NOT
ALL CALIFORNIA PRODUCE CREATED EQUAL,
ETHANOL STUDY SAYS
Conversion of California Produce and Dairy
Waste limited by Cheap Midwestern Corn
MODESTO (May
5, 2004) – Henry Ford thought
it was good enough to power his first
Model T. Alexander Graham Bell called
it the "fuel of the future."
And many believe its use as an air friendly
fuel additive could prove an economic
boon for California farmers.
But absent policy changes, profitable
conversion of California agricultural
products into ethanol is limited by cheap
Midwestern corn, government policies and
competing uses, according to a new study.
The report, “Ethanol in California:
A Feasibility Framework,” released
today by the Great Valley Center analyzes
what it would take to develop a local
ethanol supply based on food processing
waste from California's multi-billion
dollar agricultural industry. Ethanol
is a form of alcohol made from plants
that can be added to gasoline to reduce
air polluting exhaust gases.
Almost all ethanol in the United States
is produced from in corn in Midwestern
states such as Illinois, Nebraska and
Iowa. Yet because Midwestern ethanol is
sent to California by rail or truck and
then added to California gasoline, many
believe there is a potential for local
producers to benefit from being closer
to the pump.
However, researchers examining 12 California
commodities - such as oranges and grapes
- found that even with transportation
savings factored in, 11 of the 12 agricultural
products considered would draw a higher
price for alternative uses -- eliminating
the $0.02 to 0.05 per gallon advantage
over Midwest producers. Only sorghum would
be cost-effective and very little of it
is currently grown in state. "Making
ethanol profitable in California depends
on a lot of things," said Dr. Ellen
Burns, one of the study's authors, "The
potential effect of government policies,
out-of-state competition and new technology,
among others, should not be underestimated."
California consumes 11% of the nation's
gasoline and could consume up to 29% of
the ethanol capacity. California has only
.28% of the United States ethanol capacity.
"This report was intended as a first
step for those interested in exploring
the potential of ethanol in California,"
said Paul Venosdel, State Director, USDA
Rural Development which funded the study.
The Great Valley Center is a private,
non-profit organization that supports
organizations and activities working to
improve the economic, social and environmental
well-being of California’s Great
Central Valley. Full copies of the report
are available at www.greatvalley.org or
by contacting the Center at (209) 522-5103.
###
Media Contact:
Richard Cummings
(209) 522-5103
