By Sara Quam
A presidential decision on California's fuel could affect Rock County's farmers and Luverne's ethanol plant.
The Bush administration Tuesday announced that it will not exempt California from a rule requiring cleaner-burning gasoline additives.
Ethanol is one of those additives, and ethanol-producing Agri-Energy in Luverne is excited about the possibilities.
Plant manager Rick Serie said, "We market mostly to Iowa, South Dakota and Minnesota, and thatÕs going to change now."
The state of California is estimated to need 580 million gallons of ethanol a year to make up for other banned additives, such as MTBE.
Rock County is definitely a part of the Corn Belt, producing 20 million bushels of corn last year, compared with 5.6 million of soybeans.
"I think it's huge for farmers and clean air," Serie said.
University of Minnesota Extension Educator Fraser Norton said of the ruling, "It's a wise decision and makes good sense. Ethanol is beneficial to us all. We overproduce corn in this country, and we don't produce enough oil."
Norton said it's not likely that farmers will switch all of their planting to corn because of the benefits of crop rotation. However, the possibility of corn prices increasing by 25 cents per bushel because of demand certainly won't cause farmers to reduce their corn production.
Agri-Energy is producing close to capacity, almost 22 million gallons of ethanol a year. With the estimated large increase in ethanol's demand, Serie said prices will likely improve for this plant while other plants are trying to get up and running.
Why the ruling
The Bush administration's decision comes after months of lobbying on both sides from petroleum companies and ethanol producers.
California asked to be exempt from the federal requirements because the state says refiners already have ways to make gasoline blends cheaper and cleaner.
MTBE, which California banned because it tainted water, was a key to the president's decision. The additive helps fuel burn more cleanly but pollutes water and canÕt be easily cleaned up.
The Clinton administration called for phasing out MTBE over the next three years, and 11 states have banned the additive.
The new federal requirement for oxygenate additives means that gasoline will be formulated with chemical oxygen to reduce carbon monoxide and carbon dioxide emissions.
Some say ethanol isn't the magic wand to solving air pollution because it can lead to higher emissions of nitrogen oxides, according to Congressional Research Service reports. Nitrogen oxides are precursors to ozone formation.
The Environmental Protection Agency has said that even though California's air pollution requirements are the toughest in the country, it still needs the oxygenate additives.