Nebraska is the nation’s second leading ethanol producing state behind Iowa. Nebraska’s ethanol capacity is 1.6 billion gallons. But, Nebraska exports 96.5 percent of that ethanol out-of-state.

Nebraska is abundant in renewable energy. The state ranks 6th in the nation in wind energy potential and 9th in the nation in solar energy potential. With so much of the state’s ethanol production shipped out of state to add value, maybe Nebraska could follow Brazil’s lead.

Reuters reported Tuesday that Brazil opened the “world’s first ethanol-fueled power plant in an effort by the South American biofuels giant to increase the global use of ethanol and boost its clean power generation. ”

According to the article, the project is a joint effort between state-run oil giant Petrobras and General Electric Co, which helped design the plant.

The article said that Brazil is the world’s largest ethanol exporter and is working with Japan to develop biofuels power generation there.

According to the article, Petrobras with the help of GE upgraded the 87-megawatt power plant to switch between running on natural gas or ethanol instantaneously. Brazil primarily relies on hydroelectric power but needs backup thermoelectric generation during the dry season.

According to GE, tests showed switching the plant to ethanol reduced carbon dioxide emissions without lowering energy output.

GE has around 770 turbines like those used in the Juiz de Fora plant, including many in Japan, that could be converted to run on ethanol, the article said.

A large scale plant like that could never replace a major coal power generating plant. Smaller ethanol power plants could provide supplemental electrical power to small communities on a scale like wind turbine power. Even better, a small community could build an ethanol plant and create ethanol from the refuse the community generates to feed the power plant, along with providing a market for an area ethanol producing plant.

The article said Brazil is expected to produce a record 27.8 billion liters of ethanol in the 2009/2010 season. It began its biofuels program 30 years ago and now mandates a minimum 20 percent of ethanol in gasoline. The U.S. is currently is looking to increase ethanol in the gas supply from 10 percent to 15 percent on a voluntary basis.

The U.S. imports about 60 percent of its oil supply that is used to make gasoline. Those imports contribute about one-third of this country’s negative trade balance.

While the U.S. ethanol supply comes from corn,  Brazil’s ethanol production comes from sugar cane milled by companies such as Cosan or commodities giants including Cargill Inc, Bunge and ADM Co., according to the article.

Domestic demand for ethanol is being driven by the popularity of the flex-fuel car technology that was launched in 2003 and now makes up around 90 percent of new vehicle sales in Brazil, according to the article.