1 00:00:17,242 --> 00:00:28,682 Speaker 1: Pushkin. Last summer, we went to the Brazilian state of 2 00:00:28,802 --> 00:00:32,162 Speaker 1: Manto Grosso to get a better feel for Bruce Rastetter's 3 00:00:32,282 --> 00:00:37,082 Speaker 1: Brazilian partners. One of the first things we wanted to understand, 4 00:00:37,202 --> 00:00:40,482 Speaker 1: because it's at the center of their US operations too, 5 00:00:41,362 --> 00:00:45,002 Speaker 1: is how they're handling land in Brazil. 6 00:00:47,282 --> 00:00:50,042 Speaker 2: So there were the friends brothers Marino Franz and Palo 7 00:00:50,082 --> 00:00:54,082 Speaker 2: France here as we can see, and Miguel Vaz Hibero. 8 00:00:55,242 --> 00:00:59,082 Speaker 1: Ricardo da Costa Carvallo is an indigenous rights activist with 9 00:00:59,162 --> 00:01:05,362 Speaker 1: the NGO Opera Sau Amazonia Nativa or UPAN. They recently 10 00:01:05,362 --> 00:01:08,562 Speaker 1: did a survey in Manto Grosso identifying those who are 11 00:01:08,642 --> 00:01:14,722 Speaker 1: illegally occupying indigenous lands. When we visited opan's offices, he 12 00:01:14,882 --> 00:01:17,642 Speaker 1: showed us a map. On the map, he pointed out 13 00:01:17,682 --> 00:01:22,242 Speaker 1: the names of the people who illegally own private properties 14 00:01:22,282 --> 00:01:27,201 Speaker 1: that overlap with the Batelau indigenous territory, including the ones 15 00:01:27,241 --> 00:01:31,281 Speaker 1: you heard there, Miguel vas Ribero and Marino Franz, Bruce 16 00:01:31,362 --> 00:01:38,521 Speaker 1: Rastutter's Brazilian business partners. Batalao belongs to the Kaiawahuete people, 17 00:01:39,042 --> 00:01:42,362 Speaker 1: also known as the Kayabe. The Kayabi were expelled from 18 00:01:42,362 --> 00:01:46,042 Speaker 1: the region during the government's colonization processes between the nineteen 19 00:01:46,081 --> 00:01:49,802 Speaker 1: forties and nineteen sixties. It was part of that Westport 20 00:01:49,882 --> 00:01:53,122 Speaker 1: expansion that we talked about in the first episode. Much 21 00:01:53,162 --> 00:01:56,082 Speaker 1: of this land was sold at low prices or just 22 00:01:56,202 --> 00:01:59,522 Speaker 1: invaded by farmers from the south and southeast. There are 23 00:01:59,642 --> 00:02:05,122 Speaker 1: many farms officially registered on Batalau indigenous land. The Kayabi 24 00:02:05,162 --> 00:02:08,561 Speaker 1: are now trying to get that land back, and landowners 25 00:02:08,602 --> 00:02:11,802 Speaker 1: like Miguel Vaz Rubero and Marino franz are making that 26 00:02:12,002 --> 00:02:16,002 Speaker 1: especially difficult because they're not just wealthy farmers. They also 27 00:02:16,282 --> 00:02:16,681 Speaker 1: work in. 28 00:02:16,682 --> 00:02:20,482 Speaker 3: Government pocasinguin cemit di san Polite who is dahs. 29 00:02:20,762 --> 00:02:23,922 Speaker 2: They are politicians in the region, which we see as 30 00:02:23,922 --> 00:02:26,322 Speaker 2: a major obstacle for the Kyabe to win this fight 31 00:02:26,402 --> 00:02:27,122 Speaker 2: for territory. 32 00:02:27,882 --> 00:02:30,602 Speaker 1: As an American, it would have been easy for Bruce 33 00:02:30,762 --> 00:02:34,122 Speaker 1: to start talking to the Franzis and Miguel las Robero, 34 00:02:34,682 --> 00:02:37,122 Speaker 1: even to buy some land from them without doing a 35 00:02:37,122 --> 00:02:41,002 Speaker 1: background check. But he didn't just buy land from them, 36 00:02:41,322 --> 00:02:45,122 Speaker 1: He went into business with them. Their finances are co mingled, 37 00:02:45,322 --> 00:02:48,642 Speaker 1: they've taken on debt together, and these guys are well 38 00:02:48,682 --> 00:02:52,762 Speaker 1: known in Monto Grosso not just for their businesses, but 39 00:02:52,802 --> 00:02:59,322 Speaker 1: for their involvement in various entanglements with the legal system. 40 00:02:59,722 --> 00:03:02,802 Speaker 1: I'm in me Westervelt, and you're listening to Carbon Cowboys, 41 00:03:03,282 --> 00:03:06,282 Speaker 1: the story of how the ethanol kingpin of Iowa became 42 00:03:06,322 --> 00:03:09,202 Speaker 1: the king of corn in Brazil and what it tells 43 00:03:09,282 --> 00:03:12,722 Speaker 1: us about the limits of technology and markets to solve 44 00:03:12,762 --> 00:03:16,402 Speaker 1: the climate crisis. This season is a collaboration between the 45 00:03:16,482 --> 00:03:18,042 Speaker 1: Intercept Brazil and Drilled. 46 00:03:25,162 --> 00:03:27,842 Speaker 4: What is seventy thousand? What is seventy thousand to Marina man? 47 00:03:28,042 --> 00:03:30,082 Speaker 4: For us, it's money, but for him. 48 00:03:30,682 --> 00:03:34,202 Speaker 1: This audio is from a hidden camera recording supposedly created 49 00:03:34,282 --> 00:03:39,442 Speaker 1: by Lucas de Rio Verge businessman Halio Moraga. He's trying 50 00:03:39,482 --> 00:03:43,762 Speaker 1: to negotiate a bribe from Marino Franz of the Franz Brothers. 