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NCGA
to California: Ethanol supplies and transportation can meet driver's
needs
(7-12-01)
Consumers in California
and across the nation can breathe a little easier now that abundant,
economically priced, environmentally friendly, renewable ethanol is
available to meet motorists' needs. However, some California officials
have their facts wrong about ethanol.
"California
officials seem to be manufacturing so-called facts about ethanol availability,
transportation and pricing," said John McClelland, NCGA director
of energy and analysis.
A story in the July 12th Wall Street Journal cited concerns by some
California officials that ethanol supplies would be tight. The story
also questioned transportation costs and claimed that the EPA ruling
denying California's request for a waiver to the oxygen requirement
of the Clean Air Act will drive up the cost of gasoline for California
drivers.
"Ethanol is only three cents per gallon higher in Los Angeles than
it is in Omaha," noted McClelland, who holds a PhD in economics.
He cited prices of ethanol at distribution terminals listed in the July
9 edition of the Oxyfuel News. Those numbers showed ethanol at $1.39
in Omaha and $1.42 in Los Angeles.
As for availability, McClelland said there is plenty of ethanol available.
He noted that of the 2 billion gallons of ethanol produced in the United
States, only 600 million gallons have been used in the cities and areas
of the country requiring RFG gasoline. "That means the remaining
1.4 billion gallons is being used in the normal gasoline markets, not
because of Clean Air Standards, but because it is economical,"
he said.
Furthermore, McClelland
notes that ethanol provides twice the oxygen of MTBE. Replying to claims
of potential transportation problems with ethanol, McClelland noted
that MTBE, the oxygenate made from petroleum, must be shipped to California
the same way ethanol will be shipped: by truck, rail or barge. "There
is no dedicated pipeline for gasoline, MTBE or ethanol from anywhere
to California," he emphasized. "And, frequently the transportation
costs of a product are not passed on.
"Filings required
by California state laws indicate that nearly every refinery in Southern
California is ready to use ethanol. There's going to be plenty of storage
available at the fuel terminals in tanks that once held MTBE,"
said McClelland.
Last
reviewed July 12, 2001
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