FOR IMMEDIATE RELEASE JUNE 13, 2001 Contact: David Morris, Institute for Local Self-Reliance [EMAIL PROTECTED] 612-379-3815 http://www.ilsr.org/
Rejection of Oxygenate Waiver Should Encourage California to Become a Major Transportation Fuel Producer President George W. Bush's denial of California's request for a waiver from the federal fuel oxygenate requirement is unleashing a wave of outrage and bitterness in that state. The anger is compounded by the President's refusal to provide California with any short term relief from high electricity prices. And it is fueled by the fact that Archer Daniels Midland (ADM), the giant ethanol producer, has generously lavished contributions on political parties and stands to gain the most from the dramatically expanded market for ethanol. "The anger is justified", says David Morris, Vice President of the Minneapolis based Institute for Local Self-Reliance. "But the good news is that California can become self-sufficient in ethanol production. Indeed, in the long run, the President's decision may well spur California to develop a homegrown transportation fuel industry based on its well-known leadership in the biotechnology and bioengineering fields." California has sufficient corn acreage to supply 50-100 million of the 500-700 million gallons of ethanol it will need to completely replace MTBE. It has significant quantities of fruit wastes that can produce 100 million or more additional gallons. It has organic wastes like tree trimmings, yard waste, rice straw, and other cellulosic resources that could allow it to produce another 400-600 million gallons a year. "Five years from now there could be one or two biorefineries in every California county, producing not only ethanol but higher value biochemicals", says Morris, who coined the term "carbohydrate economy" in the early 1980s to describe an economy that relies on plants rather than fossil fuels as its industrial building blocks. Morris is the author of several books on ethanol and biorefineries, and currently serves on a congressionally mandated council that advises the U.S. Departments of Energy and Agriculture on energy and agricultural policies. Morris points to his home state of Minnesota, where 10 percent of all transportation fuel is produced in-state from agricultural crops. There are 14 biorefineries in Minnesota, and 10 of them are owned by farmers themselves. "As a result a significant amount of the money spent at the pump in Minneapolis stays in the state and benefits rural and farming communities directly", notes Morris. California would use different raw materials for making ethanol, but could have the same large number of production facilities and the same beneficial impact to an agricultural and rural sector that has been in recession for several years. The Institute for Local Self-Reliance is a 27-year-old nonprofit research and educational organization supporting environmentally and economically sound local communities. For more information visit ILSR's Carbohydrate Economy web site at http://www.carbohydrateeconomy.org/ or ILSR's home page at http://www.ilsr.org/ -- John Bailey Institute for Local Self-Reliance 1313 Fifth St. SE Minneapolis, MN 55414 E-mail: [EMAIL PROTECTED] ILSR's Home: http://www.ilsr.org/ Sustainable MN: http://www.me3.org/ New Rules Project: http://www.newrules.org/ Carbohydrate Economy: http://www.carbohydrateeconomy.org/ ********************** The Oil Industry is Creating Gasoline Supply Problems - Ethanol is the Answer By Trevor Guthmiller, Executive Director, American Coalition for Ethanol For the second year in a row we are having to deal with exceedingly high gas prices, especially in the Midwest reformulated gasoline markets where ethanol is used. The oil industry, in typical fashion, is trying to act surprised and is trying to shift the blame to: 1) the government for requiring "boutique" fuels due to the "balkanization" of the fuel marketplace; and 2) ethanol because, in their words, it is so hard to transport and use. What they don't want to talk about is their industry's support for some of the boutique fuel requirements around the country. For instance, they supported the efforts of some government entities to adopt low-Reid Vapor Pressure (RVP) fuel requirements instead of reformulated gasoline requirements that would require the fuel be oxygenated, and heaven forbid, they have to use more ethanol. More interestingly, the oil industry doesn't seem to want to talk about what appears to be a deliberate effort to decrease production of reformulated gasoline, especially in the Midwest where it is blended with ethanol. This allows them to drive up the price and to then shift the blame to ethanol. In 1999, 358,000 barrels per day of reformulated gasoline (RFG) was produced in the Midwest (PADD 2). In 2000, that number dropped to 300,000 barrels per day and gas prices went through the roof, and the oil industry raked in record profits while successfully shifting the blame to the government's clean air requirements and ethanol. Feeling smug and rich, the oil industry has apparently decided that last year's efforts to reduce supply weren't quite enough and so far in 2001, production