20:32.530 --> 0:20:35.650 when in the early two thousands, when Mapa Grosso and 0:20:35.730 --> 0:20:39.330 all of this Siebian expansion was taking place, I was 0:20:39.410 --> 0:20:41.690 going to be the lamb guy for a group from 0:20:42.090 --> 0:20:44.410 some of the first guys I went down with, you're 0:20:44.450 --> 0:20:46.770 going to be here, Corey, pick up the language, bick 0:20:46.850 --> 0:20:47.850 up the contacts. 0:20:48.050 --> 0:20:49.570 You could be the real estate guy. 0:20:49.690 --> 0:20:53.370 So that's where I started, was from that perspective. 0:20:54.850 --> 0:20:55.730 Full disclosure. 0:20:56.130 --> 0:20:58.850 We paid Corey Melby to be a fixer for us 0:20:58.970 --> 0:21:01.930 on the ground in Manto Grosso. The idea was that 0:21:01.970 --> 0:21:05.290 he would take us around and ideally arrange a meeting 0:21:05.370 --> 0:21:10.210 with the brothers Franz at their farmended up panning out, 0:21:10.490 --> 0:21:13.490 but he did talk to Philippi and I, and he 0:21:13.610 --> 0:21:17.850 told us a lot about how Bruce started out in Brazil. 0:21:18.690 --> 0:21:21.330 He also added me to his newsletter list, which is 0:21:21.370 --> 0:21:24.610 a wealth of acknowledge about Brazil. Although it comes out 0:21:24.690 --> 0:21:26.570 so many times a week, I still have about five 0:21:26.650 --> 0:21:29.250 hundred unread emails in a folder marked Corey. 0:21:30.330 --> 0:21:33.970 So I've been on every firement by Grosso. I wrote 0:21:33.730 --> 0:21:37.890 the Boom Times and the bus, and the Boom Times 0:21:37.890 --> 0:21:42.570 and the Bus again with all my friends. So you know, 0:21:42.690 --> 0:21:45.650 I have that twenty five year art of experience now 0:21:45.970 --> 0:21:48.490 of the good, bad and ugly of micro Grosso, and 0:21:48.810 --> 0:21:50.930 believe me, there's plenty of all of it. 0:21:51.930 --> 0:21:54.010 He knows a lot about Bruce and the Frownz brothers 0:21:54.050 --> 0:21:55.930 because he did for Bruce what he's done for the 0:21:55.930 --> 0:21:58.810 past twenty five years for other Americans looking to get 0:21:58.810 --> 0:22:02.170 into the agg business. In Monte Grosso. He toured them 0:22:02.170 --> 0:22:03.610 around looking for land. 0:22:04.410 --> 0:22:07.370 Back in twenty eleven, I was visiting before you but 0:22:08.130 --> 0:22:11.290 and he was a young, dynamic guy, and he would say, Cory, 0:22:11.370 --> 0:22:19.050 we'll we're looking to develop a corn oil mill processing 0:22:19.370 --> 0:22:21.650 and investors or a partner in that. 0:22:23.410 --> 0:22:23.930 Corn oil. 0:22:24.210 --> 0:22:27.770 So I was writing about this BS and my newsletters 0:22:27.770 --> 0:22:32.050 at the time and also visiting him Lucas Deomerday at 0:22:32.050 --> 0:22:35.970 the elevators at the time, doctor to Climber's. Oh, cor 0:22:37.130 --> 0:22:39.770 we got to get corn ethanol or we're going to 0:22:39.810 --> 0:22:41.890 purry ourselves. 0:22:43.650 --> 0:22:46.650 Because of his newsletter and his ties to various American 0:22:46.730 --> 0:22:49.530 agg folks, Corey has kind of become known as the 0:22:49.690 --> 0:22:52.370 guy to call if you're an American who wants to 0:22:52.410 --> 0:22:55.330 get a sense of Manto grosso. So when people started 0:22:55.370 --> 0:22:58.290 talking about corn ethanol there, it was only a matter 0:22:58.330 --> 0:23:02.770 of time before he got a call from you know who, Summit. 