Senators Tom Harkin (D-IA) and Richard Lugar (R-IN) have introduced legislation that would direct the U.S. Department of Energy to study the feasibility of transporting ethanol by pipeline from the Midwest to the East and West coasts.

The Ethanol Infrastructure Expansion Act of 2007 would look at creating a dedicated pipeline system could enable ethanol producers to deliver their products to states with a growing demand, like California, New York, and Pennsylvania, at a lower cost.

“We must explore every option for reducing our dependence on foreign oil. Overcoming problems in moving ethanol through pipelines, as Brazil has done, is important in developing the full promise of America’s renewable fuels. This legislation will help determine U.S. infrastructure planning and development,” Lugar said in a press release.

Meanwhile, Dow Jones reports that Brazil’s state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, is planning to start building an ethanol pipeline from central Brazil to the coast this year.

Chief Executive Sergio Gabrielli said, “The pipeline will serve mainly to transport ethanol for export to Japan.”

Petrobras, Japanese company Mitsui & Co. (MITSY) and the Brazilian builder Camargo Correa in late February had signed a memorandum of understanding to study the construction of an ethanol pipeline network in Brazil.

The pipelines would link ethanol producing areas in Brazil’s central state of Goias via main producing areas in Sao Paulo state to the port of Sao Sebastiao on the Atlantic Ocean.