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Posted on  

March 6, 2001

Bush questions whether ethanol could meet demand in California

President Bush has told three Iowa congressmen that he is concerned about whether there is an adequate supply of ethanol available if he requires its use in California.

The congressmen - Republicans Greg Ganske, Tom Latham and Jim Leach - said they have told Bush that enough capacity will exist to supply California and other states with the corn-based fuel.

"We reassured him that we certainly could do that, and with any kind of a two- or three-year phase-in, that we could supply that need," Latham said.

Ganske, Latham and Leach traveled with Bush Wednesday to the Midwest aboard Air Force One, giving the congressmen a two-hour window to lobby Bush on ethanol.

The issue is considered immensely important to many Iowa farmers, rural communities and investors in ethanol plants.

Bush did not tell the congressmen whether he will require that California use ethanol to help meet federal clean-air standards. The state has requested a waiver from those rules, maintaining cars have improved enough to no longer require the use of a fuel additive.

The state currently uses MTBE, a petroleum-based additive designed to make fuel burn more cleanly. However, MTBE has fouled ground and surface water in California.

Bush told the Iowa congressmen he would discuss the waiver with the head of the Environmental Protection Agency, Christine Todd Whitman, Latham said.

Ganske said the president "seemed favorably inclined" to keeping the requirement in place. Leach described Bush as open-minded.

Bush's decision could open a huge market for corn producers and increase the price of corn in the Midwest, ethanol supporters say.

California officials have raised concerns about getting an adequate supply of the corn-based fuel if the waiver is denied. Supply problems with ethanol were partly blamed for the spike in fuel prices in the Chicago area last summer.

Monte Shaw, spokesman for the Renewable Fuels Association in Washington, said producers can keep up.

"If people want to know if the ethanol industry can do that, our answer is we are absolutely committed," Shaw said. "We are expanding at a record pace, and we are producing at a record pace."

Producers and investors in ethanol plants are eager to see whether Bush will allow the California waiver.

"If the Bush administration denies the waiver outright, you would see financing for those new plants crystallize overnight," Shaw said.

The president gave no indication when the decision might come, but Latham said he thinks it will happen in the near future.


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