June 29, 1999

Officials of the National Corn Growers Association were in California last week to explore opportunities to expand the use of ethanol in California gasoline. California is phasing out MTBE, and corn producers believe using ethanol to replace MTBE would add a dime to the U.S. corn price.

Using ethanol or MTBE (methyl tertiary butyl ether) is required to combat smog in parts of California by the federal Clean Air Act and by California air quality regulations. But last March, Gov. Gray Davis ordered a phasing out of MTBE because it contaminated water supplies and posed "a significant risk to the environment.

NCGA economists believe that if ethanol were to replace MTBE as the primary oxygenate in California reformulated gasoline, it would mean a 400-600 million gallon market each year using 160-240 million bushels of corn. That could add another 10 cents to the national corn price.

Several NCGA officials met with state officials and farm groups in Sacramento to discuss what it would take to develop an ethanol market in California as MTBE is phased out. NCGA President-elect Lynn Jensen, Lake Preston, SD, said the environmental and health effects of MTBE have been questioned "for some time." Areas such as Chicago have used ethanol to meet oxygenate requirements with no problems similar to those involving MTBE.