California May Be Softening to Ethanol

The National Corn Growers Association (NCGA) late last week heard from the California Environmental Protection Agency a "softening of concerns" about ethanol in California and expression of a need for a "flexible" federal renewable fuels standard. The NCGA wrapped up its weeklong California ethanol outreach program Thursday by meeting with California EPA Secretary Winston Hickox who expressed a more positive position on ethanol in California than has been heard in recent months if at all.

All last week, a delegation from NCGA met with key California agricultural groups and state agency officials to offer help, knowledge, expertise and experience as these groups begin exploring ways to expand the ethanol industry in the state. Representing NCGA were Corn Board Chairman Lee Klein, a farmer from Battle Creek, NE; NCGA Ethanol Marketing Committee member Theresa Schmalshof, a farmer and Illinois Corn Marketing Board member from Adair, IL; NCGA Director of Energy Analysis John McClelland; and Colorado School of Mines professor and NCGA consultant Mike Graboski.

During the Thursday meeting, Hickox asked for information the state can use as it "goes into the process of reacting to the denial" by the federal EPA to California's request for a waiver to the oxygen requirement of the Clean Air Act. He said he found a recent fact-finding trip to the Midwest to be "extremely helpful" as the state works to determine the value of expanding the ethanol industry.

"I learned a lot about farmer cooperatives, and found there are things that warm my heart," Hickox said. "Some of that was the fact that these cooperatives offer farmers options, and provide competition for larger distributors. I saw how that can help in California." He said that trip also eased his concerns about transporting ethanol from the Midwest to California, adding, however, that he is concerned about the infrastructure to distribute ethanol within the state and the ability of the refining industry to meet MTBE phase-out deadlines.

In a discussion about a pending announcement about either maintaining the current Jan. 1, 2003, deadline for phasing out MTBE as an oxygenate or extending that deadline by "a short period of time," Hickox admitted he did not know which direction the governor will take. "I will say, however, that I am not going to make a recommendation to him," said Hickox, noting that his staff has compiled all of the information the governor needs to make the decision, which he called "imminent."

The basic consideration in the whole debate about ethanol and oxygen requirements in the state of California, Hickox concluded, is that all parties need to come together to develop a federal solution - a renewable fuels standard - for the entire country. "But with that solution, we need flexibility," he said.

McClelland explained that the Hagel-Johnson Bill, which the NCGA supports, provides that flexibility. In support of a national renewable fuels standard, Hickox said, "We need to reduce our dependence on foreign oil and take advantage of domestically produced, renewable fuels."