0:23:02.690 --> 0:23:05.570 From Iowa, which I'm sure you are very familiar with, 0:23:05.690 --> 0:23:07.810 Bruce rest letter and Eric then. 0:23:07.770 --> 0:23:08.450 The whole club. 0:23:08.610 --> 0:23:13.410 I get all from Bruce's email. Hey, we were like 0:23:13.490 --> 0:23:18.250 a tour of man Cross. Uh, we're going to be 0:23:18.330 --> 0:23:22.410 down there for another reason. Could could we do something? 0:23:22.570 --> 0:23:23.810 Call up cart with you. 0:23:24.970 --> 0:23:28.250 They didn't want to take one of Corey's prepackaged ad tours. 0:23:28.570 --> 0:23:33.650 Okay, so this is twenty eleven. We do a little 0:23:33.690 --> 0:23:36.290 quick power to here they go home. I figured out 0:23:36.490 --> 0:23:41.730 just another tour. Uh, we're looking at land. We love 0:23:41.810 --> 0:23:42.410 to get going on. 0:23:43.610 --> 0:23:46.570 Corey carried on thinking nothing of it, but six months 0:23:46.650 --> 0:23:48.770 or so later he got a call from some friends 0:23:48.810 --> 0:23:49.250 in Manto. 0:23:49.330 --> 0:23:51.290 Crussol my good friend. 0:23:51.490 --> 0:23:55.410 The friends is you know, they were Cory. We we 0:23:55.570 --> 0:23:58.490 want to get an earthenhol now went out here, but 0:23:58.610 --> 0:24:01.370 we needed help. We need American, we need capital. 0:24:02.930 --> 0:24:04.210 So I was telling. 0:24:04.050 --> 0:24:07.490 Bruce and the guys, you know, I've got friends. I'm 0:24:07.490 --> 0:24:09.610 thinking at guys. 0:24:10.290 --> 0:24:13.770 According to Corey, at the time, Bruce and the guys 0:24:13.890 --> 0:24:16.930 weren't quite ready to get into the ethanol business in Brazil. 0:24:17.050 --> 0:24:20.410 They were just looking for some farmland. Then they came 0:24:20.450 --> 0:24:23.850 back for another trip, and as Corey tells it, this 0:24:24.010 --> 0:24:26.570 is when they met the Franzis all all of. 0:24:26.570 --> 0:24:30.330 A sudden, we've got a farm for sale. 0:24:30.890 --> 0:24:33.810 Corey helped broker the deal between Bruce and the Franzas, 0:24:33.890 --> 0:24:35.650 and it kept them all talking. 0:24:36.050 --> 0:24:38.410 Three years on this down farm. 0:24:38.610 --> 0:24:41.970 But that farm for just then opened the door with 0:24:42.250 --> 0:24:46.690 dressed and capable Hey, let's let's build an ethano though 0:24:46.850 --> 0:24:48.370 and lucas together. 0:24:49.210 --> 0:24:51.690 The Franz brothers had hit the big time. They were 0:24:51.690 --> 0:24:55.570 getting into business with the ethanol kingpin of Iowa. It 0:24:55.690 --> 0:24:59.290 was a whole new level. Whereas Corey calls it, cycle three. 0:24:59.930 --> 0:25:05.890 Cycle one is deforestation in cattle. Cycle two is song 0:25:06.730 --> 0:25:07.530 cycle two. 0:25:07.410 --> 0:25:09.690 Point five is so corn. 0:25:09.970 --> 0:25:15.570 Basically the combination CYCLEEL three now gets to be what 0:25:15.730 --> 0:25:20.850 we would say industrial or added value different than Iowa. 0:25:22.130 --> 0:25:25.170 For the Franz Brothers, Bruce was a white whale at 0:25:25.210 --> 0:25:29.690 a time of booming Brazilian industrial agriculture. He happened to 0:25:29.690 --> 0:25:32.250 have some free time on his hands, and now this 0:25:32.450 --> 0:25:35.410 international king of corn had picked them. 0:25:35.970 --> 0:25:36.570