The Brazilian government is declaring victory in its decades-long struggle to become self-sufficient in the supply of oil. The milestone is cause for celebration in a country that has long paid a high price for imported energy.

The Brazilian government is declaring victory in its decades-long struggle to become self-sufficient in the supply of oil. The milestone is cause for celebration in a country that has long paid a high price for imported energy.

It will also reverberate here in the United States where policy-makers, too, are trying to wean the nation from costly imports, jittery markets and the foreign spigot. But we must learn the right lessons. Brazil's success came not from treating oil as an addiction but by producing even more of the stuff and by becoming even more dependent on world markets

Here in the United States, most attention to Brazil's fuel supply has focused on the country's aggressive program to replace oil with ethanol that is made by fermenting homegrown sugar. American newspapers are filled with stories about Brazil's famous "flex fuel" vehicles that make it easy to switch between ethanol and conventional gasoline.

Guided partly by Brazil's apparent success, American policy-makers are crafting new mandates for ethanol, and flex fuel vehicles are now taking shape. We have the impression that ethanol is king.

In reality, ethanol is a minor player in Brazilian energy supply. It accounts for less than one-tenth of all the country's energy liquids.

The real source of Brazil's self-sufficiency is the country's extraordinary success in producing more oil. After the 1970s oil shocks, when Brazil's fuel import bill soared, the government pushed Petrobras, the state-controlled oil company, to look asunder for new energy sources.

Petrobras delivered, especially at home, where the firm pioneered the technologies that make it possible to extract oil locked in sediments under the seabed in extremely deep water. In the middle 1970s Brazil struggled to produce just 180,000 barrels of oil per day while importing four times that amount. Today it produces about 2 million and is self-sufficient. Indeed, the current milestone of self-sufficiency arrives with the inauguration of Brazil's newest deep water platform, the "P50." When P50 reaches its full output later this year, that one platform will deliver more liquid to Brazil than the country's entire ethanol program.

Brazil's self-sufficiency offers three lessons for U.S. energy policy:

-First is that ethanol, with current technology, will do little to sever our dependence on imported energy. Today's approach involves growing a crop - sugar in Brazil, corn in the United States - and then fermenting the fruits to yield fuel. Sugar plants in Brazil's climate are a lot more efficient at converting sunlight to biomass than is corn in the Midwest, but U.S. policy nonetheless favors corn (and imposes tariffs on imported sugar) because the program is really a scheme to deliver heartland votes rather than a commercially viable fuel.

Yet, even with Brazil's favorable climate and sugar's inviting biology, ethanol is already reaching the limit. That's because the land and other resources devoted to ethanol can be put to other uses such as growing food and cash crops.

Indeed, today the Brazilian government is actually reducing the share of ethanol that must be blended into gasoline because sugar growers prefer to make even more money by selling their product as sugar on the world market rather than fermenting it into alcohol.

New technologies - notably "cellulosic biomass"- could breathe fresh life into ethanol and replace still more oil. Cellulosic biomass is intriguing because it cuts costs by allowing the entire plant - the cellulose in the stalks, as well as the prized grain or sugar - to be fermented into fuel.

Advocates for this technology, including President Bush in his State of the Union address, have wrongly confused the sexy promise of this new-fangled approach to making ethanol with the practical realities of fuel markets. Schemes to produce cellulosic biomass, today, work only under special circumstances and nobody has delivered the fuel at the industrial scale that would be required for the technology to become commercially viable.

-Second, we should learn that, for now, the greatest force to loosen the world's oil markets lies with oil itself. We can use oil more efficiently, as would occur with a gasoline tax or wise fuel economy standards. But we can also find ways to produce more of the stuff - as Brazil did with Petrobras.

The problem for U.S. policy-makers is that the richest veins for new production lie mainly outside the United States and beyond our direct control.

Indeed, the Brazilian government made Petrobras more efficient by putting the firm partly beyond its control as well. When the government sold part of the company on international stock exchanges, it accepted Western accounting procedures and other strictures that have given Petrobras the autonomy and accountability to its shareholders that, in turn, helped make it an efficient company.

We have a stake in seeing other countries do the same - from Algeria to Mexico to Iran and even Russia. But we must remember that Brazil did this on its own, in response to internal pressures for reform, with little leverage from foreign governments.

-Third, we should learn from Brazil not to confuse the goal of greater self-sufficiency with the illusion of independence. Even as Brazil has become self-sufficient it has also, ironically, become more dependent on world markets. That's because the Brazilian government has wisely relaxed price controls so that the prices of fuels within the country are set to the world market. Thus Brazilians see real world prices when they fill up at the pump, and the decisions about which cars to buy and how much to drive reflect real costs and benefits of the fuel they consume. That is why, even as the country becomes self-sufficient, Brazilians are working ever harder to be more frugal with oil - because the price at the pump is high and rising.

