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Energy Dept worries about getting ethanol to Calif June 21, 2001


By Patrick Connole

WASHINGTON, (Reuters) - A senior Energy Department official Thursday told Senate lawmakers he was concerned about California being able to get enough ethanol to market to avoid gasoline supply shortages when the state is forced to start mixing the corn-based fuel into its gasoline in 2003.

Energy Under Secretary Robert Card, who appeared at a Senate Energy Committee hearing on gasoline supplies, said a large amount of infrastructure was needed to ensure ethanol produced mainly in the Midwest could flow to California.

``Our position is that the supply and demand situation is very tight, and if you take 5 to 10 percent out (of the market) suddenly, it could create a problem,'' Card said, referring to the volume percentage at which ethanol would be blended into California's gasoline.

The U.S. Environmental Protection Agency (EPA) earlier this month denied California's request for a waiver from provisions of the 1990 Clean Air Act requiring the use of additives to make cleaner-burning reformulated gasoline.

The decision means California will need about 580 million gallons of ethanol for use as an oxygen-rich additive in its reformulated gasoline (RFG) in 2003, because the state banned use of MTBE (methyl tertiary butyl ether), now the most widely used ``oxygenate'' in California's gasoline, by Dec. 31, 2002.

Card stressed that he was not saying the switch to ethanol could not be done without causing shortages, but simply noted there was a big job ahead of the state and industry.

``I don't want to presuppose it can't be done,'' Card said.

Ethanol must be shipped by rail or barge, and cannot be pumped via pipelines due to moisture build-up problems it often encounters when pumped in a pipeline.

Corn-state lawmakers enamored with the idea of pumping ethanol to California, the country's largest gasoline consuming region, said that new ethanol production would be able to meet new demand.

Republican Sen. Chuck Hagel from Nebraska said ethanol capacity was currently around 2 billion gallons a day, but would increase in the next few years to some 3.5 billion gallons a day.

``New ethanol plants are coming on line,'' Hagel said.

Separately, the New York Times reported Thursday that the Bush administration plans to urge Congress to continue federal incentives for ethanol despite the program's failure to reduce gasoline consumption.

Ethanol is typically distilled from corn and sold in a 9-to-1 blend with gasoline. The fuel has an excise tax exemption worth 5.3 cents a gallon at the pump to encourage production of the home-grown fuel.

In addition to the excise tax break, U.S. automakers receive tax credits for manufacturing so-called dual fuel vehicles that can burn either nearly pure ethanol or gasoline. The tax credits allow automakers to lower the average gas mileage of the rest of their fleets and sell more gas-guzzling sport utility vehicles, the Time said.

-- Martin Thompson (, June 21, 2001


This is going to be another really big problem. MTBE is such nasty stuff - and it's leaching into all of our ground water. I would much rather have ethanol, but California is not a corn state and we import most of what we use. Any chance we could use almond hulls or rice straw instead of corn?

The immediate effect will be to drive up the cost of gasoline, not just in CA but also in the Midwest, because we will be trucking in that stuff as fast as we can and absorbing enough of their ethanol supply to really drive up the price.

I also wonder whether the lack of the additive will cause gas shortages throughout this state. Not available at any price, because we won't have the ethanol to mix in.

-- Margaret J (, June 21, 2001.

And if memory serves me right, it takes more energy to produce ethanol than it will release. This during an energy crisis.

-- David Williams (, June 22, 2001.

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