51 00:03:44,042 --> 00:03:47,802 Speaker 1: According to Halio, he got the money from Franz and 52 00:03:47,882 --> 00:03:51,962 Speaker 1: recorded a second video of himself thanking Marino Franz for it. 53 00:03:53,322 --> 00:04:00,042 Speaker 4: Morgira, Hey Marino, how's work going? But mister Marino, I 54 00:04:00,122 --> 00:04:01,842 Speaker 4: won't take up too much of your time. I just 55 00:04:01,882 --> 00:04:03,882 Speaker 4: came to thank you because I received the seventy thousand 56 00:04:03,922 --> 00:04:04,362 Speaker 4: from that deal. 57 00:04:04,402 --> 00:04:10,042 Speaker 1: We made twenty four officials from Lucas's administration, including Marino Franz, 58 00:04:10,202 --> 00:04:14,122 Speaker 1: have been charged with administrative misconduct. The video is now 59 00:04:14,122 --> 00:04:18,921 Speaker 1: available online and the Matto Grosso Public Prosecutor's office has 60 00:04:18,962 --> 00:04:23,402 Speaker 1: stated that the case is still pending. Meanwhile, the scandals 61 00:04:23,442 --> 00:04:27,082 Speaker 1: continued at the end of Marino Franz's second term as 62 00:04:27,162 --> 00:04:30,962 Speaker 1: mayor of Lucas. In twenty twelve, he and Miguel vas Ribero, 63 00:04:31,282 --> 00:04:34,282 Speaker 1: his business partner, were accused of issuing more than eight 64 00:04:34,522 --> 00:04:39,122 Speaker 1: hundred false invoices in the names of small rural producers. 65 00:04:39,722 --> 00:04:43,802 Speaker 1: Matto Grosso's Department of Finance has not disclosed the results 66 00:04:43,842 --> 00:04:49,322 Speaker 1: of that investigation. In November twenty fourteen came another scandal. 67 00:04:49,682 --> 00:04:53,562 Speaker 5: Oh bet Ussel Operation Promised Land was launched simultaneously in 68 00:04:53,602 --> 00:04:58,362 Speaker 5: the states of Matto Grosso, Santa Carrarina, Perena and Hio 69 00:04:58,362 --> 00:05:02,402 Speaker 5: Grande do Sol. The federal police are investigating crimes involving 70 00:05:02,482 --> 00:05:07,802 Speaker 5: invasion of federal lands, document fraud and environmental crimes. Fifty 71 00:05:07,842 --> 00:05:11,562 Speaker 5: two arrests warrants were served. Three former mayors and the 72 00:05:11,562 --> 00:05:14,122 Speaker 5: interior of Matto Grosso were arrested. 73 00:05:15,282 --> 00:05:18,282 Speaker 1: By this point, Marino Franz was the former mayor of 74 00:05:18,362 --> 00:05:21,402 Speaker 1: Lucas de Rio Verde. He was accused of being part 75 00:05:21,442 --> 00:05:24,361 Speaker 1: of a scheme that moved around two hundred million dollars 76 00:05:24,482 --> 00:05:28,122 Speaker 1: through the illegal sale of plots of land in Mato Grosso. 77 00:05:29,082 --> 00:05:32,481 Speaker 1: Marino Franz only ever spent a week in jail. He 78 00:05:32,562 --> 00:05:35,162 Speaker 1: was granted a root of Habeas corpus, and eventually the 79 00:05:35,202 --> 00:05:39,362 Speaker 1: federal court decided to close the investigation against him, citing 80 00:05:39,402 --> 00:05:43,202 Speaker 1: a lack of evidence. But the Franz brothers and Miguel's 81 00:05:43,282 --> 00:05:47,762 Speaker 1: problems continued after getting into business with Bruce Io. In 82 00:05:47,802 --> 00:05:53,122 Speaker 1: twenty seventeen, agrose Rado Miguel Vaz's ama Pa company was 83 00:05:53,162 --> 00:05:57,481 Speaker 1: fined a million dollars for deforestation. That final remains active 84 00:05:57,642 --> 00:06:01,601 Speaker 1: awaiting payment or appeal. In twenty twenty five, Vaz was 85 00:06:01,602 --> 00:06:04,642 Speaker 1: fined again, this time almost six hundred thousand dollars for 86 00:06:04,762 --> 00:06:09,082 Speaker 1: planting cotton and corn within the Batelao indigenous land in 87 00:06:09,202 --> 00:06:13,402 Speaker 1: Manto Grosso. None of these scandals ever seem to stick. 88 00:06:13,682 --> 00:06:17,322 Speaker 1: Thinks mostly to the political capital these three, Marino and 89 00:06:17,362 --> 00:06:21,041 Speaker 1: Paulo Franz and Miguel vas Ribero have a mast in 90 00:06:21,282 --> 00:06:25,242 Speaker 1: Lucas for almost twenty five years. The mayor's office there 91 00:06:25,282 --> 00:06:29,602 Speaker 1: has been controlled by these guys. First they built one 92 00:06:29,602 --> 00:06:33,402 Speaker 1: of the original industrial agriculture companies in the state. 93 00:06:34,402 --> 00:06:36,322 Speaker 6: Guander, Fiagrio. 94 00:06:36,922 --> 00:06:39,442 Speaker 3: When I started Fia Grill, I brought my brother in 95 00:06:39,522 --> 00:06:42,522 Speaker 3: law to work with me. He made the best shimahau 96 00:06:42,562 --> 00:06:45,402 Speaker 3: in town, and he liked bars. So in a place 97 00:06:45,402 --> 00:06:47,962 Speaker 3: where there are a lot of young people, where there 98 00:06:48,002 --> 00:06:51,122 Speaker 3: are no phones, no radio, where no one knows anything, 99 00:06:51,562 --> 00:06:55,722 Speaker 3: news spreads through the bars. I would say to Lino, Lino, 100 00:06:56,082 --> 00:06:59,002 Speaker 3: you make the simhons talk about soccer and talk a 101 00:06:59,002 --> 00:07:01,361 Speaker 3: little bit about women and leave the rest to me. 102 00:07:02,202 --> 00:07:04,082 Speaker 3: And that's how we created Fia Grio. 103 00:07:05,722 --> 00:07:10,082 Speaker 1: This quaint family story with the inspirational