Notably absent from the House legislation was an attempted amendment that would have released California from the requirement to use oxygenated fuels. The requirement, combined with California's ban on the petroleum-based oxygenate, MTBE, has been a boon to ethanol producers and Midwestern corn growers.
According to the Renewable Fuels Association, an ethanol promotion group, almost 300 million bushels of corn will be required to meet the demand for California alone. The redirection of that portion of the crop from feed to fuel would potentially add 5 cents to the price of a bushel of corn.
Illinois and Iowa, which grow 50% of the nations corn crop, also produce the bulk of the ethanol fermented in the United States.
In Iowa, there are already seven plants producing almost 500 million gallons annually. Currently, there are plans for 9 more refineries that will ferment an additional 250 million gallons when they are up and running.
Illinois has only four plants but they account for almost half of the current 2 billion-gallon annual output.
With demand predicted to rise, the RFA forecasts the annual production of ethanol in the U.S. will reach 3.5 billion gallons by 2003.
The potential of ethanol has not been lost on the California farm community. Currently, Imperial Valley farmers are being recruited to plant sugar cane and sorghum for a proposed ethanol plant scheduled to open in 2003.
Sugar cane takes two years to mature, so the ethanol plant's developer, Louisiana based Arkel sugar inc. is recruiting California farmers now. When completed the plant would produce 100 million gallons of ethanol annually and 50 megawatts of electrical energy.