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July 29, 2003
Ag marketers hear a pitch for ethanol
By Luis Hernandez
TULARE -- Government, farmers and environmental groups should come together to support the growing ethanol industry in California, former California Secretary of State Bill Jones says.
Ethanol, a gasoline additive produced from corn, can create a market for local farmers and can help reduce carbon dioxide pollutants.
"We are just giving away an opportunity," Jones said. "It's a product that can be produced here."
Jones was the keynote speaker at the National Agri-Marketing Association's conference last week at the Heritage Complex.
Jones and a group of investors recently formed Pacific Ethanol Inc., and they are looking for financing to build two ethanol plants -- one in Visalia, near highways 99 and 198, and another in Madera. Jones said plans call for the Madera plant, a $50 million project, to be in operation by the fall of 2004.
An ethanol plant could have a huge effect on the local economy. Jones said it would expand the economy by $110 million, bring in a $140 million one-time economic boost and create $1.2 million in tax revenue.
Because ethanol can't be transported by pipes, jobs in the transportation industry would also be created.
Ethanol is mostly produced in the Midwest. California only has two facilities that produce an estimated 8 million gallons a year.
"The state needs 613 million gallons of ethanol this year and 1 billion gallons next year," said Rob Schlichting, a California Energy Commission spokesman.
With low local production and high current and projected demand, California consumers can be vulnerable to high prices when supplies run low. Jones likened the ethanol supply-and-demand scenario to the energy crisis that hit California a few years ago.
"It would be irresponsible not to take this problem head on," he said.
The high demand for ethanol stems from a bill recently passed in the California Legislature that calls for the maximum reduction of carbon dioxide emission from light-duty engines.
One way to reduce the pollutants is to replace methyl tertiary butyl ether with ethanol in gasoline. MTBE is being phased out because it pollutes water supplies.
"In fact, we know it's feasible to blend over 1.5 million gallons of ethanol a year into California's gasoline stream and reduce close to 5 million tons of [carbon dioxide] per year," Jones said.
Producing the ethanol could also prove beneficial for dairy farmers. Ethanol is produced by heating up corn and getting alcohol that is then turned into ethanol.
The byproduct, because of its high vitamin and fat content, can be fed to dairy cows.
"It's a win-win situation," Jones said.
Matt Schmitt, a Cowgreen representative, agreed with Jones.
"[Ethanol production] benefits both the fuel and dairy industry," Schmitt said.
Cowgreen, a company based in Southern California, is also looking to build an ethanol plant, or biorefinery, in Pixley.
Schmitt said Cowgreen's plant would need 85,000 acres of corn grown and the byproduct produced at the plant would feed 130,000 cows every day.
Cowgreen's plant is scheduled to be in operation early next year, Schmitt said.
Tulare County Agricultural Commissioner Gary Kunkle said local growers could supply what Cowgreen's plant would need.
At the moment, local farmers grow $70 million worth of silage corn and $1.5 million of grain corn, Kunkel said.
Silage corn, the seventh largest crop in the county last year, is grown specifically to feed dairy cows.
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