Ethanol Crunch May Awaken Dormant Plant

Published online: Jun 22, 2001
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Following the Bush administration's move to force California to keep oxygenates in gasoline, a Palo Alto, CA, technology company is looking to buy the former Spreckels Sugar plant near Woodland, CA, and convert it into an ethanol factory.

Waste Energy Integrated Systems is working to raise about $70 million to buy and retrofit the plant but has not made an offer yet. The company has proposed that Yolo County farmers contribute and become partial owners.

The federal government requires about 75 percent of California gas to contain oxygenates, such as ethanol or MTBE. MTBE is the most widely used but has been found to contaminate groundwater supplies. In fact, Gov. Gray Davis has ordered MTBE to be phased out by December of 2002. Ethanol remains the most viable alternative.

Today, only two ethanol producers exist in California producing about 4 million gallons annually. Refiners in the state are expected to use more than 700 million gallons of ethanol by 2003.