Farm Bureau Joins in Anti-Ethanol Alert

August 1, 2001

The American Farm Bureau Federation is urging the House to reject an effort to waive the oxygenate standard in reformulated gasoline for California. During House consideration of comprehensive energy legislation this week, an amendment is expected to be offered that would require the Environmental Protection Agency to waive the oxygenate content requirement for the state of California. The National Corn Growers Association earlier urged the same action by the House.

Two weeks ago, a similar amendment was defeated in the House Energy and Commerce Committee. In mid-June, the Bush administration rejected California's request for a waiver. "If this amendment is offered and is successful, it would have a serious and negative impact on air quality and on the ethanol industry," said American Farm Bureau Federation President Bob Stallman. "The Energy and Commerce Committee and the Bush administration got it right the first time."

Reps. Christopher Cox (R-CA) and Henry Waxman (D-CA) led the push for the waiver during committee consideration of the energy bill. The two congressmen contend there may not be enough ethanol to satisfy the demand for oxygenates in states such as California. They also contend that a lack of sufficient transportation would make it difficult to ship ethanol economically.

"There is no basis for either argument," said Stallman. The California Energy Commission just completed a comprehensive survey of the U.S. ethanol industry and concluded there will be 2 billion gallons of new ethanol production capacity on line by 2003. That would be more than enough to meet the 580 million gallons of demand created in California and the 800 million gallons of potential demand in the northeast.

Transportation issues are being addressed and large volumes of ethanol -- between 10 million and 12 million gallons per month -- are already being shipped to California by rail or water. The transportation infrastructure of shipping ethanol from Gulf Coast ports to California is exactly the same as that being used for other gasoline-blending components.

The American Waterways Operators indicate they will not have a problem handling the increased demand for ethanol. Stallman said: "The proposed amendment is flawed. If one state gets a waiver while others don't, the federal reformulated gasoline program will become even more segmented. That would further complicate gasoline production and distribution systems, limiting supply and increasing consumer costs."