Two stories have plagued news coverage this summer: the California energy crisis and a slumping American economy. Ironically, now that a small sign of relief exists in the form of ethanol, California and ethanol producers can’t see eye to eye. Instead of boosting income inside American borders by buying ethanol from Midwest sources, California is looking to Brazil to supply its need for the fuel. Transportation problems are to blame for preventing Midwestern fuel from reaching the West Coast, and this matter must be solved in order to tap American-produced ethanol.
A non-ethanol oxygenate has been found to contaminate ground water and has been banned in California, leaving the state dependent on ethanol fuel sources. California has been pushing for a lift on the ban, but Midwestern corn interests have steadily been fighting to keep it in place. American corn growers could see all of their lobbying and promotional work go down the drain because of Brazilian sugarcane, an equally viable source of ethanol more accessible to California than Midwestern corn.
Brazil can only supply approximately 200 million gallons – roughly a third of the demand – while domestic suppliers already produce two billion gallons per year and 12 more production facilities are under construction. If ethanol is truly to become a major fuel source, it has the potential to bolster the United States’ economy by increasing revenue to domestic producers. According to the American Coalition for Ethanol, domestic ethanol production adds $6 billion to the U.S. economy each year. Each new plant can create 2,250 new local jobs to help rural economies.
Although there are currently 56 ethanol production facilities in the United States, domestic ethanol can be as expensive as foreign counterparts. This is partly due to the long and costly transportation route in place for shipping domestic fuel by sea. The ethanol travels down the Mississippi River, through the Panama Canal and back north to the West Coast. Also, shipments are required to use high-cost U.S. flagship vessels, while Brazil can avoid tariffs by refining the ethanol in the Caribbean and shipping on lower-cost foreign flagships.
Fortunately, some domestic fuel is currently shipped directly across the country via train, the most inexpensive and simple option. Yet California politicians are worried that dreaded Midwestern winters will halt train transport and stall the barges. This is where the federal government needs to step in; it should work with rail companies to boost shipping capabilities in the summer and help clear the tracks in January in the name of commerce. Ethanol is a clean and plentiful solution to California’s energy woes and it is senseless and harmful to the U.S. economy to seek foreign fuel when it is available within our own borders.