piano in the background, 104 00:07:10,362 --> 00:07:14,042 Speaker 1: is being told by Marino Franz in a promotional video 105 00:07:14,442 --> 00:07:18,602 Speaker 1: for the company Fiagrill. He started Fiagrill in Lucas to 106 00:07:18,722 --> 00:07:22,122 Speaker 1: Rio Verge in nineteen eighty seven, during a fourth wave 107 00:07:22,282 --> 00:07:25,482 Speaker 1: of wealthier settlers who came to explore the region from 108 00:07:25,482 --> 00:07:29,682 Speaker 1: the south and southeast of the country. Marino was twenty 109 00:07:29,682 --> 00:07:31,882 Speaker 1: four at the time, but had been living in Lucas 110 00:07:31,882 --> 00:07:35,682 Speaker 1: since he was eighteen. Like their counterparts in the US, 111 00:07:35,922 --> 00:07:39,602 Speaker 1: lots of industrial ad guys in Brazil liked to pretend 112 00:07:39,882 --> 00:07:44,122 Speaker 1: to just be folksye farmers down the street. Marino describes 113 00:07:44,162 --> 00:07:48,602 Speaker 1: the creation of Fiagrill, which sells seeds, fertilizers and pasticides 114 00:07:48,722 --> 00:07:52,202 Speaker 1: like an artisanal farm stand at the local farmers market. 115 00:07:52,682 --> 00:07:56,202 Speaker 1: But in twenty twenty four, Fiagrill had gross revenues of 116 00:07:56,322 --> 00:08:00,162 Speaker 1: seven hundred million dollars. It has twenty eight branches in 117 00:08:00,282 --> 00:08:04,282 Speaker 1: four states, four warehouses, more than five hundred employees, and 118 00:08:04,482 --> 00:08:09,442 Speaker 1: Chinese and American shareholders. Palo Franz, Marino's younger brother, arrived 119 00:08:09,442 --> 00:08:13,122 Speaker 1: in Lucas in nineteen ninety five and now together they 120 00:08:13,162 --> 00:08:16,922 Speaker 1: own around forty thousand hectares of land in monte Grosso, 121 00:08:17,282 --> 00:08:20,202 Speaker 1: equivalent to around a quarter of the city of Salpallo. 122 00:08:21,882 --> 00:08:23,482 Speaker 6: Marin Jose Fresquandi. 123 00:08:23,602 --> 00:08:26,242 Speaker 7: I met Marino Jose friends when he was already a businessman. 124 00:08:26,402 --> 00:08:29,122 Speaker 7: Then I became friends with Marino, a business relationship, so 125 00:08:29,162 --> 00:08:31,682 Speaker 7: to speak. And then in nineteen ninety six I decided 126 00:08:31,722 --> 00:08:33,762 Speaker 7: to leave the company I was representing and became a 127 00:08:33,802 --> 00:08:34,602 Speaker 7: partner at Fiagora. 128 00:08:36,002 --> 00:08:39,761 Speaker 1: See this is Miguel Vaz, the current mayor of Lucas. 129 00:08:39,761 --> 00:08:43,082 Speaker 1: In the same promotional video, he and Marino created an 130 00:08:43,122 --> 00:08:47,122 Speaker 1: important alliance at Fiagrill, which would later branch out into 131 00:08:47,161 --> 00:08:51,201 Speaker 1: other businesses, including fas. With the help of their foray 132 00:08:51,322 --> 00:08:55,761 Speaker 1: into local politics, in two thousand and one, Marino Franz 133 00:08:55,842 --> 00:09:00,521 Speaker 1: became deputy mayor of Lucas under Ottaviano Piveta. He graduated 134 00:09:00,521 --> 00:09:03,562 Speaker 1: to mayor in two thousand and five, where he remained 135 00:09:03,641 --> 00:09:08,161 Speaker 1: until twenty twelve. In the twenty twelve election, Fiagrill donated 136 00:09:08,202 --> 00:09:11,082 Speaker 1: more than half a million ray ice around ninety eight 137 00:09:11,161 --> 00:09:15,282 Speaker 1: thousand dollars to the campaign of Otabiano Piveta, who became 138 00:09:15,401 --> 00:09:18,522 Speaker 1: mayor of Lucas for the third time, with none other 139 00:09:18,561 --> 00:09:22,362 Speaker 1: than Miguel Vaz as his deputy. In twenty twenty one, 140 00:09:22,641 --> 00:09:26,961 Speaker 1: it was Vaz's turn to become mayor of Lucas. That's 141 00:09:27,002 --> 00:09:29,802 Speaker 1: when the video of the bribery scandal came to light. 142 00:09:30,122 --> 00:09:32,562 Speaker 1: It didn't seem to make a difference, though Vaz won 143 00:09:32,681 --> 00:09:36,441 Speaker 1: with nearly sixty percent of the vote after the break. 144 00:09:36,842 --> 00:09:39,521 Speaker 1: How they put that political power to work for Bruce. 145 00:09:48,281 --> 00:09:51,641 Speaker 1: Remember when Bruce Rastetter first went to Brazil, he was 146 00:09:51,681 --> 00:09:54,802 Speaker 1: licking his wounds after a big land deal in Tanzania 147 00:09:55,002 --> 00:09:58,042 Speaker 1: went south. He needed a shirt bat and the brothers 148 00:09:58,082 --> 00:10:00,521 Speaker 1: Franz and their pal Miguel could deliver it. 149 00:10:01,041 --> 00:10:03,521 Speaker 8: I've always believed that Brazil will be the other country 150 00:10:03,561 --> 00:10:06,122 Speaker 8: in the world. In particular the supplies the majority of 151 00:10:06,122 --> 00:10:09,201 Speaker 8: the world's food going forward and food production. It's a 152 00:10:09,281 --> 00:10:13,202 Speaker 8: country that most readily accepts US technology outside of the US, 153 00:10:14,041 --> 00:10:17,602 Speaker 8: and so began traveling there four and a half five 154 00:10:17,681 --> 00:10:21,082 Speaker 8: years ago decided that we would form a fund to 155 00:10:21,122 --> 00:10:23,202 Speaker 8: buy a single farm. Take our time. 156 00:10:23,761 --> 00:10:27,442 Speaker 1: That's Bruce speaking at a Brazilian American Chamber of Commerce 157 00:10:27,482 --> 00:10:29,441 Speaker 1: seminar in twenty sixteen. 