Dependence on oil is a liability that must be managed. But it is not an addiction.

Efficiency, sober policies toward modest alternatives such as ethanol, and more production - all tools of the manager, not the addict - are required. Brazil helps show the way, but only if we learn the right lessons.

The BP Foundation has awarded a five-year, $7.5 million grant to Stanford University's Program on Energy and Sustainable Development to support research on modern energy markets. The foundation is funded by BP, one of the world's largest energy companies.

The gift follows the BP Foundation's initial grant of $1.8 million over three years, which was pledged in 2004 in support of the program.

"BP's support has allowed our program to study the world's most pressing energy problems, such as global warming, energy poverty and the prospects for the world oil market," said program director and Stanford law Professor David G. Victor. "In addition to BP Foundation support, we learn from BP's experience as an energy company because they operate in all the markets where we do research--such as in China and India."

"BP Foundation believes the work undertaken at Stanford deals directly with global issues that are key to meeting the world's growing energy needs," said Steve Elbert, chairman of the BP Foundation. "The drive to research and implement strategies to further understand today's energy markets is important work, and we are proud to partner again with Stanford."

The Program on Energy and Sustainable Development, part of the Freeman Spogli Institute for International Studies, concentrates on the legal, political and institutional dimensions of how societies derive value from energy. The BP Foundation grant is part of a rapid expansion of Stanford's research and teaching on energy issues, much of which focuses on the technical aspects of energy systems.

All of the program's research is public and published openly, including on its website. The gift from the BP Foundation, as well as all similar gifts to support the program's research, includes special provisions that assure the research program's independence in setting its research agenda.

The agreement with Stanford is one in a series of BP partnerships with universities in the United Kingdom, the United States and China, representing a total commitment of more than $600 million. The program at Stanford complements work on similar topics at Princeton University, Tsinghua University and Imperial College, among others.

Founded in 2001, the Program on Energy and Sustainable Development focuses on the "political economy" of modern energy services--the interaction of political, institutional and economic forces that often dominate energy markets. It collaborates with the Stanford Law School and other university departments and schools, including economics, engineering and earth sciences. About half of the program's resources are devoted to research partnerships in key developing countries, including Brazil, China, India, Mexico and South Africa. Program researchers have examined the emergence of a global business in natural gas, reforms of electric power markets and the supply of modern energy services to low-income rural households in developing countries.

The program's other major sponsor is the Electric Power Research Institute in Palo Alto, Calif., a research consortium that includes most of the world's largest electric companies.

The BP Foundation has awarded a five-year, $7.5 million grant to Stanford University's Program on Energy and Sustainable Development to support research on modern energy markets. The foundation is funded by BP, one of the world's largest energy companies.

The gift follows the BP Foundation's initial grant of $1.8 million over three years, which was pledged in 2004 in support of the program.

"BP's support has allowed our program to study the world's most pressing energy problems, such as global warming, energy poverty and the prospects for the world oil market," said program director and Stanford law Professor David G. Victor. "In addition to BP Foundation support, we learn from BP's experience as an energy company because they operate in all the markets where we do research--such as in China and India."

"BP Foundation believes the work undertaken at Stanford deals directly with global issues that are key to meeting the world's growing energy needs," said Steve Elbert, chairman of the BP Foundation. "The drive to research and implement strategies to further understand today's energy markets is important work, and we are proud to partner again with Stanford."

The Program on Energy and Sustainable Development, part of the Freeman Spogli Institute for International Studies, concentrates on the legal, political and institutional dimensions of how societies derive value from energy. The BP Foundation grant is part of a rapid expansion of Stanford's research and teaching on energy issues, much of which focuses on the technical aspects of energy systems.

All of the program's research is public and published openly, including on its website (http://pesd.stanford.edu/). The gift from the BP Foundation, as well as all similar gifts to support the program's research, includes special provisions that assure the research program's independence in setting its research agenda.

The agreement with Stanford is one in a series of BP partnerships with universities in the United Kingdom, the United States and China, representing a total commitment of more than $600 million. The program at Stanford complements work on similar topics at Princeton University, Tsinghua University and Imperial College, among others.

Founded in 2001, the Program on Energy and Sustainable Development focuses on the "political economy" of modern energy services--the interaction of political, institutional and economic forces that often dominate energy markets. It collaborates with the Stanford Law School and other university departments and schools, including economics, engineering and earth sciences. About half of the program's resources are devoted to research partnerships in key developing countries, including Brazil, China, India, Mexico and South Africa. Program researchers have examined the emergence of a global business in natural gas, reforms of electric power markets and the supply of modern energy services to low-income rural households in developing countries.

