Kern County, Calif., May Get Ethanol Plant

By Ryan Schuster, The Bakersfield Californian

Jun. 16–Kern County would become home to an ethanol plant if a global energy company wins approval to build a facility that would more than double California’s current production of the corn-based fuel additive.

The proposed facility outside Delano would create 30 full-time jobs upon completion in 2008 at a cost as high as $127 million, says Arlington, Va.-based AES. The company’s Delano subsidiary operates a wood waste-fueled biomass plant that would provide energy and steam to the proposed facility.

Demand for ethanol has spiked lately, driven by surging gas prices and a dwindling domestic supply of crude oil. Domestic production of ethanol has more than doubled in the last five years as state and local governments have called for more environmentally friendly fuels.

But the fuel’s future is still uncertain. Some in the oil industry point to heavy ethanol subsidies and question whether more ethanol will significantly reduce gasoline prices.

“We’re making a pretty big bet on ethanol,” said Don Vawter, the general manager of AES Delano Energy, which runs the existing biomass plant. “We like the long-term prospects even if the short-term prices do not hold. We think there’s momentum and there’s certainly government support and mandates that will move the nation toward it.” California consumed about a quarter of the roughly 4 billion gallons of fuel-grade ethanol produced in the United States last year. But the state produces less than five percent of the ethanol it consumes and has just three of the country’s 101 ethanol plants.

As proposed, the AES plant would produce about 55 million gallons of ethanol a year — more than one and a half times the state’s current production. The facility could be expanded to make as much as 85 million gallons annually.

California refineries now import most of the ethanol they use by rail from the Midwest, where the majority of the corn used to produce ethanol is grown.

“There’s definitely a market,” said Gene Cotten, the facility manager of Flying J’s refinery on Rosedale Highway. “(AES) is going to be competing with a guy in the Midwest for cost.” The AES plant would convert corn kernels into ethanol, which would then be blended into gasoline by refiners. The plant’s owners hope to switch eventually from corn to organic materials such as agricultural waste to produce what’s known as cellulosic ethanol, as soon as technological advances make that process more financially viable.

“With the cellulosic technology, people all over the country, not just in the Midwest are looking to their backyards, (asking) ŒWhat do we have in abundance that we can use?’” said Kristin Brekke, a spokeswoman for the Sioux Falls, S.D.-based American Coalition for Ethanol.

“Ethanol is spreading into a national issue, not just a Midwest issue.” Cotten said the 5.7 percent of ethanol blended by his refinery is a “small percentage” and hasn’t significantly changed his bottom line.

But ethanol proponents say the fuel will help reduce the prices consumers pay at the pump.

“We simply don’t have enough gasoline-refining capacity in this country,” Brekke said. “Any time we can add to the supply is good. The demand is extremely high right now. Every drop getting made is being used.” AES, one of the world’s largest power companies with 124 generation plants and 30,000 workers worldwide — 50 of them working full time at the biomass plant outside Delano, announced in April that it intends to spend $1 billion over the next three years on projects and technologies that reduce greenhouse gas emissions.

Vawter of AES Delano Energy said construction on the local ethanol plant could begin as soon as next spring.

But first the company must go through what he termed a “rigorous” permitting process that includes modifying an existing air permit for the biomass plant. He said it will have fewer emissions than the existing biomass plant, which converts wood waste into electricity, powering 50,000 homes a day.

Vawter said he is optimistic the plant will be approved.

“It’s an environmentally friendly facility that is wanted and needed in California,” he said. “It should meet a relatively small amount of resistance.”

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