158 00:10:30,002 --> 00:10:35,082 Speaker 8: Our partner in Brazil is Viagre, a large supply input 159 00:10:35,161 --> 00:10:37,761 Speaker 8: company to farmers. So we continue to look forward to 160 00:10:37,842 --> 00:10:41,401 Speaker 8: kind of walking before we run in Brazil and took 161 00:10:41,442 --> 00:10:44,242 Speaker 8: time to get through that government process, but also looking 162 00:10:44,281 --> 00:10:46,682 Speaker 8: forward to corneathan all which we think will be a 163 00:10:46,722 --> 00:10:52,842 Speaker 8: significant compliment to sugarcane outthanol as biotechnology takes place in Brazil. 164 00:10:57,842 --> 00:11:01,242 Speaker 1: Follo Franz, the young Franz brother, is a big fan 165 00:11:01,401 --> 00:11:04,562 Speaker 1: of the United States and of Bruce in particular. His 166 00:11:04,801 --> 00:11:09,122 Speaker 1: Instagram account currently has ten posts, Three of them feature 167 00:11:09,161 --> 00:11:12,681 Speaker 1: Bruce and other features the US national anthem being played 168 00:11:12,722 --> 00:11:15,922 Speaker 1: during an American football game at Iowa State University, where 169 00:11:15,962 --> 00:11:19,202 Speaker 1: Paulo says he studied and where Rastetter was on the 170 00:11:19,202 --> 00:11:23,082 Speaker 1: board of regents for years. A fifth post features Paolo 171 00:11:23,202 --> 00:11:26,402 Speaker 1: himself with a satisfied smile, holding a pizza and a 172 00:11:26,442 --> 00:11:30,482 Speaker 1: Coca Cola with an Iowa State University baseball cap. Here's 173 00:11:30,521 --> 00:11:33,201 Speaker 1: Paolo talking about his love of the US on an 174 00:11:33,242 --> 00:11:39,521 Speaker 1: agricultural podcast, enthusiastopol. 175 00:11:40,602 --> 00:11:43,962 Speaker 2: I've always been enthusiastic about the United States, right like 176 00:11:44,041 --> 00:11:46,242 Speaker 2: it or not. In college here in Brazil you learned 177 00:11:46,242 --> 00:11:49,081 Speaker 2: about irrigation or free growing, and they use the example 178 00:11:49,082 --> 00:11:51,962 Speaker 2: of California, and there's the influence of music movies. 179 00:11:52,082 --> 00:11:57,202 Speaker 1: Right after buying land from the Franzas, Bruce agreed to 180 00:11:57,242 --> 00:12:00,122 Speaker 1: go into business with them and their partner, Miguel on 181 00:12:00,202 --> 00:12:02,482 Speaker 1: a corn as an all company they called at the 182 00:12:02,521 --> 00:12:07,521 Speaker 1: time fs bi Energia f for fiagril s for Summit. 183 00:12:08,482 --> 00:12:13,362 Speaker 1: In August twenty seventeen, Bruce, the Franz Brothers, and Miguel 184 00:12:13,442 --> 00:12:17,362 Speaker 1: Vas inaugurated their first corn ethnol plant in Lucas do 185 00:12:17,561 --> 00:12:20,561 Speaker 1: Rio Virji. The event was attended by none other than 186 00:12:20,722 --> 00:12:25,321 Speaker 1: then President of Brazil Michel Temer and his Minister of 187 00:12:25,362 --> 00:12:29,122 Speaker 1: Agriculture Leiro Magji, a partner in one of the largest 188 00:12:29,322 --> 00:12:31,201 Speaker 1: soybean producers in Mato. 189 00:12:31,041 --> 00:12:35,922 Speaker 2: Rosso, Fiscus Michelle. I make sure that President Michelle Tamak 190 00:12:36,041 --> 00:12:37,922 Speaker 2: came here so that he could see and help us 191 00:12:37,921 --> 00:12:41,761 Speaker 2: publicize and even lobby official agencies to also start financing 192 00:12:41,801 --> 00:12:45,842 Speaker 2: this type of investment, something that still does not happen today. 193 00:12:46,761 --> 00:12:50,722 Speaker 1: Words and promises from Agricultural Minister Blero Magji during the 194 00:12:50,761 --> 00:12:56,442 Speaker 1: factory's inauguration ceremony in twenty nineteen, things got even better 195 00:12:56,681 --> 00:13:00,202 Speaker 1: for Bruce and his Brazilian business. 196 00:13:00,362 --> 00:13:03,042 Speaker 8: Lagos a Vigos ski Moscaviditch. 197 00:13:03,242 --> 00:13:05,722 Speaker 7: Hello, my friends, I just received an important visit here 198 00:13:05,761 --> 00:13:08,002 Speaker 7: in our office from the FS Group, which is investing 199 00:13:08,041 --> 00:13:10,282 Speaker 7: in ethanol here in the state of Madra Grasso. You're 200 00:13:10,322 --> 00:13:13,202 Speaker 7: with us or Marie Friends, one of the investors in Rafael, 201 00:13:13,401 --> 00:13:16,521 Speaker 7: the company's CEO. Today, they already operated ethanol plant in 202 00:13:16,561 --> 00:13:19,122 Speaker 7: the city of Lucas. They're building another plant scheduled to 203 00:13:19,122 --> 00:13:21,482 Speaker 7: open in January twenty twenty in the city of Soriso, 204 00:13:21,602 --> 00:13:23,242 Speaker 7: and right now they're starting a new plant there in 205 00:13:23,281 --> 00:13:25,561 Speaker 7: the city of Novamutin. We also discussed the tax and 206 00:13:25,602 --> 00:13:27,521 Speaker 7: Center program that will be important for the growth of 207 00:13:27,561 --> 00:13:30,602 Speaker 7: the sector, which will revolutionize agrobusiness here in our state. 