Study Affirms Ethanol's Ability to Meet California Oxygenate Demand; Competitors' Claims Regarding Supply/Logistics Shortfalls Unfounded
Media release
Copyright 1999 PR Newswire
February 17, 1999
Adequate supplies of competitivelypriced ethanol could be
supplied to the California market almost immediately,according to
a new analysis completed by Downstream Alternatives, Inc.
Thestudy,
"The Use of Ethanol in California Clean Burning Gasoline:
EthanolSupply/Demand and Logistics," demonstrates that ethanol
supply in the
U.S. ismore than adequate to meet California's oxygenate demand.
The analysis was requested by the Renewable Fuels
Association to assessthe viability of ethanol as a replacement
oxygenate should regulatory ormarketplace barriers ever eliminate
the use of
MTBE in the California market.
"The reluctance to use ethanol in California appears
to be founded
in themisunderstanding that there is insufficient ethanol to
satisfy the necessarydemand for oxygenates in the state's Clean
Burning Gasoline program," saidEric Vaughn, President of the
Renewable Fuels Association.
"That is simplynot true. As demonstrated by this study, the
capacity for ethanol productionis more than double the amount
needed to meet California's demand, and ethanolcould be made
available to the state almost immediately. Clearly, ethanol isa
viable alternative to
MTBE in California."
Key findings of the report include:
* Under a high demand scenario (including some ethanol used
in non-required areas), approximately 628,000,000 gallons of
ethanol would be neededto meet oxygenate demand in California.
* With new plants on line, ethanol production capacity for
1999 will reach1,838,800,000 gallons. Actual production for 1998
was approximately1,394,400,000 gallons. With production from CBI
countries, total ethanolavailability for California exceeds
494,400,000 gallons without impactingexisting ethanol markets. The
remaining demand for ethanol would be met byredirecting
product from lower-valued octane markets in Midwestern states.
* Product would be delivered by a combination of marine
cargo and rail shipments. Transit time would run from 2 weeks to
3 weeks by rail and approximately 34 days by water.
* Of the terminals providing definitive answers,
32 (62.75%) indicated they could offer ethanol storage in six
months or less. However, this too may understate the ability to
distribute ethanol because it is generally the larger, high volume
terminals which indicated they either have ethanol distribution
capabilities or could have in a short time frame.
* It is not necessary to have ethanol
in all gasoline terminals to achieve 100% market penetration.
"A market for ethanol in California will also
stimulate the construction of new ethanol production facilities in
the state," said Vaughn.
"These plants will process agricultural waste products such as
rice straw, helping to alleviate
environmental concerns posed by open field burning while providing
new jobs and economic stimulus in California."
Ethanol is rapidly biodegraded in surface water,
groundwater and soil, and is not obnoxious to taste or smell at the
part-per-billion level.
"California should not have to choose
between clean air and clean water. That choice need not be made
with ethanol," said Vaughn.
"Greater use of ethanol in California's clean fuels program
will ensure that the significant air quality benefits afforded by
the use of oxygenates are not forfeited."
Copies of the Executive Summary and the
study may be obtained from the RFA, 202-289-3835.
SOURCE: Renewable Fuels Association
CONTACT: Mary Wertschnig of RFA, 202-289-3835
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