The program's other major sponsor is the Electric Power Research Institute in Palo Alto, Calif., a research consortium that includes most of the world's largest electric companies.

Political science Professor Michael McFaul gave the Class Day lecture Saturday in Maples Pavilion.

If Stanford is indeed a bubble, political science Professor Michael McFaul deftly pointed out its radiant lining while simultaneously bursting it with a needle--in the form of sobering statistics and descriptions that paint a dour portrait of America's international standing--during his Class Day lecture on Saturday in Maples Pavilion.

Sponsored by the Stanford Alumni Association, the Class Day tradition gathers graduates and their families before a distinguished faculty member for a keynote address that is at once congratulatory and weighty. But McFaul, the Peter and Helen Bing Senior Fellow at the Hoover Institution, began by describing his humble roots as a boy from Montana.

"When I came to Stanford as a 17-year-old freshman, I was raw and not ready for prime time," McFaul admitted. "I had never lived anywhere but Montana. I hadn't even set foot in California, let alone a foreign country."

In 1986, McFaul said he emerged from the Farm a dramatically different person--holding a bachelor's degree in international relations and Slavic languages and literatures, as well as a master's in Russian and East European studies. He had lived in the Soviet Union, Nigeria and Poland; and today, McFaul is regarded as one of the top scholars in terms of bringing together the theory and practice of democracy.

"I came here wanting to practice law and left here wanting to practice diplomacy," said McFaul, who in 2005 was appointed director of the Center for Democracy, Development and the Rule of Law at the Freeman Spogli Institute for International Studies. "So, my time in the bubble changed me."

Then McFaul brought out the needle. He noted that, just as this year's graduates were first arriving on the Farm, President George W. Bush was outlining his "freedom agenda," a plan to transform the world. McFaul said the plan outlined Bush's strategy for promoting democracy around the world as a way of keeping Americans safe.

But so far, McFaul lamented, few of the plan's goals have been realized. "It hasn't been pretty out there," McFaul said. "While you have been living inside the bubble, a lot has been happening--much of it bad--outside of the bubble."

McFaul then reminded graduates of positive developments, such as the Rose Revolution in Georgia in 2003 and the Orange Revolution in Ukraine in 2004. And, no one, he added, misses the Taliban regime in Afghanistan or Saddam Hussein in Iraq.

"But overall, trends are disappointing," McFaul said. "In Afghanistan, democracy is barely holding on. In Iraq and Palestine, there's civil war."

Between 2003, when the departing undergraduates in the audience arrived as freshmen, and today, more than 3,000 American soldiers, roughly 60,000 Iraqis and more than 200,000 people in Darfur have died, McFaul said. He added that the number of al-Qaida's followers also has grown during the four years that the Class of 2007 was in "the bubble."

And yet, the graduates might have left Maples completely deflated were it not for the main message of McFaul's lecture, which was one of renewal. When he graduated from Stanford in 1986, McFaul gave a graduation speech at the ceremony for international relations majors in which he lamented the failing arms control treaty between the Soviet Union and the United States. He also expressed dismay that South Africa's apartheid regime had just declared emergency rule and that Washington seemed too confrontational or too indifferent to address either.

"However, after each of these periods, the United States had found a way to renew itself and become again a force for freedom and justice around the world," McFaul said. "So, my understanding of history gives me confidence in our capacity for renewal. But so does my sense of the future that comes from teaching here at Stanford University."

McFaul said he has taught enough of this year's graduates to know that they have the smarts, the drive and the convictions to turn things around--young men and women from throughout the United States but also from nations such as Afghanistan, Brazil, Egypt, India, Indonesia and Nigeria.

"Someone sitting here right now will someday open the first U.S. Embassy in a democratic Iran," McFaul said. "Someone sitting here right now will inspire a third grader in the South Bronx to become the first kid in his neighborhood to win a Nobel Prize in physics."

But in the effort to renew the world, McFaul also told the graduates they should not forget to renew themselves. He urged them not to describe whatever occupation they take up simply as a job title, but as an action verb; to occasionally welcome idle time to refocus their energies; to embrace uncertainty; and to continue to learn and stay connected to Stanford.

McFaul's parting message echoed the welcome address by Howard Wolf, '80, vice president for alumni affairs and president of the Stanford Alumni Association. "Alumni are the only permanent stakeholders" of the university, Wolf said. "Get involved, stay connected."