208 00:13:32,202 --> 00:13:35,681 Speaker 1: That's former Governor of Monte Grosso Mauro Mendez in a 209 00:13:35,801 --> 00:13:39,401 Speaker 1: video he posted to his Facebook page in July twenty nineteen. 210 00:13:39,681 --> 00:13:43,921 Speaker 1: Marino Franz and fs CEO Rafael abud Are by his side. 211 00:13:44,521 --> 00:13:47,962 Speaker 1: Fs built three more plants in the state after that announcement. 212 00:13:54,681 --> 00:13:58,562 Speaker 1: The Soriizo plant began operating in twenty twenty, followed by 213 00:13:58,641 --> 00:14:01,442 Speaker 1: the prima Vera do Leste plant in twenty twenty three. 214 00:14:01,921 --> 00:14:04,641 Speaker 1: The fourth plant was announced in twenty twenty five and 215 00:14:04,842 --> 00:14:08,401 Speaker 1: is under construction in the city of Campo Novo do Parresis. 216 00:14:09,041 --> 00:14:13,081 Speaker 1: The fifth is planned for the municip of Querencia. The 217 00:14:13,202 --> 00:14:16,122 Speaker 1: Matto Grosso government has given its support to the company 218 00:14:16,242 --> 00:14:20,321 Speaker 1: since at least twenty nineteen. As Governor Morolmndez said in 219 00:14:20,442 --> 00:14:24,482 Speaker 1: his video, f S secured more than three hundred million 220 00:14:24,602 --> 00:14:28,201 Speaker 1: dollars in tax breaks from the state since then. In 221 00:14:28,322 --> 00:14:31,642 Speaker 1: twenty twenty two, Bruce was made an honorary citizen of 222 00:14:31,762 --> 00:14:34,282 Speaker 1: Lucus to Rio Verge and also received one of the 223 00:14:34,322 --> 00:14:38,202 Speaker 1: state's highest honors, the Accommodation of the Order of merit 224 00:14:38,322 --> 00:14:42,482 Speaker 1: of Mato Grosso, but land and political power wasn't enough. 225 00:14:42,842 --> 00:14:44,882 Speaker 1: Bruce and the guys were in the carbon business too. 226 00:14:45,842 --> 00:14:47,002 Speaker 1: Here's Paulo Franz. 227 00:14:48,882 --> 00:14:51,322 Speaker 2: We have studies on our farm, the proof that corn 228 00:14:51,442 --> 00:14:54,722 Speaker 2: going on top of soybean's sequesters more carbon than an 229 00:14:54,922 --> 00:14:58,362 Speaker 2: entire standing forest. This is serious, This is. 230 00:14:58,522 --> 00:14:59,162 Speaker 9: Very near. 231 00:15:00,762 --> 00:15:04,042 Speaker 1: To be clear. Scientists say the exact opposite a mature 232 00:15:04,122 --> 00:15:07,642 Speaker 1: forest stores fifty to one hundred times more carbon than 233 00:15:07,681 --> 00:15:11,642 Speaker 1: a corn soybean field or a soybean corn field. It 234 00:15:11,882 --> 00:15:14,802 Speaker 1: doesn't really matter, though it sounds good, and these guys 235 00:15:14,882 --> 00:15:18,081 Speaker 1: have enough political power that no one really questions them. 236 00:15:19,242 --> 00:15:23,201 Speaker 1: Thanks to Bruce's powerful Brazilian partners, he's been able to 237 00:15:23,242 --> 00:15:27,002 Speaker 1: get things going more easily here than back home. In 238 00:15:27,082 --> 00:15:31,042 Speaker 1: December twenty twenty five, three months after Brazilian government officials 239 00:15:31,202 --> 00:15:34,961 Speaker 1: visited Bruce in the US, the Brazilian Development Bank released 240 00:15:35,202 --> 00:15:39,762 Speaker 1: seventy million dollars to fund fs's carbon storage project in 241 00:15:39,882 --> 00:15:44,601 Speaker 1: Lucas do Rio Verge. The company has now rebranded to 242 00:15:44,962 --> 00:15:49,762 Speaker 1: FS Fueling Sustainability is thumbs plunt thump. 243 00:15:49,882 --> 00:15:53,482 Speaker 10: We are planting a new seed, the seed of the 244 00:15:53,561 --> 00:15:57,282 Speaker 10: fuel of the future. It will generate more than two 245 00:15:57,442 --> 00:16:01,522 Speaker 10: hundred and sixty billion in investments in agriculture and the 246 00:16:01,681 --> 00:16:06,042 Speaker 10: biofuel chain. The Fuel of the Future puts Brazil at 247 00:16:06,082 --> 00:16:09,762 Speaker 10: the forefront of the new economy, the green economy. 248 00:16:10,522 --> 00:16:14,201 Speaker 9: That's more more than forty billion in new investments and 249 00:16:14,362 --> 00:16:18,321 Speaker 9: more than twenty five billion for the creation of sugarcane fields, 250 00:16:18,602 --> 00:16:20,842 Speaker 9: corn fields and transportation. 251 00:16:22,002 --> 00:16:25,762 Speaker 1: This is Brazilian Minister of Minds and Energy Alexander Silvera, 252 00:16:25,962 --> 00:16:29,201 Speaker 1: speaking during the ceremony to sign the Fuels of the 253 00:16:29,362 --> 00:16:33,922 Speaker 1: Future Bill into law in October twenty twenty four. The 254 00:16:34,042 --> 00:16:36,882 Speaker 1: law sets out a set of initiatives to promote low 255 00:16:36,962 --> 00:16:41,081 Speaker 1: carbon transportation as a way to reduce greenhouse gas emissions. 