of reformulated gasoline in the Midwest has plummeted to only 247,000 barrels per day, a whopping 31percent reduction in RFG production in two years. All this while total gasoline production in the Midwest has actually been increasing. In 1999, 1,842,000 barrels per day of gasoline were produced in PADD 2. So far in 2001, that number has risen to 1,988,000 barrels per day. An oil industry skeptic might wonder about their poor planning, especially after last year's experience. A more cynical person would wonder if this is not just part of their plan to manipulate the marketplace in order to further their financial and political goals. The answer to our energy situation, which affects all segments of our economy, is greater production and use of renewable fuels like ethanol and biodiesel. Increasing production of ethanol and biodiesel will act as a wedge in the fuel marketplace, filling in the petroleum industry's production gaps and moderating the escalating prices for fossil fuels. The best way to accomplish this is to create a Renewable Fuels Standard that the oil industry is required to comply with. The American Coalition for Ethanol (www.ethanol.org) favors the establishment of a Renewable Fuels Standard that calls for an increasing amount of ethanol and biodiesel use every year, as a way of providing a tangible and measurable way of reducing our dependence on fossil fuels. Such a mechanism would take our energy policy, at least in one small way, out of the hands of the oil companies and put it back into the public policy arena where it belongs. Oil and petroleum companies have to watch out for company performance, stockholder returns and other business concerns, while public policy needs to balance bigger and broader concerns, such as our national economic and energy security needs. Having a renewable fuels requirement with credit trading would be a fair and equitable way to create a meaningful reduction in our fossil fuel use, while at the same time allowing the various petroleum companies to have a level playing field on which to operate. The American Coalition for Ethanol is a strong supporter of the Renewable Fuels Act of 2001 (S. 670), a bipartisan bill introduced by Senators Tom Daschle (D-SD) and Richard Lugar (R-IN), that would establish a Renewable Fuels Standard for our nation's gasoline. Establishing a renewable fuels requirement would also provide the market certainty in a very chaotic energy marketplace that is needed to give investors the assurance they need to invest in and build new ethanol plants. We would hope that this would allow the continued growth of farmer-owned ethanol plants, where the profits generated from the processing of the corn they grow are retained in local areas, benefiting our rural economies. >From a South Dakota farmer's perspective, things are looking bleak. >Corn prices are falling while gasoline and diesel fuel prices are >rising, squeezing their razor thin production margins even thinner. >Since 1995, the average corn price in South Dakota has fallen by 50 >percent, while just in the last year gasoline prices have risen 22 >percent and diesel fuel prices have risen 9.4 percent. That is >above and beyond last year's already high prices. One of the few bright spots South Dakota and other low corn price areas have is ethanol. Properly structured ethanol projects that farmers can invest in will be a hedge for farmers against low corn prices and high energy costs. In times like these, investments in ethanol processing will provide farmers with some income from the processing of the corn that they grow. At the same time, by building more ethanol plants, they are creating a growing demand for their corn, which will hopefully stabilize and increase the value of the corn they grow. Farmers in Minnesota are now reaping the rewards of their investments in the ethanol industry during the past decade. Farmers in other states are now looking to emulate their success. This progress will only continue if we continue to advocate positive public policy that addresses the broader goals of our nation instead of those that only serve the interests of a few large corporations that are more concerned with their business operation than what is good public policy. Supporting ethanol and supporting a Renewable Fuels Standard meets that broad public policy test. Unlike the oil industry would have you believe, ethanol is not the problem. It is the answer. The American Coalition for Ethanol is a non-profit membership organization with the mission of promoting the increased production and use of ethanol. ACE's membership includes commodity organizations, rural electric cooperatives, ethanol producers, grain cooperatives, businesses and individuals. _______________________________________________________________________ Powered by List Builder To unsubscribe follow the link: http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=360&subid= B952DB0AA216B908&msgnum=56 Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Please do NOT send "unsubscribe" messages to the list address. To unsubscribe, send an email to: [EMAIL PROTECTED] Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
