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Posted on  

February 20, 2002

California Farmers Eye Sugar Cane for Ethanol

By EUGENE TONG
The Associated Press


LOS ANGELES (AP) - In the fertile fields of the Imperial Valley, within miles of the Mexican border, farmers are envisioning endless acres of sugar cane rising amid the alfalfa, lettuce and carrots already sprouting from the desert.

Since 1997, about a dozen local farmers struggling with weak crop prices have been working to introduce sugar cane on farmland about 200 miles southeast of Los Angeles. Now they believe their time has come, thanks to an expected spike in demand for ethanol, a gasoline additive that can be refined from sugar cane.

Ethanol is the only practical substitute for the additive MTBE, which will be banned throughout California by the end of the year. Combined with last week's passage of a federal farm bill allowing growers in the state to market and refine sugar cane, the foundation appears to have been laid for a cane-based ethanol industry.

``With our soil and sunny climate, growing sugar cane is almost a no-brainer,'' said Ed McGrew, chairman of the newly formed Imperial Valley Sugar Cane Growers Association. ``The issue now is getting someone to build an ethanol refinery out here.''

Although common in Brazil and other tropical countries, refining cane into ethanol has not been done in the United States, where the Midwest-centered industry prefers corn as the fuel's main ingredient.

Only about 100 acres of cane have been planted throughout the Imperial Valley so far, a fraction of the 1,500 acres needed to support a refinery. But the crop has taken well to the hot, dry climate with irrigation from the Colorado River, McGrew said.

California consumes about 100 million gallons of ethanol a year. Less than 10 percent of that amount is produced by two small southern California refineries, said Pat Perez, a manager at the fuel office of the state Energy Commission.

Barring any delays in implementing the MTBE ban, annual demand for ethanol could soon skyrocket to at least 760 million gallons, Perez said.

University of California researcher Paul Sebesta said he saw an opportunity for growing sugar cane for ethanol while researching the crop for an Imperial Valley sugar refinery.

``I told them about thinking outside the box,'' said Sebesta, director of the University of California Desert Research and Extension Center in El Centro.

They responded with several proposals. One offered by Larry Flemming, a sugar beet grower in Brawley, involved converting a mill operated by Texas-based Imperial Sugar into a plant that can refine sugar and ethanol year-around with a steady flow of sugar cane and sugar beets.

Cane waste products would be burned as fuel for a companion plant that would generate surplus electricity for the local power grid. Other residual materials could be made into building materials and cardboard, Flemming said.

``We're trying to make a change and bring some things in that haven't been done before,'' he said.

Such operations don't come cheap, however. Flemming estimates that retrofitting the refinery and building the power plant would cost $150 million to $200 million.

``Their biggest obstacle is going to be obtaining financing to build these facilities,'' Perez said.

Refiners also must deliver ethanol at lower prices than their corn-fueled competitors in the Midwest, said Neil Koehler, director of California Renewable Fuels Partnership, a group promoting in-state ethanol production.

One feasibility study conducted by Sebesta found ethanol production from a proposed cane and sweet sorghum refinery would cost $1.48 per gallon, almost 20 cents more than out-of-state ethanol.

``What's going to be the cost of production and their cost of transportation?'' Koehler asked. ``Could the cost ... be offset by transportation costs?''

Sebesta said granting an ethanol tax credit could provide the local crop with a needed boost.

``It's like having a baby. We're trying to give birth to a whole new industry down here,'' he said. ``When you're the first, it's difficult.''  

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