256 00:16:41,722 --> 00:16:45,441 Speaker 1: It incentivizes a gradual increase in the percentage of ethanol 257 00:16:45,561 --> 00:16:49,282 Speaker 1: mixed in with gasoline, provides a legal framework for carbon 258 00:16:49,322 --> 00:16:53,922 Speaker 1: capture and storage, and encourages the research, production and sale 259 00:16:54,042 --> 00:16:59,802 Speaker 1: of so called sustainable aviation fuel. The expansion of ethanol, 260 00:17:00,002 --> 00:17:03,961 Speaker 1: sustainable aviation fuel, and carbon capture and storage are also 261 00:17:04,122 --> 00:17:07,722 Speaker 1: the only things Trump saved from Biden's climate policy, the 262 00:17:07,962 --> 00:17:12,562 Speaker 1: Inflation Reduction Act. The Fuel of the Future Act triggered 263 00:17:12,642 --> 00:17:17,482 Speaker 1: a substantial shift in fs's fortunes with the increase in 264 00:17:17,561 --> 00:17:21,362 Speaker 1: demand for ethanol and gasoline. In the twenty twenty four 265 00:17:21,482 --> 00:17:24,362 Speaker 1: to twenty twenty five crop here, the company saw its 266 00:17:24,442 --> 00:17:29,202 Speaker 1: net revenue grow by thirty two percent after posting a 267 00:17:29,282 --> 00:17:33,202 Speaker 1: loss of almost one hundred million dollars just two years ago. 268 00:17:33,522 --> 00:17:38,201 Speaker 1: Today FS has net profits of over two hundred million dollars. 269 00:17:38,802 --> 00:17:43,442 Speaker 1: No but aszuben fazendun trabado and zuchu Muslim's important insistitution analogy. 270 00:17:44,682 --> 00:17:47,922 Speaker 11: Brazil has been doing important institutional work in recent years 271 00:17:47,962 --> 00:17:51,881 Speaker 11: to promote biofuels and increase blends. Yeah, and now we 272 00:17:52,042 --> 00:17:55,242 Speaker 11: had the Fuel of the Future program that implemented E thirty, 273 00:17:55,402 --> 00:17:56,841 Speaker 11: which further expanded the market. 274 00:17:56,962 --> 00:17:57,081 Speaker 3: Right. 275 00:17:57,561 --> 00:18:01,682 Speaker 1: Hafeil Labud, CEO of FS, is the public face of 276 00:18:01,802 --> 00:18:05,482 Speaker 1: the company in Brazil. He's the one you'll usually see 277 00:18:05,561 --> 00:18:08,722 Speaker 1: being interviewed by the press. In this interview you just 278 00:18:08,841 --> 00:18:12,002 Speaker 1: heard given in twenty twenty five on a business podcast, 279 00:18:12,642 --> 00:18:15,922 Speaker 1: he's talking about the increase in corn ethanol consumption in 280 00:18:16,002 --> 00:18:20,121 Speaker 1: the country. Corn Ethanol already represents about twenty five percent 281 00:18:20,242 --> 00:18:24,082 Speaker 1: of Brazil's ethanol market. The other seventy five percent comes 282 00:18:24,121 --> 00:18:30,322 Speaker 1: from ethanol made from sugarcaneangel. 283 00:18:27,922 --> 00:18:29,601 Speaker 11: If you take what you already have in terms of 284 00:18:29,762 --> 00:18:32,762 Speaker 11: plants and a construction and projects that are really moving 285 00:18:32,882 --> 00:18:35,601 Speaker 11: forward and will start operating the next two or three years. 286 00:18:35,962 --> 00:18:38,722 Speaker 11: By twenty twenty eight, at least forty to forty five 287 00:18:38,802 --> 00:18:40,642 Speaker 11: percent will already be contracted yet. 288 00:18:40,762 --> 00:18:43,762 Speaker 3: In other words, the people watching us don't even know it, 289 00:18:44,081 --> 00:18:46,321 Speaker 3: but they are fueling up or will very soon be 290 00:18:46,402 --> 00:18:48,002 Speaker 3: fielding up with corn ethanol. 291 00:18:48,282 --> 00:18:48,802 Speaker 1: Oh totally. 292 00:18:49,042 --> 00:18:51,362 Speaker 11: Everyone already feels up with corn ethanol in some way. 293 00:18:51,442 --> 00:18:56,242 Speaker 1: Right. To support the ambitions of corn ethanol producers, the 294 00:18:56,282 --> 00:18:59,482 Speaker 1: Brazilian government has approved public funding of more than six 295 00:18:59,601 --> 00:19:03,682 Speaker 1: hundred million dollars into expanding the corn ethanol industry over 296 00:19:03,722 --> 00:19:07,201 Speaker 1: the past six years. FAS alone received more than two 297 00:19:07,282 --> 00:19:14,401 Speaker 1: hundred million dollars during that periods. 298 00:19:15,242 --> 00:19:19,202 Speaker 5: It was before the well you drilled was a success story, 299 00:19:19,561 --> 00:19:23,202 Speaker 5: even a luney experience for the regulatory agency. Please correct 300 00:19:23,202 --> 00:19:23,841 Speaker 5: me if I'm wrong. 301 00:19:24,802 --> 00:19:28,561 Speaker 1: This is Aluisa Borgeses, director of Oil, gas and Biofuel 302 00:19:28,561 --> 00:19:32,922 Speaker 1: Studies at the Energy Research Company linked to the Ministry 303 00:19:33,002 --> 00:19:36,922 Speaker 1: of Minds and Energy in Brazil. She's talking to Daniel Lopez, 304 00:19:37,042 --> 00:19:41,762 Speaker 1: vice president of Sustainability and New Business at FS. They're 305 00:19:41,841 --> 00:19:44,522 Speaker 1: on a panel and they're discussing a carbon capture and 306 00:19:44,642 --> 00:19:48,242 Speaker 1: storage project that FS is building in Lucas to Rio Vergi. 307 00:19:49,042 --> 00:19:53,002 Speaker 1: FS contacted the National Agency of Petroleum, Natural Gas and 308 00:19:53,081 --> 00:19:58,361 Speaker 1: Biofuels initially in twenty twenty two, requesting authorization to conduct 309 00:19:58,482 --> 00:20:02,641 Speaker 1: studies on wells in the Parisis Basin in Lucas for 310 00:20:02,762 --> 00:20:06,522 Speaker 1: the purpose of carbon capture and storage. The license was 311 00:20:06,601 --> 00:20:10,361 Speaker 1: granted just three days after they made their request. However, 312 00:20:10,682 --> 00:20:15,321 Speaker 1: this raise questions within the permitting agency itself, with some 313 00:20:15,482 --> 00:20:18,841 Speaker 1: officials pointing out that the license was very broad and 314 00:20:19,042 --> 00:20:22,482 Speaker 1: did not explicitly state that the company's ultimate goal was 315 00:20:22,601 --> 00:20:26,042 Speaker 1: carbon capture and storage. At the time, there were no 316 00:20:26,282 --> 00:20:30,881 Speaker 1: regulations in the country at all governing carbon capture. There 317 00:20:31,002 --> 00:20:33,601 Speaker 1: still aren't, it's still being figured out. It was the 318 00:20:33,642 --> 00:20:36,602 Speaker 1: Fuel of the Future Act passed in twenty twenty four 319 00:20:37,442 --> 00:20:42,242 Speaker 1: that set the mandate of creating those regulations. So, after 320 00:20:42,321 --> 00:20:46,122 Speaker 1: being quickly approved, fs's initial permit for its carbon capture 321 00:20:46,162 --> 00:20:50,882 Speaker 1: project was suspended. To get around that, a government official 322 00:20:51,042 --> 00:20:55,762 Speaker 1: advised the Legal department of FS to amend the company's 323 00:20:55,922 --> 00:21:00,962 Speaker 1: articles and corporation to align with the proposed activity, and 324 00:21:01,321 --> 00:21:05,161 Speaker 1: it worked. The government reinstated the permit to FS and 325 00:21:05,402 --> 00:21:08,882 Speaker 1: drilling went ahead even without a regulatory framework. 326 00:21:14,722 --> 00:21:20,162 Speaker 6: That's completely absurd. What the civil servant did is totally unacceptable. 327 00:21:21,162 --> 00:21:23,962 Speaker 12: He can say that this is the rule, this is 328 00:21:24,081 --> 00:21:27,562 Speaker 12: how it should be, and you don't meet these requirements, 329 00:21:29,162 --> 00:21:32,641 Speaker 12: but he can suggest that the company does something to 330 00:21:32,762 --> 00:21:33,762 Speaker 12: comply with the rule. 331 00:21:34,642 --> 00:21:39,081 Speaker 1: That's Fabiana Augusta, professor of public law and director of 332 00:21:39,121 --> 00:21:43,361 Speaker 1: the Brazilian Bar Association. The Brazilian agency denied that a 333 00:21:43,442 --> 00:21:48,321 Speaker 1: recommendation was made to FAS to amend its articles of incorporation. However, 334 00:21:48,561 --> 00:21:53,082 Speaker 1: we obtained emails in which three different codes and descriptions 335 00:21:53,242 --> 00:21:57,641 Speaker 1: of economic activity were suggested by the agency to fs 336 00:21:59,002 --> 00:22:03,242 Speaker 1: fs's plans for this project are still underway. In September 337 00:22:03,321 --> 00:22:07,202 Speaker 1: twenty twenty five, some public managers had their travel expenses 338 00:22:07,282 --> 00:22:11,642 Speaker 1: paid by an association of corn ethanol entrepreneurs to visit 339 00:22:11,762 --> 00:22:15,402 Speaker 1: successful carbon capture and storage projects in the United States. 340 00:22:15,882 --> 00:22:18,122 Speaker 1: That was the visit you heard about in episode one. 341 00:22:19,042 --> 00:22:23,081 Speaker 1: Among the projects they visited was Bruce Rastetter's Midwest Carbon 342 00:22:23,162 --> 00:22:28,002 Speaker 1: Express Pipeline project, which hasn't even started construction yet. It 343 00:22:28,121 --> 00:22:31,401 Speaker 1: was supposed to be operational by twenty twenty four and 344 00:22:31,482 --> 00:22:33,642 Speaker 1: they're still waiting to start building. 345 00:22:37,402 --> 00:22:43,442 Speaker 2: Induzu FS is promoting regulation, pioneering, perspecting, and even drawing 346 00:22:43,522 --> 00:22:46,121 Speaker 2: on the experience of its partners in the United States, 347 00:22:46,922 --> 00:22:50,121 Speaker 2: and Summit Carbon Solutions is undertaking a major project to 348 00:22:50,202 --> 00:22:54,921 Speaker 2: become a large CO two concentrator. Summit Carbon Solutions is pioneering. 349 00:22:55,682 --> 00:22:58,642 Speaker 2: The pioneer serves as a model for regulators to act upon, 350 00:22:59,042 --> 00:23:02,202 Speaker 2: and together with these observations and other markets, the anp 351 00:23:02,442 --> 00:23:04,841 Speaker 2: will be able to regulate here in Brazil. 352 00:23:06,522 --> 00:23:10,962 Speaker 1: Afail borrows Arujo is a technical consultant at Brazil's Energy 353 00:23:11,282 --> 00:23:14,802 Speaker 1: Research Office who participated in the trip to the United 354 00:23:14,841 --> 00:23:17,762 Speaker 1: States in September twenty twenty five, the one we heard 355 00:23:17,762 --> 00:23:21,482 Speaker 1: about in episode one. Three months after that visit, FAS 356 00:23:21,561 --> 00:23:24,361 Speaker 1: would receive its seventy eight million dollar loan from the 357 00:23:24,402 --> 00:23:30,242 Speaker 1: Brazilian Development Bank to start burying its carbon in Lucas. Favoritism, 358 00:23:30,601 --> 00:23:34,441 Speaker 1: luck or just a window of opportunity, as business people say. 359 00:23:35,482 --> 00:23:40,522 Speaker 4: Vero he DM, hey, bruci tortisdo so. 360 00:23:40,561 --> 00:23:43,362 Speaker 7: When I come here, Marino and Bruce send everyone. When 361 00:23:43,402 --> 00:23:45,242 Speaker 7: I come here, I actually come with the feeling that 362 00:23:45,282 --> 00:23:48,482 Speaker 7: Brazil is thriving and trusts what we're doing. No one invests. 363 00:23:48,522 --> 00:23:50,002 Speaker 7: If they don't know that later on they will make 364 00:23:50,042 --> 00:23:53,361 Speaker 7: a profit, they'll have more than legitimate financial advantages. 365 00:23:54,162 --> 00:23:57,321 Speaker 1: These words from then Brazilian President Michel Timer at the 366 00:23:57,442 --> 00:24:00,682 Speaker 1: inauguration of Fas and Lucas to Rio Verge in twenty 367 00:24:00,762 --> 00:24:05,681 Speaker 1: seventeen seem prophetic. Brus AND's partners marketed the plant's opening 368 00:24:05,841 --> 00:24:08,722 Speaker 1: as the launch of a sustainable future for the country 369 00:24:08,962 --> 00:24:12,202 Speaker 1: and the world. But in the nearly decades since, all 370 00:24:12,242 --> 00:24:14,762 Speaker 1: they've managed to do is turn Lucas do Rio Verge 371 00:24:15,361 --> 00:24:20,562 Speaker 1: into a testing ground for questionable green solutions and skyrocket 372 00:24:20,642 --> 00:24:25,602 Speaker 1: their profits in the process. Remember what agricultural consultant Corey 373 00:24:25,682 --> 00:24:28,762 Speaker 1: Melby said last episode about what Bruce and his partners 374 00:24:28,802 --> 00:24:38,802 Speaker 1: at FS think about sustainability opportunity. Lucas's future doesn't look 375 00:24:38,922 --> 00:24:42,242 Speaker 1: promising to everyone. For a lot of locals, it's actually 376 00:24:42,282 --> 00:24:45,841 Speaker 1: pretty bleak. And what's protecting this corn ethanol boom in 377 00:24:45,962 --> 00:24:50,481 Speaker 1: Brazil is a thin green veil that separates the habs 378 00:24:50,561 --> 00:24:54,482 Speaker 1: from the have nots. In this next episode, we're going 379 00:24:54,561 --> 00:24:56,402 Speaker 1: to take you on a visit to Lucas do Rio 380 00:24:56,522 --> 00:24:59,922 Speaker 1: Verge and show you the other side of Bruce's business 381 00:25:00,202 --> 00:25:06,722 Speaker 1: in Brazil. We reached out to Bruce Rastetter, Harold Ham, 382 00:25:07,162 --> 00:25:10,921 Speaker 1: the Frownz Brothers, Miguel Vos Ribero, and all Summit Company 383 00:25:11,282 --> 00:25:14,962 Speaker 1: and Brazilian government agencies mentioned in this season for comment 384 00:25:15,042 --> 00:25:18,681 Speaker 1: and have incorporated any responses we received throughout the season. 385 00:25:19,402 --> 00:25:23,441 Speaker 3: Carbon Cowboys Cowboys of the Sejadu is a collaboration between 386 00:25:23,561 --> 00:25:25,282 Speaker 3: Drilled and The Intercept to Brazil. 387 00:25:25,442 --> 00:25:29,002 Speaker 1: The show was reported and written by Philippe Sabrina and 388 00:25:29,202 --> 00:25:30,522 Speaker 1: me Amy Westervelt. 389 00:25:31,042 --> 00:25:34,762 Speaker 3: Our editors are Audrey Queen in the US and Alisi 390 00:25:34,841 --> 00:25:36,042 Speaker 3: Desolza in Brazil. 391 00:25:36,242 --> 00:25:39,722 Speaker 1: Our senior producer and sound designer is Martin saltz Ostwek. 392 00:25:40,202 --> 00:25:44,242 Speaker 1: Audio production and sound design in Brazil by Marcia Heberdoza 393 00:25:44,442 --> 00:25:45,522 Speaker 1: and Philippe MoOx. 394 00:25:46,601 --> 00:25:49,442 Speaker 6: Theme songs and original music by Eric Dna. 395 00:25:49,642 --> 00:25:54,042 Speaker 1: Additional music by Martin saltz Ostwik. Our engineer is Peter Duff. 396 00:25:54,802 --> 00:25:56,882 Speaker 6: Artwork for Drilled is by Matt Fleming. 397 00:25:57,202 --> 00:26:00,562 Speaker 1: US fact checking from Naomi Bar Brazil. 398 00:26:00,722 --> 00:26:02,682 Speaker 6: Fact checking by Studio Fronteta. 399 00:26:02,882 --> 00:26:06,522 Speaker 1: Our first Amendment attorney is James Wheaton the First Amendment Project. 400 00:26:07,162 --> 00:26:10,762 Speaker 1: We are also proud members of Reporter Shield Big. Thanks 401 00:26:10,802 --> 00:26:14,841 Speaker 1: also to Andrew Fishman, President of the Intercept Brazil. 402 00:26:15,482 --> 00:26:18,081 Speaker 6: Drilled is distributed by Pushkin Industries. 403 00:26:18,442 --> 00:26:22,322 Speaker 1: Huge thanks to the team there, including Greta Cohen, Eric Sandler, 404 00:26:22,561 --> 00:26:27,962 Speaker 1: Grace Ross, Morgan Ratner, Owen Miller, Kira Posey, Jordan McMillan, 405 00:26:28,482 --> 00:26:32,922 Speaker 1: Brian Schreberneck and Jake Flanagan. To hear the Portuguese version 406 00:26:33,002 --> 00:26:36,321 Speaker 1: of this series, head over to the Intercept Brazil's site 407 00:26:36,962 --> 00:26:40,361 Speaker 1: or search for the Intercept Brazil's podcast feed wherever you 408 00:26:40,561 --> 00:26:41,762 Speaker 1: listen to podcasts.